Buy Indian Hotels; target of Rs 440: Motilal Oswal

Motilal Oswal is bullish on Indian Hotels recommended buy rating on the stock with a target price of Rs 440 in its research report dated June 13, 2023.

Broker Research

June 14, 2023 / 13:01 IST

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Motilal Oswal's research report on Indian Hotels

IH’s (Indian Hotels’) FY23 annual report highlights the strong growth witnessed by the company during the year, on the back of robust traction in core business. The strong pipeline of 10,145 rooms (~48% of operational portfolio) coupled with rapidly scaling re-imagined new businesses are expected to drive the diversified growth path for the company going ahead. IH has focused on tapping into adjacent categories and re-imagining its existing businesses. TajSATS and Ginger (re-imagined businesses) have witnessed significant success and continue to have a robust outlook going ahead. The revenue of subsidiaries (both domestic and international) were up ~22% from the pre-covid levels, while the operating profitability has doubled over the same period, led by strong growth in operating performance of all domestic subsidiaries. IH witnessed robust growth in its revenue (90% YoY to INR58.1b), driven by strong traction across all businesses. This, along with its cost management activities, led to a surge in its operating profitability (EBITDA grew 4.5x YoY to INR18.1b in FY23). The company generated a healthy cash flow during the year (CFO of INR16.5b in FY23, up 2.5x YoY), led by improvement in working capital and business activities.

Outlook

We expect IH’s revenue/EBITDA/Adj. PAT CAGR of 12%/19%/21% over FY23-25. We reiterate our BUY rating with an SoTP-based TP of INR440.

For all recommendations report, click here