HDFC Securities is bullish on Indian Hotels Co has recommended buy rating on the stock with a target price of Rs 176 in its research report dated May 02, 2019.
HDFC Securities' research report on Indian Hotels Co
4QFY19 revenue/EBITDA/ APAT grew by 7.2/15.3/ 27.8%. ARR grew by a healthy 7% YoY, while occupancy eased from 76% to 74%. This lead to an all time high margin of 34.9% in 4QFY19. Over FY19, ARR growth was at 2.9% and occupancy grew by <100bps to 68%. F&B revenue grew in double digit while costs were up by 6% YoY. Management guided for RevPAR (ARR * Occupancy) growth of ~6% YoY, as demand continues to outpace supply. We believe this is feasible and have baked it in our estimates. Incremental room additions to be ~5% (200 rooms) in 4QFY20 (The Connaught, Delhi).
Outlook
IHCL’s 4QFY19 was in-line. The strong standalone show (primarily domestic) was off-set by a weak performance of subsidiaries (mostly international). Reiterate BUY with TP of Rs 176 (20x FY21E EV/e).
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