Buy ITCHOTEL; target of Rs 210: Choice Institutional Equities

Moneycontrol • 5 days ago

Original source

Key Investment Pillars

  • ITCHOTEL's RevPAR growth of 21% YoY is driven by a 520 bps YoY rise in occupancy and 13.3% YoY ARR growth, indicating strong pricing power.
  • The company's operating leverage and cost efficiency have expanded EBITDA margin by 274 bps YoY to 32.0%, supporting earnings momentum.
  • ITCHOTEL continues to scale up its portfolio through inorganic additions and management contracts, with a managed pipeline of 84 hotels and ~8,200 keys.
  • The company's focus on expanding its luxury hotel segment and improving its operating efficiency is expected to drive long-term growth.

Thesis Validation Checklist

  • Investors should watch for sustained RevPAR growth, driven by pricing power and occupancy gains.
  • Expansion of EBITDA margin, driven by operating leverage and cost efficiency, is crucial for earnings momentum.
  • The company's ability to execute its expansion plans, including the development of new hotels and the integration of recent acquisitions, will be key to driving long-term growth.
  • Monitoring the company's debt levels and interest coverage ratio will be essential to assessing its financial health.