Friday, September 09, 2005

EIH gained 2.4% to Rs 462 extending the continued uptrend in the counter


26,339 shares changed hands in the counter on BSE by the first half of the
trading session. The stock has been on a roll since late July 2005 after the
company reported robust Q1 June 2005 results. From Rs 381.15 on 26 July
2005, the stock has gained 21.1% in a short while to the current Rs 462. The
boom in the hotel industry, with rising room rates and increasing
occupancies, has aided the surge in the counter in the past one year. The
stock has galloped from a level of Rs 223-Rs 228 in July-August 2004. EIH
reported a net profit of Rs 17.06 crore for Q1 June 2005 as against a net
loss of Rs 4.69 crore in Q1 June 2004. Net sales rose 32% to Rs 140.27 crore
(Rs 106.30 crore). In fact, the performance of EIH like most hotels is
expected to improve substantially in the second half of the financial year.
Tourist arrivals usually increase after the monsoons in September and remain
steady up to March, and the second half of the year is always much better
for the hotel industry than the first half of the year. EIH largely caters
to the business segment. The hotels are operated under two well-known
brands - 'The Oberoi' in the five-star category and 'Trident' in the budget
category. EIH has entered into a strategic alliance with Hilton
International. As per the alliance, EIH will continue to manage all hotels
and will undertake domestic marketing promotion and reservations in India.
Hilton International will be responsible for international marketing,
promotion and reservations through the Hilton global network.

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