Prabhudas Lilladher's research report on Chalet Hotels
We increase our EPS estimates by 1.2%/0.4% for FY24E/FY25E respectively, as we re-align our RevPAR assumptions in light of ARR breaching the Rs11K mark this quarter. We expect current buoyancy in room rates to continue in light of 1) ongoing G-20 events 2) upcoming cricket world-cup and 3) expectation in FTA revival. In addition, Chalet will benefit from asset sweating that is expected to begin in next 6-8 months as 1) 88 rooms at Novotel Pune will begin operations in May 2) 168 rooms at Hyderabad will start operations from June and 3) roughly ~1mn sq ft of leasable area in Bangalore will start yielding rent soon as handover process is already underway. Buoyed by rate reset and operationalization of hotel/commercial assets, we expect revenue/PAT CAGR of 23%/54% over FY23-FY25E.
Outlook
Retain ‘BUY’ with a SOTP (refer exhibit 8 for more details) based TP of Rs504 (earlier Rs498).
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