Rakesh Jhunjhunwala portfolio: ICICI Securities has ‘Buy’ on Tata Group stock


Domestic brokerage and research firm ICICI Securities believes that the growth and margin targets set by Indian Hotels’ management are realistic and the brokerage estimates FY23E consolidated revenue to grow 56% and FY24E revenue to grow 18% year-on-year (YoY) at an EBITDA margin of 32%. 

The brokerage house has reiterated its Buy rating on Indian Hotels shares with an unchanged SoTP-based target price of 292 per share. As per ICICI Securities, key risks to its rating are fresh Covid waves globally and in India impacting demand and rise in costs denting margins.

Indian Hotels Co Ltd’s (IHCL) announced its ‘Ahvaan 2025’ strategy which essentially focuses on four key pillars including reaching a total of 300+ hotels across the portfolio, clocking a consolidated EBITDA margin of 33% by FY26E with 35% EBITDA share from management contracts and new businesses.

It also focuses on achieving a 50:50 ratio between owned/leased and management contract room keys and retaining a net cash balance sheet while pursuing its growth plans. 

“The Ahvaan strategy is an extension of company’s earlier “Aspiration 2022″ strategy which focused on asset light expansion and improvement in margins,” the note stated.

The company reiterated its commitment to 18 new hotel openings in FY23E and maintaining a similar annual run-rate to get to a 300 hotel portfolio over FY23-26E including 100 Taj hotels, 75 SeleQtions/Vivanta hotels, 125 Ginger hotels and 500+ Ama stays and trails hotels. The asset light management contract route will continue to be preferred with over 75% of incremental key additions.

As per recent BSE shareholding pattern, Indian ace investor and stock market trader Rakesh Jhunjhunwala holds 1.11% stake in the company whereas his wife Rekha Jhunjhunwala has 1.01% equity as of March 2022.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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