Accumulate Chalet Hotels; target of Rs 887: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Chalet Hotels with a target price of Rs 887 in its research report dated July 28, 2024.

Broker Research

July 31, 2024 / 10:52 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Chalet Hotels

We cut our EBITDA estimates by 3%/1% for FY25E/FY26E as we re-align our RevPAR growth assumptions and annuity leasing timelines in light of weaker performance in 1QFY25. Hospitality segment reported same-store RevPAR growth of 4% due to elections, severe heat wave and lower number of auspicious wedding days. Nonetheless, management indicated of a strong recovery in Jul-24. Further, while leasing timelines have witnessed some delay, 90% of the portfolio is expected to be leased out by end of the year, resulting in strong traction in annuity income from FY26E. Though there are early signs of headwinds in RevPAR growth, buoyed by operationalization of ~200 new rooms in Lonavala & Bengaluru coupled with expansion in lease portfolio, we expect revenue/EBITDA CAGR of 19%/25% over FY24-FY26E.

Outlook

We maintain our ‘ACCUMULATE’ rating on the stock with a revised TP of Rs887 (earlier Rs902) as we value the hotel business at EV/EBITDA multiple of 23x (no change in target multiple), annuity portfolio at a cap rate of 8.5% and the residential project at NAV of Rs21 per share.

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