Indian Hotels reached a new record high on the BSE, reaching ₹311.45 per share. The shares increased by at least 5% throughout the day and maintained an optimistic tone. Indian Hotels reached a close-to-record high of ₹310.05 each during the closing hours, up by ₹13.55 or 4.57%.

The market value of the business is around ₹44,039.49 crore.

Indian Hotels shares on Dalal Street have increased by more than ₹127 or about 69% year to date. The shares have had remarkable triple-digit gain over the past year, rising by 118.73%. On September 3 of last year, the shares were trading around ₹142.46.

Additionally, the shares of Indian Hotels have made a significant comeback from the negative tone brought on by the epidemic that caused a statewide lockdown in 2020. In just two years, the share price has increased by more than 215%, or 3.15 times. On September 4, 2020, it was around 98.7.

In the portfolio of late market tycoon Rakesh Jhunjhunwala, Indian Hotels is among the top 10 most valuable equities. Rakesh, who was frequently referred to as the “Warren Buffett of India,” passed away on August 14 as a result of health issues. His family receives his estate, which includes his stock and possessions.

Rakesh and Rekha Jhunjhunwala each had 1,57,29,200 equity shares as of June 30, 2022, which is 1.11% and 1.01%, respectively. The pair owns 30,016,965 equity shares together, or 2.1% of the business.

IHCL reported a net profit of ₹170.05 crore in the first quarter of FY23, down from ₹277.34 crore in the same period of FY22. In addition, the Q1 PAT increased by 129.21% from ₹74.19 crore in the Q4FY22. Consolidated revenue rose dramatically by 267.46% to ₹1,266.07 crore in Q1FY23 from a year before, when it was just ₹344.55 crore, and by 45.18% from ₹872.08 crore in Q4FY22.

Should you invest in Indian Hotels shares?

Sumant Kumar and Meet Jain, research analysts at Motilal Oswal, noted in their Q1FY23 review report for the hotel sector that the company’s ORR in 1QFY23 exceeded pre-pandemic levels in almost all hotels, with Ginger’s ORR declining due to its strategy to raise room rent. Meanwhile, a focus on cost optimization led to a decrease in fixed cost as a percent of sales to 35% in 1QFY23 from 46% in 1QFY

Furthermore, they stated that because foreign inbound traffic has not increased, Palaces and Safaris have not yet seen pre-Covid levels of traction. However, this is likely to change by the end of CY23. In the next two to three years, Indian Hotels anticipates Qmin to generate at least ₹1 billion in enterprise revenue. In the remaining months of FY23, the business guided to launch 14 additional hotels and sign 15 more hotels.

The Motilal analysts report also noted that 8,100 rooms are slated for construction by Indian Hotels, which accounts for 25%–40% of the operating and total portfolios. It aims to open a Qmin restaurant in each Ginger hotel and has long-term forecast of 33% EBITDA margins with 35% margins from the new company.

The management of Indian Hotels anticipates 40–45% EBITDA margins for the Ginger plus Qmin and other portfolios, with a target of 55%+.

The analysts at Motilal concluded their analysis by saying, “Maintain BUY on IH with an FY24-based target price of ₹320.”

According to Ventura Securities analysts, we commence coverage on IHCL with a BUY and a price target of ₹384 per share (FY25 PE of 46X), representing an increase of 37% from the CMP of ₹280 over the next 24 months.

Ventura’s analysts note said, “Over the period of FY22-25E, we expect IHCL’s revenue/ EBITDA to grow at a CAGR of 27.1%/67.2% (low base effect) to ₹6,281.9 cr/ ₹1,890.9 cr, respectively. The net profit is expected to scale to ₹1,195.8 cr (compared to a loss of ₹265.4 cr), while EBITDA and net margins are expected to improve by 1690bps (to 30.1%) and 2410bps (to 19.0%), respectively. Return Ratios—ROE & ROIC—are set to improve by 1580bps (to 12.0%) and 1950bps (to 19.5%), respectively.”

One of the top hospitality organisations in India, Indian Hotels offers a wide range of services, including hotels, resorts, jungle safaris, palaces, spas, and in-flight food.