Buy Indian Hotels Company; target of Rs 380: Sharekhan

Sharekhan is bullish on Indian Hotels Company has recommended buy rating on the stock with a target price of Rs 380 in its research report dated November 11, 2022.

Broker Research

November 15, 2022 / 18:31 IST

Sharekhan's research report on Indian Hotels Company

Indian Hotels Company Ltd (IHCL) delivered strong performance in a seasonally weak quarter. Revenue grew by 69% y-o-y and EBIDTA margin improved to 23.9% (vs. 10% in Q2FY2022). Standalone occupancy stood at 70% while ARRs grew by 11% in Q3. Industry expects 150-200 bps improvement in occupancies in Q3FY2023 vs Q3FY2020; ARRs to grow by 8-10%. IHCL management witnessed strong bookings in the month of October and expects Q3 to be strong quarter. Further, key international properties are expected to recover to pre-covid levels in the coming quarters. On track with its ambition of achieving 33% EBIDTA margin, no debt on books and 50:50 hotel portfolio between own:management contract, the company will deliver consistent profitable earnings growth in the coming years. Management is confident of ending FY2023 with EBIDTA margins of 30%.

Outlook

Stock correction of 7% post results provides good opportunity to enter quality hospitality play. We maintain a Buy on the stock with an unchanged price target of Rs. 380.

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