India Infoline has recommended a buy rating on Indian Hotels Company with a target price of Rs 115 in its June 24, 2008 research report. "With the full fledged roll out of ‘Ginger’ brand of budget hotels, the company has achieved a robust presence in virtually every price segment across major business and leisure destinations in India. It is expected to add nearly 2,500 rooms (ex Ginger count and mgmt contracts) through owned and subsidiary routes over the next three years. This would provide volume growth even as ARR rise is expected to moderate to 10-14% across key metros."

"The total capex on the above expansions is about Rs 24 billion of which partial funding has been secured through the twin rights issue of equity shares and NCDs which together garnered Rs 14.5 billion. We estimate sales and earnings CAGR of 15% and 10.4% respectively over FY08-10E and remain positive on the company which offers the most diversified play on the sector. The stock presently trades at a P/E of 13x and EV/EBIDTA of 7.9x our FY10E fully diluted earnings. BUY with a target price of Rs 115," says India Infoline's research report.

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