Indian Hotels Share Price Plunges Over 4% After Q4 Results
In a setback for the hospitality industry, Indian Hotels’ share price plummeted over 4% on Thursday following the release of its March quarter results. The company reported a 29.36% increase in consolidated profit after tax to 438.33 crore for the quarter ended March 2024, compared to a profit of 338.84 crore in the same quarter last year.
However, a surge in total expenses from 1,254.52 crore to 1,416.77 crore dampened investor sentiment. Total income for the quarter under review rose to 1,951.46 crore from 1,654.54 crore in the corresponding period last year.
Analysts have expressed caution in the wake of these results. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, believes that a break below the immediate support level of 580 could trigger further selloffs, potentially towards 560.
Nuvama Institutional Equities, a domestic brokerage firm, reported an in-line Q4FY24 performance with a standalone RevPar increase of 15% (LFL adjusted for Ginger Mumbai effect). While the performance of subsidiaries like Ginger (Roots Corp.) is considered strong and consistent, US activities remain weak.
Indian Hotels has announced bold capital expenditure plans of 2,500 crore for the fiscal years FY25–27E. Nuvama Institutional Equities maintains a “hold” rating on the stock and has increased its target price from 476 to 578, valuing the company at 26x FY26E EBITDA.
Antique Stock Broking also maintains a “hold” rating and a target price of 500, valuing Indian Hotels at 24x EV/EBITDA on FY26E EBITDA. The brokerage highlights the company’s expectation of double-digit revenue growth in FY25 and a protracted upswing in the hotel sector driven by rising demand and constrained supply expansion.
Indian Hotels aims to expedite the development of new hotel brands in developing micromarkets in metro areas and Tier 2 and Tier 3 cities. Despite the drop in share price, analysts remain optimistic about the long-term prospects of the hospitality industry, citing rising demand and the potential for growth in new and reinvented brands.
