International Travel House Ltd (Rs 110)
(BSE Code - 500213)
(P/E - 10, ITC Group Stake - 61.69%, Market Cap - Rs88 cr)
International Travel House (ITH) is an associate Company of ITC - one of India's largest business conglomerate. ITH is India's premiere travel and tourism company offering full bouquet of travel solutions and services like air tickets, business travel, car rentals, conferences, exhibitions, forex, event management, inbound and outbound leisure trips. ITH commenced operations in 1981 and its expertise has been built up over 28 years and is now one of India's largest travel management company with presence in 13 cities. ITH is one of India's largest branded Car Rental companies with 13 Car Rental Offices in the major Indian cities and a fleet of 900 cars. ITH is one-stop-shop for tourists, whether corporate or leisure and its corporate clients include many of the largest and most discerning corporates such as Infosys, Samsung, Sun micro, Citibank, Bharti Airtel, Siemens etc. apart from the ITC group. Over the years, ITH has grown to be one of the largest Complete Travel Management companies in India.
Tourist arrivals into India have grown at an average of 18.7% p.a. in the last three years. The boom times witnessed by the India travel and tourism industry in the past and the higher disposable incomes have resulted in more Indians going for holidays in Indian and abroad. To sustain growth of 18-20% p.a. in foreign and domestic tourist traffic achieved recently, an improvement in overall infrastructure facilities, specific connectivity to important tourist sites and an increase in investment in the hospitality sector are needed. All this augurs well for ITH and a window of opportunity lies for ITH, which runs a huge fleet of 900 cars, has access to the Welcomgroup of Hotels, is a authorized currency changer and provider of global scale Hotel and Airline bookings.
For the Q1 ended June 2009, ITH has posted a net profit of Rs 1.67 cr.(down 35.5%) on net sales of Rs 17.69 cr.(down 14.7%). The poor results can be attributed to general economic slowdown which led to decline in corporate and leisure travel. For the year ended March 2009, ITH had posted a net profit of Rs 8.19 cr (down 22%) on net sales of Rs 79 cr (flat). On a equity of 7.99 cr (Promoters' stake - 61.69%) the EPS is Rs 10.25 and the dividend declared is 30%.. At CMP of Rs 110 the ITH stock trades at 10.7 times FY09 earnings and at 9.1 times FY10E earnings (Rs 12). Given its parentage, the future of ITH appears promising. Moreover the current slowdown in the travel and tourism sector offers investors an attractive opportunity to accumulate the ITH stock at current low levels and more on declines. Also, as the company is poised to launch its online portal soon to boost its retail travel market share, the stock should fetch better and higher valuations. With the current improving sentiment for Hotel and Tourism stocks, the ITH stock is bound to do well in the medium term. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 35%-40% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)
(BSE Code - 500213)
(P/E - 10, ITC Group Stake - 61.69%, Market Cap - Rs88 cr)
International Travel House (ITH) is an associate Company of ITC - one of India's largest business conglomerate. ITH is India's premiere travel and tourism company offering full bouquet of travel solutions and services like air tickets, business travel, car rentals, conferences, exhibitions, forex, event management, inbound and outbound leisure trips. ITH commenced operations in 1981 and its expertise has been built up over 28 years and is now one of India's largest travel management company with presence in 13 cities. ITH is one of India's largest branded Car Rental companies with 13 Car Rental Offices in the major Indian cities and a fleet of 900 cars. ITH is one-stop-shop for tourists, whether corporate or leisure and its corporate clients include many of the largest and most discerning corporates such as Infosys, Samsung, Sun micro, Citibank, Bharti Airtel, Siemens etc. apart from the ITC group. Over the years, ITH has grown to be one of the largest Complete Travel Management companies in India.
Tourist arrivals into India have grown at an average of 18.7% p.a. in the last three years. The boom times witnessed by the India travel and tourism industry in the past and the higher disposable incomes have resulted in more Indians going for holidays in Indian and abroad. To sustain growth of 18-20% p.a. in foreign and domestic tourist traffic achieved recently, an improvement in overall infrastructure facilities, specific connectivity to important tourist sites and an increase in investment in the hospitality sector are needed. All this augurs well for ITH and a window of opportunity lies for ITH, which runs a huge fleet of 900 cars, has access to the Welcomgroup of Hotels, is a authorized currency changer and provider of global scale Hotel and Airline bookings.
For the Q1 ended June 2009, ITH has posted a net profit of Rs 1.67 cr.(down 35.5%) on net sales of Rs 17.69 cr.(down 14.7%). The poor results can be attributed to general economic slowdown which led to decline in corporate and leisure travel. For the year ended March 2009, ITH had posted a net profit of Rs 8.19 cr (down 22%) on net sales of Rs 79 cr (flat). On a equity of 7.99 cr (Promoters' stake - 61.69%) the EPS is Rs 10.25 and the dividend declared is 30%.. At CMP of Rs 110 the ITH stock trades at 10.7 times FY09 earnings and at 9.1 times FY10E earnings (Rs 12). Given its parentage, the future of ITH appears promising. Moreover the current slowdown in the travel and tourism sector offers investors an attractive opportunity to accumulate the ITH stock at current low levels and more on declines. Also, as the company is poised to launch its online portal soon to boost its retail travel market share, the stock should fetch better and higher valuations. With the current improving sentiment for Hotel and Tourism stocks, the ITH stock is bound to do well in the medium term. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 35%-40% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)
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