Indian Hotels Share Price Hits Record As Jefferies Raises Target On Q2 Profit Surge

The Indian Hotels Co.'s share price hit a record high on Friday after its second-quarter profit more than tripled, beating analysts' estimates, prompting Jefferies to hike the target price on the stock.

The profit of the hospitality firm, which operates the Taj brand, increased 225% year-on-year to Rs 582.7 crore in the quarter ended Sept. 30, according to an exchange filing on Thursday. Analysts tracked by Bloomberg had pegged the profit at Rs 248 crore.

"For fiscal 2025, we continue to maintain a guidance of double-digit revenue growth led by the sustained growth in new businesses, not like-for-like growth and healthy same-store performance," the company said in a press release.

This is reflected in a strong 16.5% growth in consolidated hotel segment revenue in October, which is set to accelerate in the remaining months of Q3.

In its investor presentation, the company said that its hotel revenue bounced back in the September quarter, supplemented by TajSATS consolidation.

Jefferies said it has raised its target price for the stock to Rs 785 from Rs 690 earlier, implying 14.8% upside. "Given consolidation of TajSATS operations, our Ebitda estimates rise by 9-13% for fiscal 2024-2027," it said.

"We build 12% CAGR in room count, 8-10% RevPAR growth, and margin expansion on operating leverage," it said.

Share price of the company rose as much as 5.59% to Rs 722 apiece, the highest level. It pared gains to trade 5.1% higher at Rs 721 apiece as of 10:22 a.m., compared to a flat NSE Nifty 50.

The stock has risen 64% on a year-to-date basis and 70.8% in the last 12 months. Total traded volume so far in the day stood at 3.83 times its 30-day average. The relative strength index was at 62.62.

Of the 21 analysts tracking the company, 12 maintain a 'buy' rating, six recommend a 'hold' and three suggest a 'sell,' according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 0.5%.