EUR 120.00 For Business Accounts Only

MOSL: Morning India (25/February/20): 1. Indian Hotels (Strategy execution on track); 2. EcoScope (Credit growth weakens further in 3QFY20); 3. Kajaria (ART); 4. Healthcare Monthly

Morning India (25/February/20):

Today’s top research idea
Indian Hotels: Strategy execution on track
** IHIN appears to be firing well on its 'Aspiration 2022' target on EBITDA margin (expansion of 800bp) and portfolio (equal proportion of owned and managed rooms). At its Capital Markets meet, IHIN articulated execution toward this goal - it will achieve 400bp margin expansion by FY20.

** IHIN is well on track to achieve its goal and has made good progress on other strategic initiatives like rebranding of Ginger, monetizing of existing land bank, selling non-core assets, JV with GIC to add rooms and creating alternative revenue streams.

** India's hotel industry performance this fiscal has been impacted by various factors, including Jet Airways shutdown, general elections, and the lack of pick-up in corporate demand due to the economic slowdown.

** However, the underlying thesis of favorable demand-supply led growth in hotels industry remains intact. This will also work in favor of IHIN. On an SOTP basis, we arrive at a TP of INR189. Maintain Buy.

Piping hot news
Wary of inflation, but there is further space for rate cuts: RBI’s Das
While the sharper-than-expected economic downturn in India may have shocked many, the Reserve Bank of India (RBI) started cutting interest rates well in advance in February last year as it had noticed signals of slowing growth momentum, governor Shaktikanta Das said on Monday. Das said RBI’s monetary policy committee recognizes that there is space for further rate cuts even as it keeps an eye on inflation.