Sharekhan's research report on Indian Hotels Company
FY2024 has been eventful with G-20 summit driving strong room demand even in a weak Q2FY24, while Cricket World Cup in October/November 2023 followed by festive season will boost room demand in a seasonally strong Q3FY24. What lies ahead? After an eventful FY2024, Indian hotels industry has good room for growth with foreign tourist arrivals (FTAs) recovering to 56% of pre-COVID levels and domestic tourism recovering to 75% of pre-COVID levels. Higher RevPar and focus on asset-light business model will consistently drive profitability and cashflows for IHCL (eyeing FY25 EBIDTA margins of 33%) in the coming years.
Outlook
We re-iterate our Buy rating on Indian Hotels Company with a revised PT of Rs. 492. Stock is valued at 22x/19x/16x is FY24E/25E/26E EV/EBIDTA. Good earnings growth visibility with structural growth story of hotel industry intact.
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