2025-05-15-Jefferies-ITC酒店（ITCHOTEL）_强劲表现；着眼于更快的投资组合扩张_12页_584kb

ITC Hotels Summary

Core Content

ITC Hotels (ITCH) has delivered a strong performance in its 4QFY25, with revenue and EBITDA growth of 17% and 28% YoY, respectively, reaching Rs10.6bn and Rs4.12bn. This growth was driven by a robust RevPAR increase of ~17% and higher-than-expected other income, leading to a 40% YoY growth in PAT. The EBITDA margin in 4QFY25 was 38.9%, up 140bps YoY. For FY25, the company reported consolidated revenue and EBITDA growth of 17% and 21% YoY, respectively, with an EBITDA margin of 34% (+90bps YoY). RevPAR growth for FY25 was ~10% YoY.

Main Points

Financial Performance

• 4QFY25:

  • Revenue: Rs10.6bn (+17% YoY)
  • EBITDA: Rs4.12bn (+28% YoY)
  • PAT: Rs2.579bn (+40% YoY)
  • EBITDA margin: 38.9% (+140bps YoY)
  • RevPAR: ~17% growth, supported by 14% ARR growth and 79% occupancy in the India portfolio.

• FY25:

  • Revenue: Rs35.6bn (+17% YoY)
  • EBITDA: Rs12.1bn (+21% YoY)
  • PAT: Rs6.376bn (+15% YoY)
  • EBITDA margin: 34% (+90bps YoY)
  • RevPAR: ~10% growth.

Portfolio Expansion

• Accelerated FY30 expansion targets to 20K keys (220 hotels) from 18K keys (200 hotels).
• Greenfield projects include 200 keys in Vizag, 120 keys in Puri, and 100 keys in Bhubaneshwar, totaling ~400 keys.
• Operational keys in the managed portfolio grew by ~10% to ~7,700 (of ~13,300 total keys).
• The company is targeting more than one hotel opening per month for the next 24 months, with a pipeline of 4500+ keys.

Business Mix

• ~70% of the total keys will be in the managed portfolio by 2030, up from ~58% currently.
• Mgmt fees are expected to grow significantly, with estimates of ~1,888 million in FY28E.
• The company is increasing its focus on asset-light models to improve margins and growth.

Key Information

Valuation

• Price Target: Rs240 (+19% from current price)
• Valuation Methodology: Based on 30x FY27 EV/EBITDA.
• Estimates:
  • EBITDA CAGR: 13% over FY25-FY28e
  • PAT CAGR: 21% over FY25-FY28e
  • EPS: Rs2.91 (FY25), Rs3.72 (FY26), Rs4.52 (FY27)

Investment Thesis

• ITCH is a strong #2 in the listed hotels space with a diversified portfolio.
• Near-term growth is expected from greenfield expansion and increased share of asset-light business.
• The company is expected to benefit from the cyclical recovery in the hotel sector.
• Post-demerger, the company's independent performance is expected to re-rate its stock.

Risk/Reward Scenarios

• Base Case: Rs240 (+19%), based on 9% CAGR in RevPAR and 16% CAGR in EBITDA for FY24-FY27.
• Upside Scenario: Rs280 (+39%), based on 12% CAGR in RevPAR and 25% CAGR in EBITDA.
• Downside Scenario: Rs160 (-21%), based on 6% CAGR in RevPAR and 8% CAGR in EBITDA.

Sustainability

• The company has set long-term sustainability goals, including:
  • LEED Zero Carbon status for all owned hotels.
  • Exceeding 2050 GHG sectoral emissions targets.

  • 99% solid waste reuse/recycling.

  • LEED Zero Water status for >50% of owned hotels.
  • 40% reduction in fresh-water consumption from 2018 baseline.

Key Questions to Management

• How do you plan to increase green energy usage in the power mix?
• What is the roadmap to eliminate single-use plastic in operations and onboard vendors for local sourcing?

Catalysts

Positive

• Diversified hotel presence across regions.
• Increasing occupancy rates post greenfield ramp-up.
• Change in mix toward management contracts business, which can improve margins.

Negative

• Macroeconomic slowdown could reduce consumer spending.
• Pandemic resurgence might impact occupancies.
• Slow ramp-up in Sri Lanka operations.

Financial Projections

Valuation Ratios

Investment Recommendation

• Rating: Buy
• Price Target: Rs240
• Expected Total Return: 15% or more over the next 12 months.

Analyst Information

• Prateek Kumar - Equity Analyst
• Raghav Malik - Equity Associate
• Contact: prateek.kumar@jefferies.com and rmalik1@jefferies.com

Key Assumptions

• Total Revenue CAGR: 13% for FY25-FY28
• India Owned Revenue CAGR: 12%
• Mgmt Contracts Revenue CAGR: 31%
• International Owned Revenue CAGR: 22%
• RevPAR CAGR (India): 10%
• ARR Growth (India Owned): 6% in FY26E, 7% in FY27E
• Capex: Rs3,500 million in FY25A, decreasing to Rs4,500 million in FY28E

Conclusion

ITC Hotels is positioned for continued growth with a strong performance in FY25, accelerated expansion plans, and a shift toward asset-light models. The company is expected to benefit from a recovery in the hotel sector and its sustainability initiatives. Despite the risks, the investment thesis remains strong, and the company is currently rated as a Buy with a price target of Rs240.