Juniper Hotels share price rises 10% after a flat debut: Should you Buy, Sell or Hold the stock?

On NSE, Juniper Hotels share price was listed at ₹365 per share, 1.39% higher than the issue price of ₹360. On BSE, Juniper Hotels share price today opened at ₹361.20 apiece, up 0.33% than the issue price.

Juniper Hotels share price post listing  gained 10% and was trading at ₹397.30 a piece. 

Investors already had been expecting a tepid listing as was reflected in the grey market premium that indicated no listing premiums or discounts. Also, analysts had been maintaining that issue price is fairly priced. Nevertheless  many analysts had maintained investing in Juniper Hotels IPO for long term gains looking at long-term earnings prospects.

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Anand Rathi Research had said that IPO was fairly priced and recommended a “Subscribe-Long term” rating to the IPO.

As per Anand Rathi Research Juniper Hotels Ltd has a expertise in site selection and identifying opportunities to develop their hotels with unique partnership between asset owner and operator brand backed by strong parentage and robust asset management capabilities with a focus on enhancing operating efficiency and profitability with increasing returns by having multiple revenue streams and complementary offerings and well positioned to benefit from industry trends.

Prashanth Tapse, Senior VP Research, Mehta Equities Ltd post listing said that “Despite lower subscription demand in the bidding process, Juniper Hotels listed above everyone’s expectations which can be attributed to brand “Hyatt” which is a well-known global brand and too big to ignore. 

Debt reduction and emerging hospitality trends to benefit

Since the company is using most of its IPO proceeds to repay its debt , analysts expect the same to have positive impact on profitability, as there is  going to reduction in interest cost. 

Considering the sector demand and focus on India tourism, the primary objective of reducing the debt could lighten the interest burden and can improve the bottom line in the coming years, said Tapse. With its established brand and strategically located assets, the company is well-positioned to capitalise on emerging hospitality trends. 

Apart from that demand-supply mismatch in terms of hotel rooms, foreign tourists’ arrival are some of the key growth factors for the hospitality industry going forward.

The hotel sector is expected to outperform in the coming years. Hence allotted investors can hold and add more at lower levels which can reward them in the medium to long term, advised Tapse.

Juniper Hotels is also Increasing returns by having multiple revenue streams & complementary offerings

However the competition is intense in the industry and the caution is also required.

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Shivani Nyati, Head of Wealth at Swastika Investmart Ltd said that Juniper Hotels, the high-end hotel developer known for its Hyatt-affiliated chains, witnessed a flat debut on the stock market. This performance aligns with pre-listing expectations, which were tempered by muted investor enthusiasm and a lack of significant gray market premium (GMP).

Competitive landscape and financials to be watched for

Nyati said that the saturated hospitality sector raises concerns about Juniper’s ability to maintain its market share amidst fierce competition. While Juniper boasts a well-established presence, its recent financial performance has not been particularly strong, potentially deterring investors.

Thus, considering all these factors, a cautious approach is crucial for investors.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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Published: 28 Feb 2024, 11:15 AM IST