MOSL: INDIAN HOTELS (Buy)-Steadily walking the talk on ‘Aspiration 2022’-GIC deal to support growth
Indian Hotels: Steadily walking the talk on ‘Aspiration 2022’; GIC deal to support growth without diluting balance sheet strength
(IH IN, Mkt Cap USD2.5b, CMP INR146, TP INR186, 27% Upside, Buy)
- As part of its ‘Aspiration 2022’ strategy, IHIN aims to reduce costs by 3-5pp via initiatives such as (a) entering into an arrangement that will save power cost to the tune of INR70m/year for Taj Lands End and Taj Mahal Hotel and (b) providing shared services to hotels located in vicinity.
- Commentary from industry players suggests that the first two months of the ongoing quarter were marred by lower turnouts due to elections and a slowdown in airline traffic (such a trend was also evident during the 2014 Lok Sabha elections). This was an industry wide phenomenon, with key hotel players too witnessing a slight dip in occupancy and flat ARRs. However, the dust now appears to be settling down with a recovery already starting to take shape from Jun’19.
- IHIN has entered into a joint venture (JV) with GIC for investing INR40b to acquire fully operational hotels in India over a period of three years. Thus, with debt-to-equity of 1:1, IHIN’s share of equity would be INR6b over three years. Additionally, IHIN would earn fee income for managing the hotels.
Indian Hotels is primarily engaged in the business of hoteliering and air catering. Co. operates under the brand "Taj Hotels Resorts and Palaces"and runs the hotels under the brands "Taj", "Gateway" and "Ginger" hotels. As of Mar 31 2010, Taj Hotels Resorts and Palaces was comprised of 66 hotels in 42 locations across India with an additional 16 international hotels in the Maldives, Malaysia, Australia, U.K., U.S., Bhutan, Sri Lanka, Africa and the Middle East. Co. also operates Taj Sats Air Catering Ltd. as a joint venture with Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. Additionally, Co. operates the Indian Institute of Hotel Management, Aurangabad.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.