Indian Hotels stock hits all-time high, extends rally as Jefferies raises price target

IHCL shares have rallied 75 percent since the start of the year.

Shares of Indian Hotels Company Limited (IHCL) rose over 2 percent to hit a new high of Rs 768.5 in morning trade on November 21, marking their second consecutive session of gains. The rally followed an upward revision in the stock’s target price by Jefferies, citing strong growth catalysts.

With a 'buy' call, and a price target of Rs 900, the international brokerage implies an upside potential of almost 20 percent from the last close of Rs 754 on the National Stock Exchange. IHCL shares have rallied 75 percent since the start of the year.

The management has outlined ambitious goals to drive consistent growth through FY30, building on its strong track record of delivering on past guidance. The company aims to open an average of one new hotel per week until FY30, reflecting its confidence in achieving these targets.

The company extended its growth streak into the tenth straight quarter, posting robust results for Q2. Revenue rose 28 percent year-on-year (YoY) to Rs 1,890 crore, while EBITDA jumped 40 percent to Rs 565 crore. The EBITDA margin improved by 2.7 percentage points to 29.9 percent. Profit after tax (PAT) surged 232 percent to Rs 555 crore, boosted by the consolidation of TajSATS. Without this consolidation, revenue grew 16 percent, and PAT increased 48 percent to Rs 247 crore.

For the first half of FY24, IHCL reported a 16 percent rise in consolidated revenue at Rs 3,486 crore, while EBITDA climbed 23 percent to Rs 1,061 crore, resulting in an EBITDA margin of 30.4 percent. PAT doubled to Rs 803 crore, helped by a one-time exceptional gain of Rs 307 crore from TajSATS’ consolidation.

The strong performance was attributed to robust demand recovery, with October 2024 consolidated hotel revenue up 16.5 percent and a double-digit growth outlook for the rest of the fiscal year. IHCL’s hotel portfolio reached 350 properties, with 42 new hotel signings, including 12 Taj properties, and expansions into Bahrain and Thimphu. The company will take over the management of Delhi’s iconic Claridges hotel in April 2025 and has also acquired a majority stake in Tree of Life.

At about 10 am, shares of the company were trading at Rs 766, higher by 1.7 percent from the last close on the NSE.