Buy Indian Hotels Company; target of Rs 976: Sharekhan

Sharekhan's research report on Indian Hotels Company

Indian Hotels Company Ltd’s (IHCL’s) Q3FY25 numbers were strong with domestic like-for-like (LFL) RevPAR growth at 13% y-o-y, management fees rising 32% y-o-y and new businesses seeing 40% y-o-y growth. Consolidated revenue/adjusted PAT (including Taj SATS) rose 29%/40% y-o-y, respectively. Strong momentum set to continue in Q4 led by large-scale regional events, weddings and continued business and leisure demand. IHCL maintained guidance of double-digit LFL revenue growth in FY25. With 55 signings and 20 openings in 9MFY25 (20 signings and 8 openings in Q3), IHCL is on track to reach 700 hotels by 2030 (360 hotels at Q3FY25-end), with a strong focus on capital-light expansion.

Outlook

We maintain a Buy with a revised PT of Rs. 976. Stock trades at 36x/29x/24x its FY25E/26E/27E EV/EBIDTA, respectively.

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