Indian Hotels Q3 Results Review  — Dolat Capital Reiterates 'Sell' On Rich Valuations

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Indian Hotels Company Ltd.’s Q3 FY25 performance was in line and healthy. Consolidated revenue/Ebitda/adjusted profit after tax grew +29/31.3/28.8% YoY. Revenue/Ebitda growth (excluding Taj SATS) was impressive at 15/21% YoY.

Enterprise level RevPAR growth at 13% on a same-store basis was healthy too.

The company maintains a positive growth outlook for the near term (especially near term viz. Q4 FY25/Q1 FY26). However, we believe this growth is getting front-loaded. As FY25 will be the third year of industry outperformance, it may pose a challenge for FY26/27E growth. Inherent cyclicality, economic slowdown, high base, competition and high valuations are some of the key risks.

We broadly maintain our FY25-27E estimates. We increase our target multiple from 25 times to 30 times FY27E enterprise value/Ebitda in the backdrop of changed consumer behaviour, Indian Hotels’ superior execution and demand-supply mismatch (albeit catching up).

We reiterate ‘Sell’ rating with revised target price of Rs 775 @ 30x (Pre IndAS) FY27E EV/E (versus Rs 630 @ 25x Pre IndAS) due to rich valuations.

We expect revenue/Ebitda/APAT CAGR of 16/19/23% over FY24-27E. Indian Hotels trades at ~36/31x FY26/27E EV/E and 60/50x PE.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.