Tata Group stock jumps 37% YTD; Experts find Mahakumbh 2025 connect

Benares Hotels share price has seen a stellar rally this year despite a weak sentiment in the Indian stock market. On Wednesday, Benares Hotels shares jumped as much as 9.43% to ₹11,498.65 apiece on the BSE, extending its rally for the second session. In the two days, Benares Hotels stock price has surged 18%.

Benares Hotels is a subsidiary of The Indian Hotels Company Limited (IHCL), with IHCL holding a 49.53% stake in the firm. It operates luxury and budget hotels, including Taj Ganges and Nadesar Palace in Varanasi, as well as Ginger Hotel in Gondia, Maharashtra.

The recent rally in Benares Hotels shares have been fuelled by robust earnings for the third quarter of FY25 and surge in demand due to the ongoing Kumbh Mela, which is expected to further boost revenues in the March quarter (Q4FY25).

Mahakumbh Boost

The Maha Kumbh Mela, held once every 12 years, is being held in Prayagraj, Uttar Pradesh, from 13 January 2025 to 26 February 2025. It has been attracting a massive influx of devotees from across the globe. High tourist footfall in Prayagraj will lead to a surge in footfall in adjacent markets as well.

Varanasi and Ayodhya are within drivable distances of Prayagraj. Taj Ganges owned by Benares Hotels, is seen as a key beneficiary of the Mahakumbh festival, analysts said.

Benares Hotels Q3 Results

Benares Hotels reported a strong financial performance in the third quarter of FY25. The Tata Group company’s net profit in the quarter ended December 2024 rose by 19.96% to ₹13.56 crore from ₹11.30 crore in the year-ago quarter.

The company’s revenue in Q3FY25 increased 16.23% to ₹40.01 crore from ₹34.5 crore in the year-ago period. EBITDA grew 19.21% to ₹19.92 crore compared to ₹16.71 crore, year-on-year (YoY).

“Domestic demand continues to be strong and quarter four is expected to deliver a record revenue with the upcoming Kumbh Mela and related travels in the region,” said Anant Narain Singh, Chairman, Benares Hotels.

Should you buy Benares Hotels shares?

Benares Hotels share price has jumped 15% in one month and more than 37% on a year-to-date (YTD) basis. Over the past six months, the smallcap stock have rallied 45%. However, Benares Hotels stock delivered multibagger returns of 244% in two years.

“Benares Hotels has recently broken out of a significant 267-day rounding bottom pattern, with a breakout point at ₹10,000 and a price target around ₹16,500. This bullish trend indicates strong potential for growth. However, a red flag lies in the low trading volumes, averaging just 1,000 shares over the past 50 days. Such low volumes may hinder active participation from market players, potentially limiting liquidity and profitability during the breakout,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

Hence, Jain advises investors to proceed with caution in Benares Hotels shares. 

At 1:40 PM, Benares Hotels shares were trading 7.55% higher at ₹11,300.25 apiece on the BSE, commanding a market capitalisation of over ₹1,469 crore.

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 making any investment decisions.