MOSL: INDIAN HOTELS CO (Buy)-International subs drive consol. Performance-Corporate rate hike likely in 4Q
Indian Hotels Co: International subs drive consol. performance; Corporate rate hike likely in 4Q
(IH IN, Mkt Cap USD2.3b, CMP INR136, TP INR189, 39% Upside, Buy)
- Revenue/EBITDA in line: IHIN's consol. revenue grew 11% YoY to INR13.2b (our estimate: INR13.1b) in 3QFY19. EBITDA increased 20% YoY to INR3,355m (our estimate: INR3,402m), with the margin expanding 190bp YoY to 25.4% (our estimate: 26.0%). Adj. PAT rose 36% YoY to INR1,208m (our estimate: INR1,393m). For 9MFY19, consol. revenue grew 10.5% YoY to INR32.7b, with margin expansion of 230bp YoY to 16.7% (EBITDA up 28.1% YoY to INR5,454m).
- Performance driven by international subsidiaries: Standalone revenue grew 6% YoY to INR8,027m, primarily led by higher ARRs. Consequently, EBITDA increased 13% YoY to INR2,607m. Subsidiary (domestic and international) revenue/EBITDA grew 19%/50% YoY to INR5,208m/INR749m, mainly driven by international subsidiaries (US and UK) due to higher occupancy, ARRs and currency tailwinds. RevPAR of international subsidiaries increased 9.4% YoY to USD208 (occupancy up 490bp to 72.8%; ARR up 2% YoY to USD286).
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.
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