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HDFC Securities Retail Research
With 182 hotels and 21,094 rooms, the Indian Hotels Company Ltd. is a perfect play in the hospitality sector as its portfolio straddles across some of the best properties, locations and multiple income groups. It boasts of an unparalleled market share of 11.6% by inventory in Indian market with a presence in 77 cities.
Given the industry needs, this portfolio is capital intensive but Indian Hotels is in the middle of restructuring its portfolio to achieve a 50:50 mix between its owned/leased and managed hotels (FY22 mix – 45:55).
The company is strongly placed to benefit from this strong demand and limited upcoming supply trend, as the company plans to add ~8,700 rooms (up 42% from FY22 inventory level) over FY23-FY26 period.
The underpinnings of Indian Hotels' success lies in:
pricing power due to increased demand and reduced supply in market,
strong pipeline,
an asset-light strategy,
rejuvenation of Ginger brand, and
increasing contributions from ancillary businesses and services like Qmin, ama, Chambers, among others.
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