Hold Indian Hotels Company; target of Rs 116: ICICIdirect

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26 Aug, 2025 12:21

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ICICIdirect.com's report on Indian Hotels Company

"The Q2FY15 performance came in below estimates with standalone net loss of Rs 7.6 crore (vs. I-direct estimate: loss of Rs 3.7 crore). However, the revenue growth remained better at 6.3% YoY. On the other hand, subsidiary’s revenue growth remained lower than domestic growth at 3.2% YoY, leading to overall consolidated revenue growth of 4.6% YoY to Rs 937 crore. Lower operating margins (standalone – 4.8%, consolidated – 1.5%) along with forex loss of Rs 6.8 crore led to a net consolidated loss of Rs 97.7 crore (standalone loss - Rs 7.6 crore) for the quarter."

"At the CMP of Rs 107, the stock is trading at 18.0x and 15.1x its FY15E and FY16E EV/EBITDA, respectively. With no further major impairment, we expect the balance sheet strength to improve coupled with a pick-up in demand, going forward. In terms of earnings, we expect sales CAGR of 8.0% during FY14-16E with improved margins. Hence, we revise our target price upwards to Rs 116/share (i.e. at 16.0x FY16E EV/EBITDA and 3.0x FY16E book value). We change our rating from BUY to HOLD with a target price of Rs 116", says ICICIdirect.com research report.

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