Rakesh Jhunjhunwala Indian Hotels stock rises after Q1 profit jumped to Rs 170 crore; should you buy, hold or sell?

Shares in the portfolio of Rakesh Jhunjhunwala India Hotels Company (IHCL) jumped 1% on Wednesday, after the company announced consolidated net profit of Rs 170 crore for the quarter ended June 2022, mainly due to the sharp increase in demand as occupancy and rates exceeded pre-COVID levels. IHCL’s revenue jumped 249.45% to Rs 1,293 crore in the quarter under review from Rs 370 crore a year ago. The hotel major announced its best first quarter in company history. The company also expects double-digit revenue growth in the second quarter, said Managing Director and CEO Puneet Chhatwal. So far this year, IHCL’s share price is up 47%, outperforming the benchmark Nifty 50 index, and analysts expect up to 18% more upside going forward. Shares of Indian Hotels Co were trading at Rs 274, up 1.62% on NSE intraday.

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Should you buy, hold or sell?

Motilal Oswal: Buy
Target price: Rs 320; Up: 18%

According to analysts at Motilal Oswal, India Hotel Co’s asset-light model along with new reinvented revenue-generating avenues, with higher EBITDA margin, bodes well for an expansion of RoCE. “We expect the strong momentum to continue in FY23 and FY24, driven by: improved ARR and occupancy due to favorable supply dynamics and demand; ongoing cost rationalization efforts; increase in revenue from management contracts; and unlocking value by launching reinvented and new brands,” they said. The brokerage maintains a call to buy on the stock with a target price of Rs 320 per share. It raised its EBITDA estimate for FY23 and FY24 by 22% and 11% respectively.

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Edelweiss Securities: Buy
Target price: Rs 316; Up: 16.1%

Edelweiss Securities in its report noted that Indian Hotels had a phenomenal quarter potentially its best ever first quarter. Current trends continued into July 22 and with international arrivals picking up, there is visibility on continued strong traction. The brokerage company thus increased its EBITDA FY23, FY24 by 14% and 10% respectively, by integrating higher RevPars. The brokerage maintains the ‘buy’ rating with a DCF-based target price of Rs 316, down from Rs 274 earlier.

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(The stock recommendations in this story are from the respective research analysts and brokerage firms. takes no responsibility for their investment advice. Investments in the capital markets are subject to rules and regulations. Please consult your investment advisor before investing.)