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Asian Hotels North Creates A New 52-Week High: 242% Up In 9+ Mths

Asian Hotels North Creates A New 52-Week High: 242% Up In 9+ Mths
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Chart: Asian Hotels 52 Week High & 52 Week Low as of 26 Dec 2023

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Asian Hotels hit its 52 week low of ₹66.60 on 08 Mar 2023 and from there it move to ₹238.40 creating a brand-new 52 Week High on 26 Dec 2023, giving a whopping 242.04% return in just 9 months and 18 days.

If you had invested ₹10,000 at its 52-week low price, your investment would have grown to ₹34,204 by 26 Dec 2023. This represents a gain of ₹24,204 in just 9 months and 18 days. Given ASIANHOTNR's strong recent performance, Lets find out what opportunities lies ahead for ASIANHOTNR

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Asian Hotel North’s Record Surge to a New 52-Week High

The 52-week high of Asian Hotels can be a result of many factors. Its previous 52-week high was made on 01 December 2023 at ₹ 236.20. It took 25 days to create a new 52-week high at ₹ 238.4 on 26 December 2023. In between, it made a low of ₹ 210 on 21 December 2023, implying a correction of over 11%. It may represent a change in the investors’ sentiment about the company due to improved financial condition or may represent overvaluation. Let’s go through the factors contributing to its all-time high.

Factors Contributing to a Stock’s 52-Week High

Positive Earnings Reports

  • In FY23, its revenue reached the pre-covid level. Its revenue in FY23 was ₹ 256 crores, which shows an increase of 95.96% year-on-year.
  • In Q3 ’23, its operating income increased by % year-on-year and reached ₹ 9.67 crores due to comparatively lower cost of goods.
  • Hotels are becoming more advanced by using artificial intelligence at the front and back offices of hotels. It is being used to make the guests’ experience more enjoyable and improve the overall efficiency of the hotels. Asian Hotels North can easily integrate such things into its day-to-day work to improve customer experience, which will result in an increase in sales.
  • Hotels across major cities in India are witnessing increased revenue per room. Hyatt Regency Delhi, which Asian Hotels North operates, has 507 rooms, thus giving a huge jump to its revenue. The trend is expected to continue.
  • The corporate travel that was reduced due to the pandemic has now become a thing of the past. Increased corporate travel along with the strategic location of Hyatt Regency Delhi gives it an advantage over other nearby hotels.

Analyst Ratings

According to Simple Wall Street, it is trading at 23% below its estimated fair value based on the discounted cash flow model. Its price-to-sales ratio of 1.6x is lower than the peer average of 5.7x, which makes the stock undervalued. In the past five years, the earnings have declined by 16.6% per year. Based on the snowflake analysis, the company is a good value with an imperfect balance sheet.

Potential Scenarios Following a 52-Week High

(Based on the chart of 1-day timeframe)

Converting numbers and candles into information can provide us with the market’s stance on the stock, which may help us make correct investment decisions. Since the listing of Asian Hotels on the stock exchange on 27 January 2003, it has made many 52-week highs, but there were a few things that happened in 2023 that made its price chart unique. In April, June, and November, there were a few days on which the trade happened at a single price during the day. Due to a large spread between buy and sell bids, the trade volume remained low, and later, the prices moved in the upward direction. If the trend continues, then we may see a further increase in share price.

Asian Hotels Stock Analysis: Potential Supports and Targets

As Asian Hotels today (Tue 26 Dec 2023) created a new 52 week high there are chances of it becoming volatile. At this time potential investors and investors should keep an eye for opportunities for entry or exit. Below you will find Asian Hotels's metrics highlight, potential support and targets derived using Fibonacci Retracement and Extensions method, where Golden Ratio is assumed to be a good support (entry point) and Golden Extension to be good resistance (target point)

KEY PERFORMANCE METRICS

MetricsValueOccured On
Close Price₹227.80Tue, 26 Dec 2023
52 Week High₹238.40Tue, 26 Dec 2023
52 Week Low₹66.60Wed, 08 Mar 2023
All Time High₹934.00Tue 06 Feb 2007

The above table shows that the close price of Asian Hotels on Tue, 26 Dec 2023 was ₹227.80. The next target for it could be the All-Time High of ₹934.00 which is ₹706.2 more than from its close price of ₹227.80.

