The hotel, logistics and multiplex companies were the worst hit with the corona virus. Their earnings stalled due to the lockdown. After the vaccination of Corona virus, companies in these sectors are expected to return to shine. Some fund managers have started increasing investment in these beaten shares.
Fund managers believe that after vaccination, people’s lives will be back on track. This will bring back awe in the hotel, multiplex and logistics sector. This investment strategy is being called ‘Vaccine Day Theme’. Analysts have listed Indian Hotels, EIH, PVR, Mahindra Logistics and VRL Logistics as their choice. They believe that the balance sheet of these companies is good. They have cash reserves. Along with the brand, there is the potential to expand the business.
The fund manager of a leading fund house said, “Mass vaccination is expected to start in the first half of next year. This will increase people’s confidence in non-essential services. I believe the performance of the logistics, hospitality and multiplex sectors It will be good in the next two years. ” The basics of these sectors also reinforce this expectation.
There is not much expenditure on capacity expansion in these sectors in the next three years. These companies have been successful in adhering to strict discipline in terms of cost. These include waiving of rent and revenue sharing agreement between multiplexes and developers. Business is also showing improvement. Occupancy rate in hotels is increasing. On the other hand, their valuations are attractive.
Vikram Suryavanshi, an analyst with brokerage firm Philip Capital, said, “Logistics stocks are expected to pick up more, as their valuations are attractive. Mahindra Logistics has a one-year forward PE of close to 30. It is 5–52 years old. Much less than the range. “
According to a senior fund manager, there are some hotels, logistics and multiplex companies that have a nominal debt burden or are completely debt-free. In such a situation, there will be a good increase in their margin when the demand returns. As far as multiplexes are concerned, many films are going to be released in the next two to three years, due to which the shares of these companies will increase.
Naval Seth, analyst at brokerage firm MK Global, said, “Shares of multiplex companies like PVR are trading at 20 to 30 per cent lower than the pre-Corona peak. These companies are expected to re-enter the theater in the next two to three years. I am sure to benefit from it. ” Mutual fund companies increased their stake in PVR to 15.6 per cent from 14.9 per cent in the last two quarters.
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