Stock to Buy: Royal Orchid Hotels
Royal Orchid Hotels is a chain of hotels in India that offers luxury and upscale accommodation options for business and leisure travelers.
The group has a portfolio of hotels located in various cities across India, including major metropolitan cities like Bangalore, Mumbai, Delhi, Kolkata, Chennai, Jaipur, and Pune, as well as popular tourist destinations like Goa, Mysore, and Shimoga.
Royal Orchid Hotels is known for its elegant and contemporary properties that provide a range of services and facilities, including well-appointed rooms and suites, multi-cuisine restaurants, conference and banquet facilities, spa and wellness centers, fitness centers, swimming pools, and more.
The hotels are designed to cater to the needs of both business and leisure travelers, offering a blend of comfort, convenience, and luxury.
The group’s hotels are often strategically located close to business districts, airports, and major attractions, making them convenient choices for both business trips and leisure stays.
Royal Orchid Hotels has a reputation for its warm hospitality, attentive service, and commitment to guest satisfaction.
In addition to its hotels in India, Royal Orchid Hotels also has properties in other countries, including Kenya, Zambia, Tanzania, and United Arab Emirates, expanding its footprint beyond the Indian market.
Overall, Royal Orchid Hotels is a well-established hotel chain in India, known for its luxurious properties, excellent service, and convenient locations, making it a popular choice for travelers seeking upscale accommodation options.
Why Invest in Royal Orchid Hotels Stock
Based on the recent report by Edelweiss and the positive outlook for Royal Orchid Hotels, the brokerage has maintained its BUY rating on the company’s shares and set a target price of Rs 433.
The shares of Royal Orchid Hotels closed at Rs 341.20, with a gain of 6.5% on the NSE. Over the past one month, the shares have gained 10.53%, and over the past one year, it has given a strong return of 97.18%.
Edelweiss also mentioned that the recent show cause notice issued by SEBI to Royal Orchid Hotels regarding a point of law is not expected to impact the company’s business, and the company is taking necessary legal advice in the matter.
The brokerage further noted that there will be no sale of additional stake by the promoter of the company.
Royal Orchid Hotels is also planning to raise around Rs 100 crore by issuing non-convertible debentures (NCDs) for capital expenditure, and is currently working on an asset light model, which is expected to help the company maintain its balance-sheet health and reduce its debt-to-equity ratio to -0.35x by FY2025 from 0.27 at present.
In addition, Edelweiss expects the company’s operating cash flow to grow to Rs 98 crore by FY2025 from Rs 39 crore in FY22, indicating a positive outlook for the company’s financials.
Based on these factors, Edelweiss has estimated a potential strong jump of about 60% in the shares of Royal Orchid Hotels from the current level.
However, as with any investment decision, it’s important to conduct thorough research, consider your risk tolerance, and consult with a financial advisor before making any investment decisions.
