Tata Group's multibagger stock nears record high; buy, sell or hold?

Shares of multibagger Indian Hotels approached their record high on Tuesday amid a correction in the broader market. Indian Hotels shares rose to Rs 393.80 against the previous close of Rs 389.70 on BSE. The stock has climbed 324% in the last three years. Total 0.69 lakh shares of the firm changed hands amounting to a turnover of Rs 2.69 crore on BSE. Market cap of the firm rose to Rs 55.083 crore on BSE. The Tata Group’s multibagger stock hit a record high of Rs 399.40 on June 2, 2023 and fell to a 52-week low of Rs 207.25 on June 20, 2022.  

In terms of technicals, the relative strength index (RSI) of the stock stands at 68.4, signaling it's trading neither in the overbought nor in the oversold zone. Indian Hotels shares have a beta of 0.8, indicating low volatility in a year. Indian Hotels stock is trading higher than the 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages. The stock has risen 21.61 percent in 2023 and gained 69% in a year.   

The firm reported a 86.39% rise in sales to Rs 1625.43 crore in the March 2023 quarter against Rs 872.08 crore  in the March 2022 quarter. Net profit zoomed 342.47% to Rs 328.27 crore in Q4 against Rs 74.19 crore in the March 2022 quarter.  EBITDA rose 236.83% to Rs 535.49 crore in Q4 against Rs 159 crore in the March quarter of 2022.     

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher  said, "The stock has witnessed a decent run in the past two months with regular consolidation with slight correction in-between, has maintained a strong trend overall on the daily chart. Currently, the stock has witnessed some resistance near Rs 400 zone and slipped slightly with profit-booking seen and has near term support near  Rs 375 levels from where it can regain and begin with a new round of momentum. The upside target visible would be at around Rs 425-430 zone. At the same time, a decisive breach below Rs 375 would negate our view and can witness further slide." 

Abhijeet from Tips2trades said, "Indian hotels looks overbought on the Daily charts with strong resistance at 400. Investors should book profits at current levels as a strong price correction till Daily support of 355-346 looks likely."

Gaurav Bissa, VP, InCred Equities said, "Indian Hotels has been one of the strongest midcap names. It has been in a strong uptrend with the formation of higher highs and higher lows on weekly charts. The stock recently witnessed fresh breakouts at 350 levels. Currently, the stock is witnessing bearish divergence in RSI and MACD, which can keep the stock under some pressure. The stock is currently holding its 10ema of Rs 386 on daily charts suggesting a close below this can lead to some profit booking towards Rs 350 levels. A bearish macd crossover will confirm a sell signal in the indicator which will support the postulate of a short term dip towards Rs 350 zone." 

V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT) said, "The stock trading at Rs 391 which is almost near to its all-time high. Right now, it is looking a little high buy for fresh buying. One should wait for fresh buying as there could be a pull back till Rs 370-355 range. Momentum is really good in it and if you can average it in near term if price take a pullback aforesaid at levels, you can buy it even now. Targets of Rs 415/430/450/500/550 and stop loss for this bullish momentum rally should be 345 which is below its previous resistance level."

ICICI Securities has revised its target to Rs 443 against Rs 399 earlier.  

"We roll forward our valuation to 23x Jun’25 EV/EBITDA (earlier Mar’25) and retain our ADD rating with a revised SoTP-based target price of Rs 443/share (earlier Rs 399). Key risks are fresh Covid waves and discretionary consumption slowdown, " said the brokerage. 

On an annual basis, net profit zoomed to Rs 1002 crore for the fiscal ended March 2023 against a loss of Rs 247.72 crore for the fiscal ended March 2022. For the fiscal ended 2021, net loss stood at Rs 720.11 crore. Sales climbed 90.10% to Rs 5809.91 crore in the March 2023 fiscal against Rs 3056.22 crore for the fiscal ended March 2022. For the fiscal ended 2021, sales stood at Rs 1575.16 crore.   

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