Indian Hotels Company Ltd. share price target

1 May 2019 Consolidated revenue grew 10.1% YoY to INR45.1b. EBITDA increased 24% YoY to INR8,297m, with the margin improving 200bp YoY to 18.4%. 7% YoY to INR8,430m in 4QFY19, primarily with higher ARRs (up 7% YoY, despite a 200bp dip in the occupancy) driving EBITDA growth of 15% YoY to INR2,945m. Although the consolidated performance continued to be driven by growth at the standalone level, the 16%+ revenue growth at key subsidiaries (St James, Piem and US) in FY19 was noteworthy. Management maintained its RevPAR growth guidance of 6%. (i) IHIN targets to add 1,800-2,000 rooms in FY20, predominantly under the management contract route. (ii) Capex for standalone/consolidated businesses is guided at INR2.25-2.5b/INR3.5b. The underlying thesis on the Indian hospitality industry remains intact, given the favorable demand-supply scenario. Moreover, management remains confident of achieving RevPAR growth of 6% and is focused on cost efficiencies, which would lend more support to EBITDA.

The Indian Hotels Company Limited is an Indian hospitality company that manages a portfolio of hotels, resorts, jungle safaris, palaces, spas and in-flight catering services.

19 February 2019 Hospitality In the last years Capital Market Day Meet, IH had shared its Aspiration 2022 vision to achieve EBITDA margin expansion of 8% by improving revenue by 3-4% and reducing cost by 3-5%. According to a STR Horwath report, occupancy of domestic hotels stood at 65.3% (+0.2pp) with ARR growth of 1.8% to INR5,846 in 2018. In Dec18, IH rebranded and relaunched the Ginger Goa hotel, following which ARR increased by 30-40%. We note that Ginger hotels are operated by the companys subsidiary, which contributes 4%/2% of overall revenue/EBITDA (as of FY18). The flow through to EBITDA will be higher as incremental cost involved in operating rooms has not increased in proportion to ARR growth. The company aims to achieve EBITDA margin expansion of 8% by 2022, of which 3- 5% would come from cost measures.

ICICI Securities Ltd | Retail Equity Research Indian Hotels reported a good set of Q3FY19 numbers. Consolidated revenues increased 10.5% YoY to | 1323.5 crore (vs. I-direct estimate of | 1302.1 crore) mainly led by healthy turnaround of international segment with RevPAR growth of 9.4% YoY. RevPAR of domestic...

Reiterate BUY with revised TP of Rs 168 @ 20x Dec20E EV/E. Indian Hotels (IHCL) 3QFY19 was in-line but healthy. Standalone revenue growth at 5.6% (ARR +4.7%) was a bit soft, but offset by robust costs management (EBITDA +13% YoY). Subsidiaries performance was even healthier led by international operations on account of ARR growth and rupee depreciation.

revenue grew 11% YoY to INR32.7b, with margin expansion of 230bp YoY to 16.7% (EBITDA up 28.1% YoY to INR5,454m). 6% YoY to INR8,027m, primarily led by higher ARRs. Consequently, EBITDA increased 13% YoY to INR2,607m. Subsidiary (domestic and international) revenue/EBITDA grew 19%/50% YoY to INR5,208m/INR749m, mainly driven by international subsidiaries (US and UK) due to higher occupancy, ARRs and currency tailwinds. RevPAR of international subsidiaries increased 9.4% YoY to USD208 (occupancy up 490bp to 72.8%; ARR up 2% YoY to USD286). IHIN has guided for rate hikes for corporate customers in 4QFY19. Thus, the underlying thesis of favorable demand-supply led growth in the Indian hospitality industry remains intact. We maintain our FY19/20/21 earnings estimates CAGR (FY18-21) of 10% to INR53.9b in revenue and of 24% to INR12.

Indian Hotels 21 November 2018 Fundamentals for the Indian hospitality industry are turning favorable, with demand growth (10-12%) likely to outpace supply growth (5% over FY18-23). The robust level of new inventory (room supply growth of 10.6% v/s room demand growth of 10.2% over FY08-18) was keeping hotel room rates in check (industry ARRs declined at a compounded annual rate of ~3% over FY08-18). Such favorable demand- supply dynamics were last observed in the previous upcycle, when occupancy jumped from 65% to 69-72%. Strong presence in the high demand, high-occupancy micro markets of Mumbai, NCR, Bangalore and Goa, places IHIN well to cater to rapid growth in the domestic market as it has 8-14% market share across regions. According to our calculations, Mumbai, NCR, Goa and Bangalore constitute ~55% of IHINs domestic revenue and ~51% of domestic EBITDA.

BUY with TP of Rs 150 @ 20x Sep20E EV/E in-line with its historic average. Indian Hotels (IHCL) 2QFY19 consolidated performance was in-line and healthy, in a seasonally weak quarter. Revenue/EBITDA at Rs 9.6/1bn grew by 15.3/81.8% YoY. APAT increased to Rs 0.4bn from loss of Rs 0.6bn in 2QFY18 led by higher EBITDA and lower finance costs (-34.8% YoY) owing to Rs 15bn rights issue in 2HFY18.

ICICI Securities Ltd | Retail Equity Research Indian Hotels reported a good set of Q2FY19 numbers. Consolidated revenues increased 13.3% YoY to | 964.5 crore (vs. I-direct estimate of | 909.6 crore) mainly led by 8.1% YoY increase in RevPAR of domestic segment against industry RevPAR growth of 3.7% YoY. RevPAR of the international segment also showed an improvement with growth of 5.4% YoY during the quarter EBITDA margin improved 388 bps YoY to 10.3% YoY. It remained...

ICICI Securities Ltd | Retail Equity Research Indian Hotels reported a mixed set of Q1FY19 numbers. Consolidated revenues increased 7.5% YoY to | 979.7 crore (vs. I-direct estimate of | 970.4 crore) mainly led 9.7% YoY increase in RevPAR of domestic segment. However, RevPAR of international segment remained weak with a drop of 0.8% YoY during the quarter Though EBITDA margin improved 136 bps YoY to 11.3% YoY, it...