Sharekhan's research report on Indian Hotels Company
Indian Hotels Company Ltd’s (IHCL’s) Q2FY2025 performance on like-for-like (LFL) basis was strong despite a lean season with hotel business revenues growing by 16% y-o-y and EBIDTA growing by 30% y-o-y. Consolidated (including Taj SATS) revenues/EBIDTA grew by 27%/41% y-o-y, respectively. Despite a high base, revenues (excluding Taj SATS) will grow by over 10% in H2; October 2024 revenues grew by 16.5% y-o-y. Robust wedding season and FTAs will drive growth in November-December 2024. Gross cash stood at Rs. 2,460 crore in H1FY2025; Cash flow conversion improved to 67% in H1FY2025 versus 56% in H1FY2024.
Outlook
IHCL focuses on prudent capital allocation strategy to drive growth. We maintain a Buy rating with a revised PT of Rs. 805. Stock currently trades at 31x/26x/21x its FY25E/26E/27E EV/EBIDTA, respectively.
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