Shares of a prominent hotel company surged by 1.5 percent to reach today’s high of Rs 581.65 per share, following a bullish recommendation from the Indian brokerage firm ICICI Securities, projecting an upside potential of 11 percent.
Indian Hotels Co. Ltd, A tata group company is engaged in the business of hotels, resorts, and homestays. The firm operates primarily in India. It was incorporated in the year 1899 by Mr. Jamsetji Tata.
Indian Hotels Co. Ltd, is a large-cap stock with a market capitalization of Rs 81,541 crores. On Thursday’s afternoon session, the company’s shares were trading at Rs 578.50 per share, up by 0.99 percent on the stock exchange. Comparing today’s high of Rs 581.65 per share and to a previous close of Rs 572.85 per share, the shares surged by 1.5 percent.
The company’s stocks have generated an overall return of 48.3 percent over the past year and 32.09 percent over the past 6 months.
Taking a look into the financials of Indian Hotels Co. Ltd. The revenue from operations decreased by 3 percent from Rs. 1,964 crores in Q3FY24 to Rs. 1,905 crores in Q4FY24. On a year-on-year basis, it increased by 16.5 percent from Rs. 5,810 crores in FY22-23 to Rs 6,769 crores in FY23-24.
The net profits of the company also witnessed a decrease of 8.1 percent from Rs. 477 crores in Q3FY24 to Rs. 438 crores in Q4FY24. On a year-on-year basis, it increased by 26.3 percent from Rs. 1,053 crores in FY22-23 to Rs 1,330 crores in FY23-24.
Indian brokerage, ICICI Securities initiated a ‘buy’ recommendation on Indian Hotels Co. Ltd with a target price of Rs 640.00 per share, implying an upside potential of up to 11 percent from Thursday’s current price of Rs 576.75 a piece.
ICICI Securities mentions that Indian Hotels Co. Ltd’s (IHCL) EBITDA CAGR over FY24-27E is estimated to be 18 percent. The brokerage report also mentions that as of March 2024, IHCL has 24,136 operational rooms along with a pipeline of 12,953 rooms which are estimated to become operational over FY24–28E.
The company also has capex plans worth Rs 2,500 crores over FY24–27E, as it upgrades its existing tools and technology to grow. They have plans for two new hotels primarily in areas such as New Delhi and Goa. The names of these hotels are Taj Palace and Vivanta Dwarka in New Delhi and Taj Fort Aguda and Taj Holiday Village in Goa.
According to the brokerage report, Indian Hotels have achieved an all-time-high consolidated revenue of Rs 6,952 crores, a 17 percent increase over the previous year. The EBITDA stood at Rs 2,340 crores up by 20 percent. Profit after tax ( PAT) increased by 26 percent, reaching Rs 1,259 crore. The company recorded a free cash flow of Rs 1,162 crores.
IHCL has also expanded its business internationally with new signings from Frankfurt, Dhaka, Bhutan, and Nepal. With 34 openings during the year and 53 signings, Indian Hotels Co. Ltd (IHCL) are currently present in 150 locations.
The brokerage report also mentions that the demand for IHCL’s hotel rooms remains healthy in FY25. Forecasts suggest a double-digit CAGR over FY24–28E.IHCL expects that their ARR( average rate per room) trajectory looks promising in the medium term. Hence, the management remains confident of double-digit CAGR.
The revenue growth estimated in FY25 is that their businesses are expected to grow more than 30% YoY with more offers and optimized costs.
Written by Zahal
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