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Stocks to benefit from Lakshadweep Tourism Boost

09 Feb 2024

Introduction


Lakshadweep is India’s smallest union territory, consisting of 36 islands in the Arabian Sea. The islands are distinguished for their white sandy beaches, coral reefs, and diverse marine life. Many tourists visit Lakshadweep to enjoy its natural beauty, adventure sports, and peaceful atmosphere.

In recent times, Lakshadweep tourism has grown considerably for various reasons, making the islands more appealing, accessible, and noticeable.

 

Let’s look at some stocks that can benefit from a boost in Lakshadweep tourism.

1. Praveg Ltd

Praveg Ltd operates in the hospitality, publications, and real estate marketing sectors. The company is best known for its exhibition and event management services, which cater to various industries, such as tourism, trade, education, sports, etc.

Praveg Ltd. recently secured two work orders from the Lakshadweep Department of Tourism. These work orders cover three years of operation, development, maintenance, and management of hospitality tents in Lakshadweep.

The company has also shown impressive financial performance and growth prospects, as evidenced by its latest quarterly results. In the financial year 2023, it reported a net profit of Rs 28.44 crores and revenue of Rs 84.86 crores. 

 

2. Easy Trip Planners Ltd

Easy Trip Planners Ltd provides travel booking services under its flagship brand, Ease My Trip. The company offers various services, such as flight booking, hotel booking, holiday packages, and bus booking.

The company recently suspended its tours to the Maldives, a popular destination for Indian tourists, due to political tensions. This could be a strategic move to shift its focus to Lakshadweep, a similar but less crowded and more affordable destination.

Easy Trip Planners Ltd has shown remarkable financial performance and growth prospects, as evidenced by its previous annual results. It reported a net profit of Rs 134.2 crore and revenue of Rs 464.2 crore in the financial year 2023. Its PE ratio is 59.94, much better than the industry PE of 74.56. 

 

3. Indian Hotels Company Ltd

Indian Hotels Company Ltd is a company that owns, operates, and manages hotels, palaces, and resorts under the Taj Group brand. It is one of India's largest and most prestigious hotel chains, with a presence in over 100 locations worldwide.

Indian Hotels Company Ltd has an existing presence and reputation in Lakshadweep, with two resorts in operation: Taj Coral Reef Resort and Taj Exotica Resort & Spa. These resorts offer luxurious accommodations, amenities, and services to the tourists who visit Lakshadweep, such as private villas, spas, restaurants, water sports, etc.

Talking about its potential, the company reported a net profit of Rs 1002.59 crore and a revenue of Rs 5,960.83 crore in the financial year 2023. It also declared a dividend per share of Re 1 with a payout ratio of 0.14.

 

Other potential stocks

Besides the three stocks that we have discussed in detail, here are some other stocks that could benefit from the Lakshadweep tourism boost:

  • SpiceJet Ltd: SpiceJet Ltd is a low-cost airline that operates domestic and international flights. It recently announced the launch of direct flights from Kochi to Agatti, the only airport in Lakshadweep, making it easier and cheaper for tourists to reach the islands. 
  • Shipping Corporation of India Ltd: Shipping Corporation of India Ltd is a government-owned company that provides shipping and maritime services. It plays a significant role in transporting passengers and cargo to and from Lakshadweep and providing cruise and ferry services within the islands. This company reported a net profit of Rs 870.16 crore and a revenue of Rs 5,977.93 crore in the financial year 2023. 

 

Conclusion

Lakshadweep tourism is a booming sector that offers many opportunities for investors. Some of the best stocks to invest in this sector are Praveg Ltd, Easy Trip Planners Ltd, and Indian Hotels Company Ltd. These companies have strong fundamentals, competitive advantages, and growth potential. Other stocks that could also benefit are SpiceJet Ltd and Shipping Corporation of India Ltd.

 

 

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