Buy Taj GVK Hotels; target of Rs 190: ICICI Direct

ICICI Direct's research report on Taj GVK Hotels

Taj GVK reported a mixed set of numbers. While revenues were below our estimates, EBITDA was above our estimate mainly led by a decline in raw material cost and power & fuel cost Revenues increased 2.2% YoY to Rs 59.6 crore (below I-direct estimate of Rs 62.2 crore). The EBITDA margin increased 91 bps YoY to 22.6% (above I-direct estimate of 21.2%) in Q1FY18 mainly due to a decline in raw material expenses (down 5.3% YoY) and power & fuel cost (down 4.3% YoY).

Outlook

Given this, we maintain our BUY rating on the stock with a target price of Rs 190 /share (i.e. at 19.0 x FY19E EBITDA). For all recommendations report, click here

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