Buy Indian Hotel; target of Rs 680: Motilal Oswal

Motilal Oswal's research report on Indian Hotel

TajSATS witnessed a revenue/EBITDA growth of ~40%/82% YoY in FY24, led by scaling up of business with Air India and Vistara, higher air passenger traffic, improved utilization, and a better product mix.Currently, the Indian aviation sector is at an inflection point, with the number of airports expected to reach ~230-240 by CY30 from ~148 in CY23. Airplanes (outstanding order of ~1,620 planes) and air passengers (to reach ~420m by CY30E from ~152m in CY23) are likely to spurt over the next few years.In order to tap into the rising air-catering market (~13% CAGR over CY24-CY29E), TajSATS is expanding its footprints and is expected to launch new kitchens in Gurgaon and southern markets.

Outlook

We reiterate our BUY rating with an SoTP-based TP of INR680.