Buy Indian Hotels Company, target price Rs 399: ICICI Securities

ICICI Securities has buy call on Indian Hotels Company with a target price of Rs 399. The current market price of Indian Hotels Company is Rs 320.


Indian Hotels Company, incorporated in the year 1902, is a Mid Cap company (having a market cap of Rs 45467.01 Crore) operating in Tourism & Hospitality sector.

Indian Hotels Company key Products/Revenue Segments include Income from Rooms, Restaurants & Other Services for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 1257.57 Crore, down -2.75 % from last quarter Total Income of Rs 1293.19 Crore and up 67.17 % from last year same quarter Total Income of Rs 752.28 Crore. Company has reported net profit after tax of Rs 124.38 Crore in latest quarter.

The company’s top management includes Mr.N Chandrasekaran, Mr.Puneet Chhatwal, Mr.Venu Srinivasan, Mr.Mehernosh Kapadia, Ms.Anupam Narayan, Mr.Nasser Munjee, Ms.Hema Ravichandar, Mr.Venkataramanan Anantharaman. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 142 Crore shares outstanding.

Investment Rationale
With demand momentum sustaining in Q4FY23 as well with strong leisure demand and increased business travel, the brokerage raises its FY23-25E consolidated revenue estimates by 7% and its FY23/24/25E EBITDA estimates by 14/17/9%respectively as operating leverage plays out.

ICICI Securities upgrade its rating to BUY from ADD with a revised SoTP-based target price of Rs399/share (earlier Rs366) driven by earnings upgrades and roll forward to Mar’25 EV/EBITDA (earlier Dec’24EV/EBITDA) at an EV/EBITDA multiple of 22x considering strong ARR trajectory.

Promoter/FII Holdings
Promoters held 38.19 per cent stake in the company as of 31-Dec-2022, while FIIs owned 19.0 per cent, DIIs 26.36 per cent.