Shares of Indian Hotels Company hit their fresh 52-week high of ₹277 in morning trade on BSE on August 10, as many brokerage firms cheered the company's June quarter results.
The company on August 8 reported its Q1FY23 consolidated profit at ₹170.05 crore against a loss of ₹277.34 crore in the same quarter last year. The June quarter of the last year was hit by the pandemic. In Q4FY22, the profit was ₹74.19 crore.
Revenue from operations rose to ₹1,266.07 crore against ₹344.55 crore year-on-year and ₹872.08 crore quarter-on-quarter.
Brokerages find the stock an alluring bet
Many top domestic and global brokerage firms are bullish on the stock even though it has already jumped 50% in the calendar year 2022 so far.
As reported by CNBC-TV18, global brokerage firm JPMorgan maintained an 'overweight' call on the stock but raised the target price to ₹315 from ₹265.
JPMorgan, as per CNBC-TV18, said that the company's Q1 beat estimates o all counts and provides a preview of what an upcycle could look like. The brokerage firm has revised the company's FY23-25 profit estimate by 23%.
Another brokerage firm Jefferies also maintained a buy call on the stock with a target price of ₹325. "The company exceeded pre-Covid performance on all metrics and it is a strong turnaround story," CNBC-TV18 quoted Jefferies saying so.
Among the domestic brokerage firms, Motilal Oswal Financial Services has a 'buy' call on the stock with a target price of ₹320.
"Factoring in a better than expected performance in Q1FY23 from standalone and key subsidiaries such as PIEM and Roots, on the back of higher ARR and occupancy, we raise our FY23 and FY24 EBITDA estimate by 22% and 11%, respectively," said Motilal Oswal.
Motilal Oswal expects the "strong momentum to continue in FY23 and FY24, led by: (a) an improvement in ARR and occupancy on account of favourable demand-supply dynamics, (b) ongoing cost rationalization efforts, (c) higher income from management contracts, and (d) unlocking value by launching reimagined and new brands."
ICICI Direct also maintained a buy call on the stock with a target price of ₹330. "Improved cash flows, equity infusion and divestment of non-core assets to make the company net debt free in FY23E," the brokerage firm said.
ICICI Direct expects the company's revenue CAGR of 40.9% during FY22-24E. It also expects the company's business to recover fully to pre-Covid levels while EBITDA to surpass pre-Covid levels in FY23E. "Margins seen at over 32% in FY24E which has the potential to further expand by nearly 100 bps thereafter," ICICI Direct said.
According to a MintGenie poll, an average of 14 analysts have a ‘strong buy’ call on the stock.
Disclaimer: The views and recommendations are those of individual analysts or broking firms and not of MintGenie.
