Q3FY21 Result Update - Indian Hotels - ICICI Direct

IHCL's revenues for Q3FY21 improved 118.1% QoQ to Rs. 559.9 crore (vs. I-direct estimate: Rs. 453 crore) while it was down 59.2% YoY. Domestic leisure destination led the recovery with destinations like Goa, Rajasthan and Kerala reporting 80%, 55% and 51% occupancy, respectively, in Q3FY21. Business destinations continue to remain affected with Mumbai, Delhi, Bengaluru reporting average occupancy of 38%, 39%, 41%, respectively. Average occupancy in domestic market was at 47.4% vs. 32.3% reported in Q2FY21. Average room rates also recovered sharply by 53% QoQ to Rs. 8300/room vs. Rs. 5424/room in Q2. Total operating expenditure declined 39.1% YoY to Rs. 577 crore with 27% reduction in fixed costs. Fixed cost per month reduced from Rs. 164 crore to Rs. 120 crore during 9MFY21 leading to average savings of Rs. 132 crore/quarter. As a result, consolidated EBITDA loss narrowed down to Rs. 16.7 crore (vs. I-direct estimate: EBITDA loss of Rs. 15.8 crore) from EBITDA loss of Rs. 150 crore in Q2FY21. On a standalone basis, the company reported positive EBITDA of Rs. 48 crore led by sharp recovery in leisure destinations vs. EBITDA loss of Rs. 87 crore in Q2FY21. Consolidated net loss came in at Rs. 118.9 crore (vs. net loss of Rs. 230 crore in Q2).

Valuation & Outlook

We believe the current pandemic environment will make strong players like IHCL even stronger once normalcy resumes. With the resumption of economic activity, we expect tourism to witness a sharp recovery in FY22E. Given the company's strong parentage and brand visibility along with meaningful cost optimisation measures, concerns with respect to liquidity are now being negated. Hence, we maintain BUY rating with a revised target price of Rs. 150 (i.e. 28xFY22E EV/EBITDA) (earlier Rs. 125).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IndianHotels_Q3FY21.pdf

Shares of INDIAN HOTELS CO.LTD. was last trading in BSE at Rs.119.4 as compared to the previous close of Rs. 120. The total number of shares traded during the day was 208237 in over 2226 trades.

The stock hit an intraday high of Rs. 121.8 and intraday low of 118.65. The net turnover during the day was Rs. 24908651.

Source : Equity Bulls

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