MUMBAI: Kotak Securities has initiated coverage on Mahindra HolidaysBSE 0.91 % with a ‘buy’ rating and a target price of Rs 388.
“We believe the VO (vacation ownership) industry in India has strong potential to grow keeping in mind under penetration, rising discretionary spending towards tour and leisure segment, etc. MHRIL (Mahindra Holidays) with its robust business model, strong management and brand image will be able to tap opportunity and beat competition from other players in hospitality business,” said Kotak Securities.
The brokerage said the company’s strong operating and free cash flows will help the company to grow by keeping its balance sheet debt free.
The recent corrective measures adopted by the company in terms of its focus on adding the right quality members is expected to improve profitability along with moderation in receivables, said Kotak Securities.
