Buy Indian Hotels; target of Rs 410: Motilal Oswal

Motilal Oswal's research report on Indian Hotels

Indian Hotels (IH) reported the highest ever consolidated revenue/EBITDA in 3QFY23 (up 23%/40% v/s 3QFY20) fueled by strong 25% ARR growth (v/s 3QFY20) to INR15,456 while occupancy stood at 72% (down 120bp v/s 3QFY20). Management contract revenue surged 86% v/s 3QFY20 to INR1.2b. Occupancy (like-for-like) in the business remained 4pp above 3QFY20 levels to 77% in 3QFY23, while the same for Leisure/Palaces/Ginger was lower by 1pp/6pp/7pp to 65%/57%/61%, respectively. Factoring in the 3QFY23 performance, we raise our FY23/FY24/FY25 EBITDA estimates by 7%/6%/5%, respectively, aided by robust demand due to increase in inbound travel, India assuming the G20 presidency (meetings across India) and major events in the coming years such as the ICC ODI cricket World Cup.

Outlook

Maintain BUY with an SoTP-based TP of INR410.

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Indian Hotels - 01 -01-2023 - moti