The Hindu Business Line : Value buying seen in EIH Associated

Some nimble-footed market players have been gradually accumulating EIH Associated stock as the company acquired more assets in the past few months and the profitability increased manifold in recent quarters. According to market sources, even though value picking is at play, lack of market making and low non-promoter holding restrain the stock’s movement. Jointly promoted by the Oberoi group and Rahejas, the relatively small hospitality company has in the last two yea rs added six hotels to its original kitty of two. The company, a subsidiary of EIH, now owns two Oberoi branded hotels (150 keys) and six Trident Hilton branded properties (732 keys). In FY-2007, PAT jumped by 52 per cent to Rs 13.71 crore. Its current capital base is Rs 19.59 crore.The promoter holding has increased to 76 per cent against 55.17 per cent as on December 31, 2006 following allotment of 90.87 lakh shares to the erstwhile owners of Indus Hotels Corporation Ltd – the Rahejas and Oberois – on January 31, 2007 after the amalgamation. Mr S.S. Mukherjee, MD, clarified to Business Line that though the promoter stake has gone up as a result of the merger, the ratio of holdings between Oberois and Rahejas continue to be 51:49 even with the enhanced capital. Analysts point out that the present market capitalisation of around Rs 225 crore (at today’s price of Rs 138.40) may not be more than one eighth of replacement cost of the assets it commands.

Jayanta Mallick

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