Considering Profit Booking: Apeejay Surrendra Park Hotels Shares Surged 21% on Listing, Is it Time to Sell?

Apeejay Surrendra Park Hotels Shares: Analyst Advises Caution, Suggests Profit Booking for Some, Sets Stop Loss for Long-Term Investors.

Shares of Apeejay Surrendra Park Hotels Ltd maintained their morning gains, despite the broader market trading in the red. The stock was trading up by 19.35% at Rs 185 on BSE, although it had slightly retreated from its intraday high of Rs 193.15. In comparison, shares of Indian Hotels Co Ltd were down by 0.35%, while Lemon Tree Hotels Ltd witnessed a decline of 3.15%.

Shivani Nyati, Head of Wealth at Swastika Investmart, remarked that the listing pop indicates robust investor confidence in the future prospects of the well-established hotel chain. With high occupancy rates and expansion plans indicating potential future growth, the listing paints a hopeful picture for ASPHL.

. However, Nyati advised a cautious approach. Investors aiming to book profits may consider exiting their holdings at current levels, while those with a long-term perspective may opt to set a stop loss at Rs 168.

Apeejay Surrendra Park Hotels operates a total of 30 hotels, which are situated across various categories including luxury boutique upscale and upper midscale. These hotels are located in key cities such as Mumbai, Goa, Bangalore, Chennai, New Delhi, and Hyderabad. As of January 2024, the company offered a total of 2,298 rooms. Additionally, Apeejay Surrendra Park also provides retail food and beverage services through its 73 ‘Flurys’ outlets.

Prashanth Tapse, Senior VP (Research) at Mehta Equities, highlighted that the momentum in the stock market, coupled with announcements made in the Interim Budget promoting the hospitality and tourism industry, could lead to potential outperformance of the hotel sector in the coming years.

Apeejay Surrendra Park Hotels is strategically positioned in all major metros to leverage the growing tourism demand. We believe that the robust listing performance is justified, supported by reasonable valuations compared to its peers and the government’s emphasis on promoting the hospitality and tourism sector.

The company’s primary goal of debt reduction could alleviate interest burdens, leading to improved bottom-line performance in the future. Therefore, we recommend allocated investors to hold the stock with a long-term perspective. For non-allottees, accumulating more shares on market dips post-listing and holding for a long-term horizon of 3-5 years is advisable, Tapse advised.

Earlier today, shares of Apeejay Surrendra Park Hotels were listed at a premium of 20.65%, opening at Rs 187 on the BSE. This was in comparison to the IPO price of Rs 155 per share.

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