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You are here : IndiaNotes >> Research & Analysis >> Companies >> International Travel House Ltd. >> Research

Attractive Micro Cap Stock: Buy International Travel House

Sanjay Chhabria | 31 Oct, 2014  | Follow Author | Add to my Favourites 
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ATTRACTIVE MICRO CAP STOCK

INTERNATIONAL TRAVEL HOUSE LTD(Rs 257)

(BSE Code- 500213)

(Equity-8 cr., Promoters’ Stake-61.69%.)

(P/E-10,  Mkt. Cap-205 cr.)


International Travel House (ITHL), a constituent of ITC group (61.7% stake) is one of India’s leading travel management companies. The Travel House network consists of 10 IATA Travel Offices, 14 Car Rental Offices and 19 Travel Counters. ITHL is India's premiere travel and tourism company offering full bouquet of travel solutions and services like air tickets, business travel, car rentals, conferences, exhibitions, forex, event management, inbound and outbound leisure trips. ITH commenced operations in 1981 and its expertise has been built up over 30 years and is now one of India’s largest travel management company with presence in 13 cities. ITH is one of India’s largest branded Car Rental companies with 13 Car Rental Offices in the major Indian cities. Clients include NDTV, Infosys, HCL, Siemens, Citibank, ABN, Samsung, Max Hospitals, FICCI, Essel group and 3M, apart from the ITC group. It owns a transport fleet of 900 cars and has over 700 trained travel professionals.


With a team of dedicated professionals, a nationwide network, and state-of-the-art technology, ITHL is well equipped to address all possible travel needs of both business and leisure travellers. It offers a range of services including corporate travel, car rental, destination management services, world class holidays, incentive group travel, conference management and foreign exchange. With India identified as a strong center for medical services globally, ITHL is pursuing the niche segment of medical tourism. The company is also aspiring to be a leader in the conference and exhibition segment of the business. It has been appointed as the official travel partner and professional conference organiser in India by several important international conference organisers. Today, ITHL is servicing business travel needs of many Indian and Multi-National business houses with implants in 160 companies


Reaffirming its commitment to the Business Traveler and keeping in line with the best global practices, the company has further strengthened its technology platform in terms of air ticketing via the satellite ticket printing and introduction of electronic process for strengthening its credit card payment mechanism, among other technological advancements. The company has also integrated its Travel Accounting software with the Car Rental Accounting package. The company’s project for creating a sophisticated IT based integrated platform is progressing well and a few modules are up and running while others are at an advanced stage of development. This platform, once fully implemented, shall radically transform the manner in which the company conducts its business.


For the Q1 ended June 2014, it registered 5.6% rise in sales to Rs 46.17 cr.. PAT went up 4.7% to Rs 5.85 cr.. For FY 2014, sales grew 4% to Rs 171.71 cr.. PAT rose 1% to Rs 18.11 cr.. On a equity of Rs 8 cr.(Promoters’ stake – 61.69%), FY14 EPS comes to Rs 22.63 and the dividend declared was 42.5%. The company has managed to hold on to its revenues and profits in the last three years in spite of adverse economic environment. However, pick up in corporate and incentive travel consequent to pick up in economy should augur well for the company’s growth in future. At current levels, the ITHL stock appears attractive as it trades at about 11.3 times FY14 earnings (Rs 22.63) and at 10 times FY15E earnings (Rs 25- Rs 26).  This is low for an ITC group company in a healthy growth mode.

 


The ITHL stock looks undervalued in comparison to its listed peers such as Thomas Cook, Cox & Kings, Mahindra Holidays Etc.. Investors can start accumulating the ITHL stock at current levels and add more on declines for decent returns of 50%-60% over the next 8-12 months.



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About Sanjay Chhabria

Sanjay Chhabria is an equity analyst and investment consultant based at Raipur (Chhattisgarh). He brings out a weekly investment newsletter "Market-View" to help retail investors make informed investment decisions. He welcomes comments, feedback & investor queries at [email protected] and at 9893200307.


For more information please write in to [email protected]

Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.




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