Indian Hotels Company Limited (IHCL) - Research Report

Indian Hotels Company Limited is an A /T+1 group Hotels & Resorts company with having Face value of Rs. 10. IHCL is a Tata Group company which is operational in 10+ countries and 125+ locations. In total it has 80+ Spas, 260+ Hotels, 430+ restaurants and 31000+ Rooms to serve its customers. Its Brand Portfolio includes Taj- the unrivalled guardian of grandeur which conjures a panoply of superlatives, SeleQtions which offers legacy of time and a sense of place or a specific theme, Vivanta – a distinctive collection of vibrant hotels and Ginger Hotels a low budget hotel and Ama Stays and Trails - Elegant and charming escapes set in breathtaking locales that combine homely comfort and warm service in hotels segment. It also has Qmin a curated quality cuisine, Taj Sats - enriching travel with delicious and nourishing meals, creating hospitality that never compromises on quality under hospitality brands. Its chain of Food and Beverages includes Golden Dragon, Shamiana, House of Lomad, Machan, House of Ming, seven rivers brewing company, Southern Spice, Bombay Brasserie, Thai Pavilion, Paper moon and Loya. Its world-renowned brand Taj is ranked Strongest brand in India across sectors and industries by Brand Finance in 2023, 2022 and 2020. Taj has been ranked as the World’s Strongest Hotel Brand and India’s Strongest Brand as per Brand Finance Hotels 50 Report 2022 and India 100 Report 2022.

Fundamentals (FY22-23):

CMP	Rs. 382
52 - week high	Rs. 406
52 – week low	Rs. 241
Dividend % (consolidated)	0.26 %
ROCE	13.22 %
BVPS (Rs.)	60.8
Sales (Rs.)	5,810 cr.
Debt to Equity	0.1
P/E ratio	45.94
EPS (consolidated)	Rs. 7.06
P/B ratio	5.77
Market Cap	54,323 Cr.
Face value	Rs. 10.0

Financial Results:

Company’s Net Sales was Rs 1,625.43 crore in March 2023 up 86.39%, Quarterly Net Profit at Rs. 328.27 crore in March 2023 up 342.47% and EBITDA stands at Rs. 564.60 crore in March 2023 up 133.52% as compared to March 2022. Its EPS has increased to Rs. 2.31 in March 2023 from Rs. 0.56 in March 2022.

Key Points:

IHCL has further strengthened its presence with a 400-room hotel Taj branded hotel at Indira Gandhi International Airport’s Terminal 3 in New Delhi and a 120-room hotel, Ginger Kochi, MG Road in Kochi and entered new markets like Taj Ganga Kutir Resort & Spa, Raichak in West Bengal, and Taj and Vivanta branded hotels in Dhaka, Bangladesh. Leading in the leisure segment, IHCL signed a SeleQtions in Kumbhalgarh and Naukuchiatal. Vivanta and Ginger, having added new locations to their network are growing at a healthy pace.
IHCL will be stepping into Gangtok in Sikkim, Tawang in Arunanchal Pradesh, Jaisalmer in Rajasthan and adding to its portfolio in Mumbai, National Capital Region (NCR), Kolkata, Ahmedabad, Srinagar, Tirupati, Ranthambore among others this financial year.
It recently opened The Crown, Bhubaneswar – IHCL SeleQtions hotel in Odisha. The hotel inspired by the cultural heritage of Odisha is located in the heart of Bhubaneswar and its first hotel in Jammu in the union territory of Jammu and Kashmir, Vivanta Jammu, City Centre which offers panoramic views of the Himalayas.
It recently launched J Wellness Circle, its holistic wellness brand, on the International Yoga Day. It is Inspired by traditional Indian healing wisdom and based on principles of Ayurveda and Yoga. It will offer curated experiences for rejuvenation of mind, body and soul.
The company recently announced its partnership with Tata STRIVE for a hospitality-focused skill centre at Umaid Bhawan Palace, Jodhpur, aimed at nurturing talent from economically weaker and socially disadvantaged local communities.
It recently signed the opening of a Vivanta-branded hotel in Guwahati, Assam which is slated to open by 2026 and Taj Gandhinagar Resort & Spa in Gujarat, the luxurious getaway is a serene oasis with a world-class spa set amidst a verdant paradise.
The company has also has announced its sustainability commitments for the year 2030 under Paathya, weaving in sustainable and responsible practices in business operations. Starting From elimination of plastic straws, replacing plastic-wrapped dry amenities with eco-friendly substitutes, introduction of bottling plants to initiating Zero-single use plastic hotels in the country.
Its Rambagh Palace, Jaipur has been rated as the World’s No 1 Hotel in the coveted 2023 Travellers’ Choice Awards by TripAdvisor, the world’s largest travel site.
It recently announced the signing of a SeleQtions branded hotel in Indore, Madhya Pradesh and a Vivanta branded hotel in New Gurugram, Haryana.
It also unveiled The Maharaja Suite at the capital’s landmark, Taj Mahal, New Delhi. The suite design is a tribute to the world-renowned symbol of Air India, welcoming the national carrier back in the folds of Tata group.
Company recently announced that its landmark hotel, The Taj Mahal Palace, Mumbai is now 100% green. In its drive to minimise its environmental impact, the hotel in addition to using renewable energy, has also implemented water conservation, and waste reduction measures.
Company’s iconic Taj clocked a century as it announced its 100TH TAJ HOTEL after signing its 2^nd Taj Hotel in Cochin.
Company has also announced the signing of two new hotels under Vivanta and Ginger brands in Ayodhya, Uttar Pradesh. The 100-room Vivanta will offer an all-day diner, large banqueting spaces, and recreational facilities including a pool, and health club. The 120-room Ginger will house Qmin, the all-day diner serving local and global cuisines, meeting rooms, and a fitness centre.
Last but not the least the company also opened The Yellow House, Anjuna - an IHCL SeleQtions hotel in Goa. It is nestled in the lively neighborhood of Anjuna, it is carefully restored hotel which blends traditional Goan Portuguese style with modern luxury.

In last 3 years the stock gave a return of 363.74% as compared to the rise of Sensex and Nifty in the same period.

India's travel and tourism revenue is projected to show an annual growth rate of CAGR 13.59% and projected to reach a market volume of USD 31.35bn by 2027. In October with the start of World Cup 2023 which is going to happen in India will give very good boost to Hotel Industry and Hotels are expected to see 100% occupancy during that time followed by festive seasons as well as marriage season and IHCL is well poised top enjoy the cream being one of the biggest Hotels chains in India. The company has a strong portfolio of 191 operating hotels under its different brands and another 79 hotels in pipeline as on June 2023. Mutual Fund Holding have increased by 0.8% in the last quarter to 22.3% and its Debt/ Equity ratio is 0.1 which is very less and shows healthy financial positions. Considering the financial book of the company, hotels in pipeline backed by the brand legacy of Taj Hotels and its other brands company is good to have in portfolio for long term period.

HET ZAVERI

info@smartinvestment.in

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