Sharekhan's research report on Indian Hotels Company
Indian Hotels Company Ltd (IHCL) delivered yet another quarter of strong performance, with consolidated revenues growing by 86% y-o-y to Rs. 1,625.4 crore (53% versus Q4FY20) while EBITDA margins improved to 32.9% (vs. 19.6% in Q4FY20). . Domestic growth momentum would sustain with room demand staying ahead of room supply in FY2024. A recovery in foreign tourist arrivals will further boost the growth in H2. International properties likely to recover to pre-covid level in FY2024 (currently at 90% of pre-COVID levels). EBITDA margins to cross 33% by FY2025. Asset light model to help in high free cash generation. Minimal investment for scaling up of new ventures. Return profile to improve substantially over the next three years.
Outlook
The stock trades at 19.0x/16.0x its FY2024E/25E EV/EBIDTA. We maintain our Buy recommendation on the stock with revised PT of Rs. 425.
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