Buy Indian Hotels; target of Rs 165: ICICI Direct

ICICI Direct is bullish on Indian Hotels has recommended buy rating on the stock with a target price of Rs 165 in its research report dated August 07, 2019

Indian Hotels reported a weak set of Q1FY20 numbers. While domestic network hotels witnessed 4.2% growth YoY, the international business continued its turnaround growing 8.2% YoY. Overall revenues increased by 4.1% YoY to Rs 1020 crore (vs. I-direct estimate of Rs 1065 crore) during the quarter. EBITDA on a reported basis was at Rs 173 crore while for a like-to-like comparison, EBITDA was at ~Rs 128 crore (vs. I-direct estimate of Rs 131 crore). Adjusted EBITDA margins for the quarter came in at 12.5%, improving ~120 bps YoY (broadly in line with I-direct estimate of 12.3%). PAT for the quarter was at Rs 5.7 crore. However, the same is also not comparable. On a comparable basis, PAT was at Rs 14 crore for Q1FY20, below I-direct estimates of Rs 22.9 crore on account of higher tax provisions during the quarter.

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