The Hindu Business Line : Aviation, hospitality stocks ride high

Aviation stock Deccan Aviation rose 11.50 per cent to touch its 52-week high of Rs 320.70 on Tuesday; Spicejet too touched its 52-week high of Rs 71.50 and was up 16.67 per cent.

Quite affordable

“This is a good quarter for the airline industry as tourism is at its peak,” said Ms Surbhi Chawla, an analyst with Angel Broking Ltd.

Air travel has become quite affordable for the public, and despite the rise in crude prices, the aviation industry has been doing well, said an analyst. Another reason, believes Ms Anita Gandhi, Head- Institutional Business, Arihant Capital Markets Services Ltd, is that more investment is taking place in the aviation industry as the Union Government is planning to increase the budget for infrastructure by 2.5 times.

She also added that more people using air travel is also boosting up these stocks.

Hotel industry

Analysts say that hotel stocks have been doing well also due to the fact that more tourists are travelling into the country.

“This year, the number of tourists coming into the country increased by around 14 per cent. With India being the flavour of the season right behind China, the tourists seem to want to get a first hand feel of the environment in the country.

Due to this, hotels are being over-booked, the demand for hotel rooms have sky-rocketed as well as the average occupancy of rooms have also multiplied”, said a merchant banker.

“Indian travellers also seem to travelling for business purposes more than leisure purposes, especially now that travel has become easier with better connectivity in the country.

Faster modes of transportation like air travel which have become cheaper means that the average Indian could also use this mode of transportation”, added an analyst.

Economic growth

With the holiday season coming up combined with high economic growth, market watchers believe that the hospitality and aviation sector will continue its winning streak.

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