Mahindra Holidays Has Gained 65% in 2021; Is Their More Upside Left?

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Mahindra Holidays Has Gained 65% in 2021; Is Their More Upside Left?

By Aditya Raghunath

Investing.com -- Hotel stocks have been a mixed bag in the last 18 months. Multiple lockdowns have had severe negative impacts on the sector. Stocks like Lemon Tree Hotels (NS: LEMO ) and Chalet Hotels Ltd (NS: CHAL ) are down 4.43% and 1.09% in 2021 while others like EIH Ltd (NS: EIHO ) and Indian Hotels Co. Ltd (NS: IHTL ) have gained between 17% and 24% in the same period.

However, there is one stock that has defied all of them and soared 65% in 2021 so far: Mahindra Holidays and Resorts India Ltd (NS: MAHH ). This stock has been a bright spot in an otherwise dismal sector. The stock has gained over 91% in the last year.

And from its books, it looks like the stock is set up against any shock in the near future. It has almost zero debt, it has around Rs 950 crore as cash reserves and it has payments of about Rs 1,200 crore due from its customers in the next 12-24 months.

The stock closed at Rs 234.1 on September 13. HDFC (NS: HDFC ) Securities has a buy target on the stock with a target price of Rs 335 on the stock, an upside of 43% from current levels.

For FY21, Mahindra Holidays booked a profit of Rs 126 crore while Indian Hotels booked a loss of Rs 525 crore and EIH booked a loss of Rs 343 crore.

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