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Last Updated : Jul 30, 2019 03:53 PM IST | Source:

Buy TajGVK Hotels and Resorts; target of Rs 220: ICICI Direct

ICICI Direct is bullish on TajGVK Hotels and Resorts has recommended buy rating on the stock with a target price of Rs 220 in its research report dated July 29, 2019.

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ICICI Direct's research report on TajGVK Hotels and Resorts

TajGVK reported healthy margin expansion of 787 bps YoY (25.6%) during the quarter despite flattish revenue growth. Revenue growth remained flat mainly due to seasonal slowdown aided by high base of last year that saw revenue growth of over 22%. Revenues came in at Rs 72.4 crore, flat YoY (below I-direct estimate Rs 78.7 crore). EBITDA, however, increased 43.5% to Rs 18.6 crore (above I-direct estimate: Rs 13.8 crore) with margins expanding 787 bps YoY to 25.6% owing to significantly lower repairs & renovation expenses (Rs 0.87 crore in Q1FY20 vs. Rs 6.78 crore in Q1FY19) leading to a 22% reduction in other expenses to Rs 22.5 crore. Net profit surged 50.5% YoY to Rs 5.9 crore supported by higher operating profit and JV reporting profit of Rs 0.3 crore against a loss of Rs 0.6 crore in the previous year.


We maintain our BUY rating on TajGVK considering the above. Hence, we value the company at 16x FY21E EV/EBITDA and arrive at a target price of Rs 220.

For all recommendations report, click here

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First Published on Jul 30, 2019 03:53 pm