Indian Hotels Q1 Results

The Indian Hotels Company Ltd.’s Q1 FY25 results are in line. Standalone revenue/EBITDA/Adjusted Profit after Tax stood at +4.6/11.3/10.9% and consolidated profit at +5.7/9.6/10.2% YoY.

Management has guided for double-digit revenue growth (between 10% and 12%) in the near to medium term, driven by supply and demand mismatch, brand strength, market positioning, healthy pipeline of MC rooms, network effect and execution.

We like the commercial positioning of Indian hotels, but the high base, lack of supporting events in FY25 unlike FY24 (G20, Cricket World Cup, ICC matches in India with other countries, elections) and increasing supply are key risks in our view.

We cut our FY25/26E revenue estimates by 2.2/2.1% and EBITDA estimates by 4.3/5.8% to factor in the weakness in Q1. We reiterate the ‘Sell’ rating with a target price of Rs 540 at 24x H1FY27E EBITDA (from Rs 545 earlier at 24x FY26E EBITDA).

We expect revenue/Ebitda/APAT to grow at a CAGR of 10%/14%/20% over FY24-27E. The valuation of Indian hotels at around 33/28.5/24.5x FY25/26/27E EBITDA and 50.5/42.5/35.5x PE leaves limited margin for error, especially if the hotel upcycle reverses, which is a risk in our view. This is despite a ~13% correction in the stock price from the peak.

Click on the attachment to read the full report:

Dolat Capital Indian Hotels Q1 FY2025 Results Update.pdf

Read the document

DISCLAIMER

This report is authored by an external party. NDTV Profit does not guarantee the accuracy of its content and is not responsible for it in any way. The content of this section does not constitute investment advice. For this, you should always consult an expert based on your individual needs. The opinions expressed in the report are those of the authoring entity and do not represent the opinions of NDTV Profit.

Users are not licensed to copy, modify or distribute the content without permission from the original owner.