Kotak remains positive about hotel stocks, raises target price of IHCL, Chalet, Lemon Tree, Samhi Hotels; here's why

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₹7,560 per day in 11 months of the financial year 2024 (11MFY24). The exit room rate for February 2024 at ₹8,900 per day (up 7 per cent YoY) scaled a new peak, with occupancy at 73 per cent, implying a revenue per available room (RevPAR) of ₹6,500 per day (up 10 per cent YoY). "The strength in ARRs gives us improved visibility for FY25E, leading to an upward revision of 2-5 per cent in ARRs across coverage companies, implying up to a 6 per cent revision in FY25E EBITDA," Kotak said.

Also Read: Multibagger stock: Oriana Power share price soars over 1000% in 8 months. What's driving this green energy stock? As per Kotak's estimates, the earnings revision is higher for Indian Hotels Company (6 per cent for FY25E and 10 per cent for FY26E) and Chalet Hotels (6 per cent for FY25E and 7 per cent for FY26E). Kotak has raised the fair value of Indian Hotels Company to ₹620 from ₹535 and that of Chalet Hotels to ₹900 from ₹790 owing to the higher ARR improvement seen in premium hotels.

"In the case of Indian Hotels Company, the earnings revision also includes lower operating costs, as reflected in the earnings of 9MFY24, in addition to a revision in room rates. For Chalet, the earnings revision also factors in the acquisition of a new property in the NCR and the recent equity infusion," said Kotak. Also Read: Multibagger Stock: Jhandewalas Foods surged over 1,900% in 1 year, 310% in 2024 YTD "In the case of Indian Hotels Company, the earnings revision also includes lower operating costs, as reflected in the earnings of 9MFY24, in addition to a revision in room rates.