Anand Rathi's research report on Indian Hotels
We attended the Indian Hotels’ investor day. The company reckons that demand will completely revive in FY23 subject to the speed of vaccination. It wants to focus on and expand its new brands and business, started in the last 1-2 years and aims at a further 10% revenue (~50-80% EBITDA flow through) from these businesses in the next 2-3 years. It reiterated its focus on driving asset-light profitable revenue growth, which would expand RoCEs. On the subsidence of the Covid-19 pandemic, we expect it to outclass others, driven by its dominance in the Indian hotels sector, superlative brand equity and well-diversified portfolio across business segments and price-points.
Outlook
We retain our Buy on the stock with a new TP of Rs175, earlier Rs130 (sum-of-parts, valuing at 19x consolidated FY23E EBITDA From 16x earlier).
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