Accumulate Chalet Hotels; target of Rs 820: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Chalet Hotels with a target price of Rs 820 in its research report dated January 26, 2024.

Broker Research

January 29, 2024 / 18:33 IST

Accumulate

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Chalet Hotels

We cut our FY24E EBITDA estimate by 2.9% as we re-align our leasing timeline assumptions for rental business and downgrade the stock to ‘ACCUMULATE’ with revised TP of Rs820 (Rs753 earlier) given sharp appreciation in last 6 months. Chalet reported a decent performance as RevPAR increased 18% YoY to Rs7,838 (PLe of Rs7,718) with hospitality EBITDA margin of 46.2%. While FTA revival (34% in 9MFY24 versus 58% in 9MFY20) is taking longer than expected, contracted rate for corporate business is up by 12-20% indicating buoyancy in ARR is here to stay. Though the commercial leasing timelines have witnessed some delay, handover at Tower-1 in Powai has already started. Further, leasing for Tower-2 in Bangalore (0.3mn sq ft) is expected to start from 4QFY24. Buoyed by operationalization of ~200 new rooms at Lonavala & Bangalore coupled with expansion in lease portfolio, we expect revenue/EBITDA CAGR of 21%/25% over FY23-FY26E.

Outlook

We value the hotel business at EV/EBITDA multiple of 21x (earlier 20x; IHCL trades at 25x FY26E EBITDA), annuity portfolio at a cap rate of 8.5% and the residential project at NAV of Rs14 per share. Downgrade to ACCUMULATE.

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