Hold Indian Hotels; target of Rs 617: ICICI Securities

ICICI Securities research report on Indian Hotels

Indian Hotels Co. Ltd.’s (IHCL) Q4FY24 reported in-line consolidated revenue of INR 19bn, as Q4FY24 standalone RevPAR grew 10% YoY with ARRs rising 4% and occupancy by 440bps YoY to 79.1%. According to IHCL, demand drivers remain intact heading into FY25, and it is targeting double-digit consolidated revenue growth in FY25 with new businesses expected to grow more than 30% YoY. We raise our FY25E/26E revenue by 3%/4%, and FY25E/26E EBITDA by 2% each, building in accelerated room openings and higher standalone ARR growth of 9% for FY25/26E vs. 7% earlier.

Outlook

However, post the 27% rise in stock price over the last three months, we downgrade our rating to HOLD, from Buy, with a revised SoTP-based TP of INR 617 (earlier INR 581) as we assign 26x Mar’26E EV/EBITDA (earlier 25x). Key upside risk: higher ARR growth and key downside risk: discretionary consumption slowdown.

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