Indian Hotels share price up 1% on robust Q1 results

Shares of Indian Hotels jumped nearly 2 percent in early trade on July 28, after the hospitality major reported a set of strong first earnings. The stock later gave up some of its gains and was trading 1.05 percent higher at Rs 389 at 9.40 am.

Quarterly net profit rose 31 percent year-on-year to Rs 222 crore and revenue 17 percent YoY to Rs 1,516 crore, the company said in a filing to the exchanges yesterday.

EBITDA or operating profit grew 13 percent YoY to Rs 459 crore. Meanwhile, the company is going to acquire 100 percent equity of Zambia-based Pamodzi Hotels Plc, from Tata International Singapore Pte Ltd.

Management Commentary

Commenting on the quarterly performance, Puneet Chhatwal, Managing Director & CEO, said, “IHCL signed 11 and opened 5 new hotels across all its brands. The outlook for the upcoming quarters remains strong with pace of demand driven by domestic consumption momentum, global events, and revival of international arrivals”

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Brokerage Views

Jefferies has given a ‘buy’ rating for the Indian Hotels stock with a target price of Rs 445 per share. The brokerage firm expects the share to be range bound in the near term as revenue, profit after tax and EBITDA grew but were around 5 to 7 percent lower than estimates. Though H2FY24 bodes well for the sector with occupancy boosting events.

Motilal Oswal has given a ‘buy’ rating to the stock with a target price of Rs 440 in a report released post Q1 results. Thus, signifying a potential upside of 14 percent from the coverage price of Rs 385. The brokerage house further stated that, occupancy is expected to remain intact sequentially on better demand going ahead.

Also Read: G20, World Cup will boost demand and foreign tourist arrivals: Indian Hotels CEO

Brokerage firm ICICI Securities has also given a ‘buy’ rating to the stock with a target price of Rs 443 signifying a potential upside of 15 percent from the current market price in a report released on July 28, 2023.

Nuvama institutional equities has given a ‘hold’ rating to the Indian hotel stock with a 12-month target price of Rs 405 in a result update report dated July 27, 2023.

Stock Performance

Indian Hotels stock has given a return of 31.50 percent over the last six months. Thus, outperforming the benchmark Nifty50 index which has given a return of 11.22 percent over the same duration.

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