Three listed entities of one of India's largest conglomerate - the Tata Group, have emerged as outperformers compared to other listed group companies over the last 12 months.

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Among the 28 listed firms of the Tata Group, hotel stocks like Indian Hotels, Oriental Hotels and Benares Hotels are topping the return charts over a 12-month period. While shares of Benares Hotels have more-than-doubled over the last one year, shares of Indian Hotels have risen by 66 percent and 54 percent respectively, as of closing on May 31.

The rise in hotel stocks comes at a time when the group's cash cow - Tata Consultancy Services (TCS) has lost nearly Rs 28,000 crore in market capitalisation since May 2022. Other group entities like Tata Power, Tata Elxsi and Voltas have also lost anywhere between Rs 6,000 crore to Rs 7,000 crore, during the same time period.

Over the last 12 months, Indian Hotels has added Rs 22,000 crore to its market capitalisation, only next to Titan and Tata Motors, who added Rs 53,911 crore and Rs 30,498 crore to their market capitalisation during the same period.

Hotel stocks are likely to continue to remain in the limelight as even after the conclusion of the IPL, multiple upcoming events like the G20, the ICC Cricket World Cup and festive season travel will keep demand at elevated levels. This view was also echod by Indian Hotels' MD & CEO Puneet Chhatwal in an interaction with CNBC-TV18 last month.

Brokerage firm JPMorgan expects Indian Hotels to post double-digit growth in revenue per available room (RevPAR) in financial year 2024. "FY25 valuations do not seem to be stretched when compared to previous upcycle levels of 20-25 times, but leaves limited margin of safety, with growth factored in and above-guidance margin," the firm said.

(Edited by : Hormaz Fatakia)

First Published:Jun 1, 2023 8:50 AM IST