It's possible that some investors might consider booking profits near the 238.40 mark, which could apply downward pressure on the stock price. But what does this newly created milestone signify for potential investors? Lets find out.

Asian Hotels Fibonacci Retracement Or Support levels

For those considering an entry, the Golden Ratio (61.8%) retracement level of ₹132 offers a promising point, given the likelihood of a pullback from these levels as new investors might come in at these levels.

Retracement or Support LevelsValues
S123.6%₹197
S238.2%₹172
S350.0%₹152
S461.8% (Golden Ratio)₹132
S578.6%₹103
S652 Week Low₹66

Note: This table was last updated on Tue, 26 Dec 2023.

Asian Hotels Fibonacci Extensions Or Target levels

For those considering an exit, the Golden Extension (161.8%) level of ₹344 offers a promising point, given the likelihood of a downward momentum from these levels as investors might start booking their profits at these levels.

Extensions or Target LevelsValues
T152 Week High₹238
T2138.2%₹304
T3161.8% (Golden Extension)₹344
T4200%₹410
T5261.8%₹516

Note: This table was last updated on Tue, 26 Dec 2023.

Making Informed Investment Decisions

For any stock, reaching an all-time high is a significant milestone. Still, conducting thorough research and considering various factors is essential before making investment decisions. To make informed choices that align with your investment goals and risk tolerance, one needs to analyze the company’s fundamentals, industry trends, management’s strategy, and overall market conditions.

Company’s Financial Health

  • In 2022, Asian Hotels North had a debt of ₹ 1082 crores covered by a free cash flow of ₹ 32.72 crores and cash & equivalents of ₹ 19.60 crores. It shows a huge difference between the debt and funds, which makes it important for the company to increase the amount under free cash flow or cash & equivalents.
  • In the short term, it has a liability of ₹ 611 crores covered by assets of ₹ 63.48 crores. The assets of ₹ 1509 crores cover its long-term liabilities of ₹ 799 crores. Due to comparatively high short-term debt with comparatively negligible reserve funds, we may see an increase in debt or the sale of its long-term assets.

Industry Outlook

  • As India grows, the demand for leisure travel will also increase, thus increasing the demand for high-end hotels. It is expected that the high-tier hotels limited to a few cities will gradually expand to other areas depending on the location popularity and the average spend of customers in those areas.
  • High-end hotels may see fierce competition from middle-tier hotels, which have already started to attract repeat customers by providing a similar level of service. Hotels may need to bifurcate their business according to star ratings to capture a greater portion of the market.

Market Sentiment

Due to various positive factors, Asian Hotels North rallied to a new 52-week high of ₹ 238.4. In FY23, the company has already achieved the pre-COVID level revenue, so its revenue is expected to increase further and reach new heights. The surge can be attributed to favourable industry trends such as increased corporate travel, leisure travel, improved customer experience, operational efficiency, etc. However, the company’s financial health is a point of concern. Against a substantial debt, it has limited free cash flow and cash & equivalents, so it may face liquidity issues in future. Investors need to conduct detailed research, considering factors like company fundamentals, industry trends, and financial health, to make informed investment decisions.

Disclaimer: Information is provided ‘as is’ and solely for informational and educational purposes, not for trading purposes or advice. We highly recommend to do your own research before making any investment.

About The Author

Nippun

Hi, I’m Nippun, a tech enthusiast from Haryana, India. I have been coding since 2010 and using my coding skills in the share market since 2020. I have been coding scripts in Pinescript that work on Tradingview app/web. I love learning about new technology and applying it to solve real-world problems. Coding and share-market are my passions, and I enjoy finding and fixing bugs in code. I aim to share my skill set and experience that can positively impact society. Feel free to connect with me, and let’s learn from each other. My Twitter