Motilal Oswal has given Buy recommendation for Indian Hotel with a target price of Rs. 278 in its research report issued on Jun 22, 2022
Motilal Oswal’s research report on Indian Hotel
Hotel Brands (Traditional business): IH has introduced AHVAAN 2025 strategy, under which it expects to reach a portfolio of 300 hotels, comprising Taj (100), Vivanta and SeleQtions (75), and Ginger (125). For details on AHVAAN 2025, refer to IH Analyst meet report. As on 31st March 2022, IH has 20,581 rooms, after adding around 1,156 rooms in FY22. While owned rooms increased from 10,202 in FY21 to 10,364 in FY22, the managed rooms increased from 6,496 to 7,439 over the year. IH has a pipeline of 60 Hotels (over 7,500 rooms) with a well-diversified mix of Taj (32%), SeleQtions (9%), Vivanta (19%), and Ginger (40%). Under this robust Hotel pipeline, the share of management contracts is 74%. The remaining 26% is owned by the company. And 92% of the owned hotels belong to the Ginger brand.
Outlook
Like FY22, we expect a strong recovery in FY23 and FY24, led by: a) an improvement in ARR once economic activity normalizes; b) improved occupancies, led by business travelers as well as the Leisure segment; c) cost rationalization efforts; d) an increase in F&B income as banqueting/conferences normalizes; and e) higher income from management contracts. We reiterate our Buy rating with a SoTP-based TP of INR278.
More Info
At 15:29 hrs Indian Hotels Company was quoting at Rs 223.35, up Rs 8.15, or 3.79 percent.
It has touched an intraday high of Rs 224.40 and an intraday low of Rs 214.25.
It was trading with volumes of 129,142 shares, compared to its thirty day average of 162,753 shares, a decrease of -20.65 percent.
In the previous trading session, the share closed down 3.13 percent or Rs 6.95 at Rs 215.20.
The share touched its 52-week high Rs 268.85 and 52-week low Rs 128.99 on 04 May, 2022 and 23 August, 2021, respectively.
Currently, it is trading 16.92 percent below its 52-week high and 73.15 percent above its 52-week low.
Market capitalisation stands at Rs 31,724.63 crore.