ICICI Securities research report on Indian Hotels
Indian Hotels Co. Ltd.’s (IHCL) Q2FY24 consolidated revenue of INR14.3bn was marginally lower than I-sec estimate of INR14.4bn as Q2FY24 enterprise RevPAR grew 16% YoY but international hotels saw weak demand. According to the company, demand drivers remain intact heading into H2FY24 as weddings, MICE and recovery in international tourist arrivals would continue to drive demand. We currently build in LTL RevPAR growth of 10% in FY24E and 6% in FY25E and FY26E and similar increase in domestic subsidiaries (Ginger/PIEM/Benares/United hotels), and along with new room additions, we estimate 10% revenue CAGR and 15% EBITDA CAGR over FY23-26E.
Outlook
We retain our BUY rating with a revised SOTP-based TP of INR 458 (earlier INR 443) as we roll forward to 23x Sep’25E EV/EBITDA, implying 22%+ upside from CMP. Key risks are fresh Covid waves and discretionary consumption slowdown.
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