The Indian Hotels Company Ltd., a subsidiary of Tata Group, was incorporated in the year 1902. The company recently announced its Ahvaan 2025’ strategy which essentially focuses on four key pillars including reaching a total of 300+ hotels across the portfolio, clocking a consolidated EBITDA margin of 33% by FY26E with 35% EBITDA share from management contracts and new businesses.
The Ahvaan strategy is an extension of the company's earlier ‘Aspiration 2022’ strategy which focused on asset light expansion and improvement in margins, according to reports.
Shares of Indian hotels’ have increased 28.67 per cent so far in 2022. The stock has zoomed 55.88% in the last one-year period. Further, the stock has risen 107.75 % from its 52-week low of Rs.129.01. With Thursday's closing price of Rs.223.50, the stock is just 18.03% away from its 52-week high of Rs.268.95.
Domestic brokerage house ICICI Securities believes that the growth and margin targets set by Indian Hotels' management are realistic and they estimate FY23E consolidated revenue to grow 54% YoY to ₹46.2 bn (104% of FY20 levels) and FY24E revenue to grow 18% YoY to ₹54.5 bn at an EBITDA margin of 32%. The revenue of the company in April/March is 10% which is higher than pre-covid levels.
The brokerage house has reiterated its Buy rating on Indian Hotels shares with a revised SoTP-based target price of ₹284 per share, earlier it was ₹292. As per research firm, key risks to its rating are fresh Covid waves globally and in India impacting demand and rise in costs denting margins.
“While FY21 was a year of reckoning, its challenges brought with it many opportunities, unlocking which helped us tide through what was a challenging start to FY22. IHCL not only survived but emerged stronger, with a number of industry leading achievements that are noteworthy.” said Mr. Puneet Chhatwal, CEO of IHCL from the FY22 annual report.
An average of 13 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.