ICICI Direct's research report on Indian Hotels
IHCL’s Q4FY21 performance broadly remained ahead of our estimates led by a better performance from leisure segment and prudent cost management leading to positive EBITDA for the quarter. Consolidated revenue improved ~10% QoQ to Rs 615 crore (vs. I-direct estimate: Rs 542.1 crore) while it was down 42.1% YoY. Domestic occupancy improved to 72% vs. 52% last quarter due to traction in the leisure segment. Revenue per room (RevPAR) was up 29.3% QoQ to Rs 3329/room. Domestic leisure destination led the recovery with destinations like Goa, Rajasthan reporting healthy occupancy in Q4FY21. Business destinations continue to stay affected with Mumbai, Delhi and Bengaluru reporting average occupancy of ~35-38%. Total operating expenditure declined 36.4% YoY to Rs 543.7 crore. As a result, IHCL managed to report EBITDA of Rs 71.3 crore (vs. I-direct estimate: EBITDA loss of Rs 31.1 crore). Consolidated net loss came in at Rs 91.3 crore (vs. net loss of Rs 118.9 crore in Q3). The company signed 17 hotels in the current fiscal, adding over 2,200 rooms to its portfolio.
Outlook
We continue to maintain BUY rating with an unchanged target price of Rs 150 (i.e. 22xFY23E EV/EBITDA).
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