Indian Hotels stock: Lower debt, higher room revenues to aid margin

The luxury segment and the cities the company has a presence in are expected to see higher demand and lower supply

The Indian Hotels stock has gained 20 per cent over the past month on expectations that demand growth, presence in the higher growth premium segment, improving margins and debt reduction will reflect on operational performance. Given the improving industry dynamics and strong outlook, brokerages are positive on the prospects.

The reason for the positive stance is the improving demand-supply situation, reflected in higher occupancy levels. Unlike the 2009-15 period, when supply exceeded demand and average occupancies were muted at 58 per cent, occupancies have increased to around 63 per cent currently. Analysts at Sharekhan expect demand to grow at 12