Buy Indian Hotels Company; target of Rs 910: Sharekhan

Sharekhan's research report on Indian Hotels Company

Indian Hotels Company Limited (IHCL) unveiled its ‘Accelerate 2030’ strategy in its Capital Market Day providing a glimpse of its path towards doubling its revenues and improving its return profile. Consolidated revenues are set to grow by 2x to Rs. 1,5000 crore by 2030; Like-for-like (LFL) RevPar to grow at CAGR of 8%, management income to clock a 15% CAGR and Re-imagined businesses contribution to increase to 25% growing at 30% CAGR over the next five years. Focus remains on consistently improving the EBIDTA margins led by a better mix and operating leverage and prudent capital allocation plan with strong balance sheet; RoCE to improve to 20% by 2030 from current 15%.

Outlook

We maintain a Buy rating with a revised PT of Rs. 910. Stock trades at 34x/28x/23x its FY25E/26E/27E EV/EBIDTA, respectively.