'Buy' Chalet Hotels Shares Says ICICI Securities, Hikes Target Price, Sees 45% Upside — Here's Why

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ICICI Securities Report

Chalet Hotels Ltd. has announced the completion of the acquisition of 141 keys five-star luxury hotel – The Westin Resort and Spa, Himalayas in Rishikesh at an acquisition cost of Rs 5.3 billion.

We estimate the hotel to reach stabilised occupancy of 65% in FY27E and generate Ebitda of Rs 546 million in FY26E and Rs 735 million in FY27E.

Incorporating the Westin hotel earnings, we raise FY26/27E revenue and Ebitda by 6-7% and estimate hotel Ebitda CAGR of 19% over FY24-27E at Ebitda margin of 44-45%.

Retain Buy with SoTP-based revised target price of Rs 1,017 (earlier: Rs 965), based on Mar’27E, incorporating Westin hotel, valuing Chalet Hotels at 23 times EV/Ebitda, 8% cap rate for rental assets and residual value of Vivarea, Bengaluru residential project.

Key risks: Slowdown in hotel demand and office leasing.

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