Mahindra Holidays soars 9%, hits all-time high on improved business outlook

Shares of Mahindra Holidays & Resorts India Limited (MHRIL) hit a record high of Rs 313.50 on the BSE, as they surged 9 per cent in Tuesday’s intra-day trade, amid heavy volumes on improved business outlook.

The stock of the Mahindra Group surpassed its previous high of Rs 312.67 which it had touched on July 10, 2017. In the past one month, it has gained 21 per cent, as compared to 0.41 per cent rise in the S&P BSE Sensex. Further, in the past three months, it has soared 56 per cent, as against 16 per cent rally in the benchmark index.

At 11:38 AM, MHRIL was trading 6 per cent higher at Rs 304.65 on the BSE. Average trading volumes on the counter jumped over five-fold with a combined 3.53 million equity shares, representing 1.76 per cent of total equity of the company, having changed hands on the NSE and BSE till the time of writing of this report.

MHRIL, India’s leading company in the leisure hospitality industry, offers quality family holidays primarily through vacation ownership memberships. While Club Mahindra is the flagship brand with a 25-year membership, the other products offered by the company are — Bliss, Go Zest, Club Mahindra Fundays and Svaastha Spa.

As on June 30, 2022, MHRIL had 84 resorts across India & abroad and its subsidiary, Holiday Club Resorts Oy (HCR), Finland, a leading vacation ownership company in Europe, has 33 timeshare destinations with 9 Spa Resorts across Finland, Sweden and Spain.

For April-June quarter (Q1FY23), MHRIL had delivered strong financial performance as reflected in the growth of income & profit after tax (PAT). The company had posted consolidated PAT of Rs 29.80 crore against loss of Rs 21.40 crore in the year-ago quarter (Q1FY22).

Total income grew 52 per cent year on year to Rs 637 crore from Rs 418 crore. Summer holiday season started from mid-June onwards and domestic travel remains strong, the company said.

Leisure travel in India gathered momentum as Covid restrictions were eased. As the market leader, Mahindra Holidays has performed much better. Occupancy has increased significantly and is now almost back to pre-Covid levels. At the same time, member acquisitions recovered sharply and the Company added significant room inventory in 2021-22.

Mahindra Holidays expects the business environment to improve further in 2022-23 and is well placed to benefit from the opportunities that it presents. The Company has a strong balance sheet with adequate resources at its disposal to tide over any short-term challenges and to benefit from emerging opportunities in the leisure travel and hospitality industry.

India witnessed a turnaround in economic performance during the year. The economic outlook for 2022-23, while affected by the war in Ukraine, remains positive. Even though there are downside risks in the form of inflation in commodities and energy, adverse impact of monetary tightening in advanced economies and possibility of yet another surge in Covid infections, the Company believes that these are unlikely to derail economic recovery in India.

“The RBI has projected a GDP growth of 7.2 per cent for 2022-23, which will make India the fastest growing large economy in the world. Leisure travel in India gathered momentum as Covid restrictions were eased. As the market leader, Mahindra Holidays has performed much better. Occupancy has increased significantly and is now almost back to pre-Covid levels. At the same time, member acquisitions recovered sharply and the Company added significant room inventory in 2021-22,” MHRIL said in its FY22 annual report.