Ventive Hospitality Rated New 'Buy' At JM Financial — What It Means For Investors

JM Financial has initiated coverage on Ventive Hospitality with a 'buy' rating and a target price of Rs 890, valuing the company at a 50% premium to Monday's close.

The brokerage's positive outlook is driven by Ventive Hospitality's strong position as a leading luxury hospitality platform, its established track record of development and acquisition-led growth, and its free cash flow generation. This is expected to support future growth opportunities.

JM Financial highlights Ventive's ability to acquire scale and deliver value through its strategic asset ownership and efficient operational.

Ventive Hospitality stands out as one of India's leading luxury hospitality platforms, with 11 operational hospitality assets comprising 2,036 keys located across Pune, Bengaluru, and Maldives. The company's portfolio includes two Ritz Carlton hotels in India and one of the most prominent hotels in Maldives, the Conrad Maldives Rangali Island.

Its hospitality assets command a premium, offering superior guest experiences, strong customer loyalty, and extensive food and beverage offerings. This focus on luxury segments positions Ventive for higher profitability and sustained growth, according to JM Financial.

Ventive Hospitality has a notable track record of development and acquiring properties across various locations and different hospitality segments. Since its inception in 2007, its portfolio has grown from 83 keys in 2007 to 2,036 keys in financial year 2025. This also means expanding to locations like Pune, Maldives and Bengaluru. The company also has upcoming hotels in Varanasi and Sri Lanka.

The company's operating portfolio consists of seven developed hospitality assets with 1,331 keys and four acquired hospitality assets with 705 keys. Ventive has added 1,070 keys since financial year 2019, which represents more than 50% of the number of keys in its portfolio.

The Indian hospitality sector's strong momentum in financial year 2024, particularly in pan-India Revenue Per Available Room growth of 10.7%, positions Ventive Hospitality well, according to the brokerage.

The sector's occupancy moved up to 180 basis points year-on-year, with room rates continuing to grow at high single digits. Demand for hotel rooms remains strong, while new hotel supply remains limited.

JM Financial forecasts a 7.7% growth in room nights in Maldives over financial year 2024-28, with new supply expected. The upcoming opening of the new airport terminal at Velana, Male, is also expected to boost tourism and hospitality in the Maldives.

JM Financial expects Ventive Hospitality to achieve a 16% revenue growth and 24% Ebitda growth over financial year 2024-28, with an estimated 13% Ebitda margin by financial year 2028.

The brokerage anticipates an improvement in India portfolio profitability to grow at 13% during financial year 2024-28, while Ebitda is estimated to grow at 15%. Maldives portfolio is expected to report 18% growth during financial year 2025-28.

Ventive Hospitality is forecast to generate a cumulative Free Cash Flow of Rs 18.2 billion during financial year 2026-34. This strong cash flow profile is considered one of the best in the industry by the brokerage and will be a key enabler for the company.

JM Financial expects Ventive to use its strong cash flow profile and balance sheet strength to aggressively pursue expansion opportunities through acquisitions and mergers. The management team has indicated a strong acquisition pipeline and expects to double its keys over the next five years.

The analyst take on the counter is pretty upbeat as all four of the analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 856.6, implying a upside of 10.8%.