Jefferies bullish on Indian Hotels; sets target at Rs 785

Indian Hotels has caught Jefferies's attention, reiterating its Buy rating with a target price of Rs 785, reflecting its strong performance and robust growth outlook.

The stock has delivered impressive returns, climbing 68 per cent YTD and tripling since the launch of its AHVAAN 2025 strategy in May 2022.  

The company has already surpassed one of its key AHVAAN 2025 goals, with over 350 hotels in its portfolio against a target of 300. Its EBITDA margin stands at 32 per cent for FY24, close to the 33 per cent goal outlined in the roadmap. Management expects strong growth in the second half of FY25, fueled by cyclical tailwinds and demand-supply imbalances in the hospitality sector.  

Indian Hotels is set to benefit further from the upcoming wedding season, with RevPAR (revenue per available room) forecasted to grow by 10 per cent, as per Jefferies. The brokerage has also raised its EBITDA and PAT growth forecasts by 2 per cent and 4 per cent, respectively.  

The hospitality sector posted its strongest results in the second quarter of FY25, highlighting the favourable demand environment. With a focus on maintaining its growth momentum, Indian Hotels is poised to meet its AHVAAN 2025 targets and capitalize on the structural demand uptrend.  

Outlook  
Management remains optimistic about sustaining growth guidance, supported by cyclical industry tailwinds and robust demand dynamics. As the demand-supply gap in the industry continues to favour hoteliers, Indian Hotels is well-positioned to leverage this opportunity for sustained performance.