Indian Hotels Company Ltd. share price target

Q1FY22 Results: Results remained weak, mainly impacted by second Covid wave. Revenues were down 44% QoQ to | 344.6 crore. Occupancy at standalone level was at 28.5%. However, average room rate saw a sharp jump of 45%...

Despite the second COVID wave, standalone RevPAR nearly doubled as compared to last year due to ARR growth and occupancy improvement, as the impact this time around was less severe and the recovery was faster as compared to the first wave. Additionally, IHIN's operating performance was strong on the back cost saving measures and operating leverage. Revenue/EBITDA in 1QFY22 was above our estimate. Factoring the same, we...

and new/reimagined brands bodes well for return ratios IH hosted its investors meet, where it articulated its strategy to capitalize on business recovery, focus on new brands and businesses, pursue asset light growth, sustain spend...

Cost optimisation drive to lead healthy recovery in margins After achieving ~75% target set in Aspire 2020, the focus has shifted to R.E.S.E.T 2020. Under this, IHCL is maximising the revenue potential through initiatives. Further, the company is focusing more on improving cost efficiency through various measures. Visible fixed cost per month reduced from | 163 crore to | 118 crore leading to average savings of | 135 crore per quarter. The key levers are 1) decline in staff to room ratio from 1.53 in FY20 to 1.14 in FY21 through redeployment in new properties and multiskilling, 2)...

IH's performance improved sequentially on the back cost saving measures, which led to positive EBITDA at the consolidated level. RevPAR performance has improved sequentially due to an improvement in occupancy. Although EBITDA during 4QFY21 was above our estimate, we have reduced our EBITDA estimate by 69% for FY22E, due to lower occupancy of 50% (v/s 63% earlier) and lesser ARR growth of 17% (v/s 25% earlier) given the current demand scenario on account of the second COVID wave, while maintaining our estimate for FY23E. We maintain our BUY rating on the...

Cost optimisation drive to reap benefits in long run After achieving ~75% target set in Aspire 2020, the focus has shifted to R.E.S.E.T 2020. Under this, IHCL is maximising the revenue potential through initiatives. Further, the company is focusing more on bringing the cost efficiency through various measures. As visible fixed cost per month reduced from | 164 crore to | 120 crore, leading to average savings of | 132 crore per quarter. The key levers are 1) decline in staff to room ratio from 1.53 FY20 to 1.14 during Q3FY21 through redeployments in new properties...

Indian Hotels Company Ltd.'s (IHCL) Q3FY21 result reflected recovery in the domestic leisure segment post unlocking activities in key cities. Staycation, good wedding season and Christmas/New year vacations led to smart improvement in RevPAR over Q2FY21. However, domestic business and overseas operations were laggard and weighed on overall performance of the company. Net sales declined by 59.2% YoY to Rs5,599mn, while EBITDA came in at negative Rs167mn compared to Rs4,257mn in Q3FY20. The company reported net loss of Rs1,332mn. The management guided healthy RevPAR growth to continue in domestic business as roll-out of Covid-19 vaccine paves the way...

Indian Hotels Company Ltd. (IHCL) reported another disappointing quarterly performance as occupancies remained subdued in domestic market. Further, overseas operation deteriorated as Covid-19 pandemic concerns increased in UK and Europe. Net sales declined by 74.5% YoY to Rs2,567mn, while EBITDA came in at negative Rs1,503mn compared to Rs1,605mn in Q2FY20. The company reported net loss of Rs2,521mn. Amid extended lockdown and resilience to leisure travel, occupancies plunged for the industry and IHCL. Further, lower demand led to sharp decline in room rates, denting revenue per available room (RevPAR). The management has guided that...

Cost optimisation drive to reap benefit in long run After achieving ~75% target set in Aspire 2020, the focus has shifted to R.E.S.E.T 2020. Under this, IHCL is maximising the revenue potential through initiatives such as online F&B; business (Qmin), zero tough digital transformation and rationalisation of fixed overheads. These initiatives have added | 135 crore to topline in H1 (| 77 crore in Q1). Also, cost optimisation measures like certain temporary concessions (e.g. employee costs in UK, electricity charges in Maharashtra, re-negotiation of lease, deferring...

RevPAR performance for Indian Hotels (IHIN) standalone improved sequentially, led by improved occupancy levels. The company has been successful in generating an additional revenue stream (with higher EBITDA flow) without deploying additional resources. Cost reduction initiatives undertaken by IHIN have yielded results, wherein EBITDA (incl. other income) stood at INR130m for Sept'20 (v/s loss of INR600m/INR360m for July/Aug'20). This, in our view, is commendable. Factoring in the current demand scenario, we have increased our EBITDA...