Stock Review: JATIA GROUP

 

JATIA GROUP's Asian Hotels North is known for its premium hotels brand Hyatt Regency. It operates one Hyatt Regency hotel in Delhi, where it is planning to add 35 more rooms. The company is also erecting a new tower with a total built up area of around 1.66 lakh square feet which marks its foray into 'service apartments'. These will become available in FY12. With these additions, the company's room capacity will increase by 60%. The company joined hands with an overseas hospitality consultant to invest around 400 crore in the company through a preferential allotment in December 2010. These funds would be used for capacity expansion. The scrip is trading at a price to earnings multiple of 14.5 times which is reasonable considering a P/E of 16 for its peer TajGVK Hotels. Besides this, a history of consistent dividend payouts and low debt makes the company a better investment bet in the mid-size hotels segment