ICICI Securities research report on Indian Hotels Co
We believe IHCL is well poised to benefit from the expected recovery in the hotel business cycle from H1FY23 (Apr’22) and are enthused by the company’s efforts to leverage its existing brand equity to focus on new business segments, focus on cost optimisation, asset-light management contract model to expand room portfolio, and net cash balance sheet post Rs40bn of equity fund raise through a rights and QIP issue in H2FY22. Key risks to our rating are fresh Covid waves globally and in India impacting demand and rise in costs denting margins.
Outlook
While Q4FY22 was an Omicron impacted quarter leading to 22% QoQ decline in IHCL’s consolidated revenue, we reiterate our BUY rating with a revised SoTPbased target price of Rs292/share (earlier Rs285), valuing the stock on 22x Mar’24E EV/EBITDA.
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