Indian Hotels’ Q2 result misses estimate: Stock closes over 6% lower; Jefferies maintains Buy — Check target price

Indian Hotels share price: Indian Hotels Company Limited declared its quarterly report for the month ending September on Tuesday, November 10. Investors responded negatively and the stock declined more than 6 per cent while closing. 

At the counter, Indian Hotels stock quoted Rs 317 apiece on NSE, which was 6.41 per cent on the lower side. On BSE, the stock traded at Rs 317, which was 6.48 per cent down. 

Indian Hotels Share Target Price

Jefferies has maintained Buy for Indian Hotels and has given a target of Rs 380 apiece. 

According to Jefferies, the profits matched the expectations but margins were below expectations. The report said that Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins slipped to 24 per cent against 30 per cent QoQ. Also, employee costs grew 5 per cent on a QoQ basis.

Indian Hotels Share: Expert’s Opinion 

Nilesh Jain, AVP, Centrum Broking Ltd. reasoning the decline said that the Q2 numbers missed the estimate and were not satisfactory. “The Q2 numbers even though it has clocked a profit of 122 crores and topline we have seen a growth of 67 per cent, it has missed the estimate as well as expectation,” Jain said.

Analysing the Indian Hotel’s stock movement Nilesh Jain said that the stock had seen a 10 per cent rise before the Q2 results were declared. “Before Q2 result, the stock moved from Rs 308 apiece to Rs 340 apiece so roughly we have witnessed a 10 per cent movement and whatever numbers have come are partially in line with the estimates and all this has been discounted in the price. The case is we are witnessing profit booking and the market awaits a new trigger now,” he added. 

Further, Jain has suggested to add on the decline, and opined, “For Indian Hotels, we need to wait for some correction for a fresh entry and it looks slightly weaker in the Autumn time frame but good to add on declines.” 

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Indian Hotels has recorded good results YoY basis but lagged on QoQ basis

Indian Hotels Company Limited recorded a total income of Rs 1257.57 crore against 1293.19 crore QoQ which was 2.75 per cent down. Whereas, on YoY basis, the total income recorded in the corresponding quarter of the previous year was Rs 752.28 crore.

Total Expenses increased more than 4 per cent QoQ basis, for the month ending September, the total expense was at Rs 1101.2 crore against Rs 1053.12 crore in the previous quarter. 

Indian Hotels Company Ltd recorded a Consolidated Profit After Tax (PAT) of Rs 122 crores in Q2 FY 2022-23 compared to a loss of Rs 121 crores in the previous year.

It recorded an EBITDA of Rs 319 crores in Q2 FY 2022-23. 

Earnings per share for the quarter and half year ended September 30, 2021, have been adjusted for the bonus element in respect of the Rights issue of shares in the previous year.  

Indian Hotels said in the regulatory filing: “The business for the first quarter of the previous year was impacted due to the outbreak of the third wave of COVID-19. However, the high pace of vaccinations, easing of COVID-19 restrictions, and pent-up demand resulted in recovery, mainly in domestic leisure travel, in the second and subsequent quarters of the financial year 2021-22.”

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