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Epic Research
MHRIL (Buy)
CMP: ₹281.35
Target: ₹402
Mahindra Holidays and Resorts India Ltd (MHRIL) has a vacation ownership (VO) model. Company provides holiday offers to customers with vacation ownership against annual subscription fee.
Mahindra Holidays & Resorts India Ltd is a leading market player and considering the overall fundamentals, stock attracts premium against its peers. MHRIL has planned capex of ₹600 crore and a healthy product mix. The growth in domestic tourism industry coupled with digital penetration and rising disposable income levels are major boost for MHRIL.
Company has recently acquired 95 per cent in HCR (Finland), which has unlocked new value proposition for its customer base. We believe that this is a long-term story and can add substantially to wealth in the long run. Going forward, we expect stock to perform better than initial targets and attract re-rating. MHRIL is currently trading at 18x of FY20E earnings and 17.9x of FY19E earnings.
One can ‘Buy’ MHRIL at current levels for target price of ₹402 valuing company at 25x of FY20 earnings.
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