Travel & transport still the growth drivers …

•  Q1 FY08 results on the right track Net sales grew 16.42% to Rs 18.93 crore in the quarter ended June 2007 as against Rs 16.26 crore during the previous quarter last fiscal, while net profit jumped 49.13% to Rs 2.58 crore as against Rs 1.73 crore.

• Booming car rental business ITH is expanding its car rentals business with a capex of around Rs 18 crore to purchase over 200 cars during the current financial year. Currently the company has a fleet of around 650 owned cars and more than 200 leased cars.
  

•  Online portal to boost retail sales The company’s plan of entering into the online space for booking of tickets is likely to materialse by the second half of FY08E. While the payment gateway has already been set-up and is currently under testing phase, the content for the online portal is currently being developed.

Valuations At the current price of Rs 152, the stock trades at a P/E of 10.31x its FY08E EPS of Rs 14.75. On an EV/ EBIDTA basis, the stock is available at 3.65x FY08E earnings. The company is riding on the fast growth in the travel and tourism industry. Its foray into the online travel segment through its portal will catapult the company’s valuation to that of its other online peers. We continue to value the stock at a P/E multiple of 15x its FY08E earnings with a price target of Rs 221. We maintain our OUTPERFORMER rating on the stock.

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