Indian Hotels Company clocks new all-time high after stellar Q3 show; Jefferies signals buy, but with a downside

IHCL share price: Shares of Indian Hotels Company Limited (IHCL) in Friday’s trade (February 2) notched a fresh record high of Rs 518.85, climbing 4.96 per cent after reporting strong performance in the October-December period.

In the December quarter, the company’s consolidated topline grew 15 per cent on-year to Rs 2,004 crore. Total revenue for the quarter was led by a 21 per cent growth in room revenue, as noted in the company’s press release.

PAT, or profit after tax, at the company also logged a high double-digit growth of 18 per cent on-year to Rs 452 crore. Further, the margin at the hospitality company increased by 1 percentage point to 38.5 per cent in the December-ended quarter of FY24.

Highlighting IHCL’s performance in Q3, the company said Indian Hotels outperformed the industry on domestic same-store RevPAR with a premium of 70 per cent versus peers. 

Demand buoyancy in the international portfolio led to an occupancy of 70 per cent, resulting in a RevPAR growth of 9 per cent over the previous year, it added.

Additionally, the company guided double-digit consolidated revenue growth for FY25.

How do brokerages view IHCL stock after its Q3 show?

Jefferies maintained its ‘buy’ call on the stock with a lower target of Rs 450, implying a potential downside of 9 per cent from the last close. The brokerage for the hospitality player said that the company continued to deliver strong performance.

Its standalone EBITDA for Q3 came in line with the brokerage's estimates, while the beat was led by a sharper rebound at the subsidiary sequentially. Further, new businesses and better asset management would continue to drive profitability.

Morgan Stanley also retained its ‘overweight’ rating on the stock with a target of Rs 490.

Share price performance

Shares of the Tata Group hospitality arm in the past year have given 54 per cent returns.