Tourism, Hotel & Aviation Stocks In Action on Sep 20

Hotel and tourism scrips saw heavy volumes being bought in the equity markets on Monday, September 20 amid hopes of reopening of economic activities and further ease in restrictions across the country. In the trading session on Monday, shares of Indian Hotels and Taj GVK Hotels jumped nearly 14 per cent each. Shares of Indian Hotels marked a fresh 52-week high of Rs 169.55 amid higher than average volumes in the stock. On the other hand, Royal Orchid Hotels and Asian Hotels (North) gained as much as 20 per cent in the intraday session.

Santosh Meena, Head of Research, Swastika Investmart, said, "Tourism, travel, and hotel stocks are buzzing today on the back of reopening momentum in India as aviation companies are allowed to operate with 85 per cent capacity. India may open the doors for foreign tourist soon is another big reason for a sharp rally in hotel stocks."

The airline stocks too saw good action as Spicejet saw a four per cent jump in the intraday session on the BSE after the centre allowed airlines to operate at a maximum capacity of 85 per cent of their pre-Covid levels from 72.5 per cent earlier. The recent development to ease curbs on travel and tourism and with reports on a proposal to allow foreign tourists in the country also floating around appears to have lifted the investor sentiment, said market experts.

As is known, the hospitality, travel, tourism and aviation sectors have been among the worst-hit during the first and second waves of the Covid-19 pandemic. Restrictions in travel, lockdowns and switch from personal corporate meets to digital meetings together impacted the businesses on a larger scale, analysts pointed out.

Market Analysts and experts are bullish on the sector, given the sector's expectation to reach its pre-Covid levels again in the upcoming quarters. The government's constant support to uplift the sector and upcoming festive season will add more to the sector's profitability in the future, said experts.

Likhita Chepa, Senior Research Analyst at CapitalVia Global Research, feels that one can consider adding  these stocks at current levels in their portfolio from this sector. "Investors can consider adding stocks from these sectors or increase allocation to these sectors at current levels as these sectors hold the potential to generate a decent return in the near term and are also offering favorable risk-reward ratio", she said.