Post COVID there was a sudden surge in travel demands since everyone was locked up and for almost two years travelling was very difficult. This will eventually normalise.
For Indian Hotels revenue in FY21 had dropped to 20% of FY20 and since the return in demand has also skyrocketed the revenue to almost 4x the revenue in FY25. Even profits have gone from -320 Cr to 2200Cr and Hence there has been a rerating in the stock and the absurd valuation.
But we should be extremely careful at getting into such stocks at these valuation.
From 2007 – 2021 there was almost zero returns in the stock and such cycles can repeat.
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