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ICICI Direct Report
Indian Hotels Company Ltd. witnessed a sharp rebound in Q2 FY22; revenue reached 72% of pre-Covid levels.
Indian Hotels’ revenues for Q2 FY22 were up 184% YoY, 111% QoQ to Rs 728.4 crore. Ebitda came in at Rs 72.8 crore and net loss reduced to Rs 120.6 crore versus loss of Rs 230 crore last year and loss of Rs 277 crore last quarter.
Domestic segment recovered to 86% of pre-Covid revenues while international portfolio reached 62% of pre-Covid levels.
With the object of becoming debt free, the board has approved a fund raising of Rs 4,000 crore.
Key triggers for future price performance
The ongoing crisis would restrict overall room supply in the industry in next three to four years, auguring well for branded players like Indian Hotels.
Expect business to recover to 97% of pre-Covid levels with Ebitda surpassing pre-Covid levels by FY23E; margins are seen at over 24% in FY23E, which has the potential to further expand to 30%+.
Improved cash flows, equity infusion and divestment of non-core assets are expected to help the company become debt free.
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