Buy Indian Hotels; target of Rs 770: Motilal Oswal

Motilal Oswal's research report on Indian Hotels

Indian Hotels (IH) reported a strong consolidated revenue growth of 27% YoY in 2QFY25 led by healthy demand across regions. Like for like revenue growth stood at ~16% YoY (ex. consolidation of TajSATS). Standalone business revenue grew ~16% YoY, driven by an increase in ARR (up 10% YoY) and better occupancy (up 150bp YoY). Management contract revenue rose 15% YoY to INR1b. IH maintains its double-digit revenue guidance with new and reimagined businesses likely to accelerate the growth trajectory. We expect a strong performance in 2H, led by strong wedding seasons (~30% YoY higher wedding dates), increase in FTA, and healthy traction within the MICE segment aided by convention centers and favorable demand-supply dynamics. We broadly maintain our FY25/FY26 EBITDA estimates and reiterate BUY with our SoTP-based TP of INR770.

Outlook

We broadly maintain our FY25/FY26 EBITDA estimates and reiterate BUY with our SoTP-based TP of INR770.