The motels and tourism sector has gone via rather a lot over the previous few years since covid took the world by storm. Now, after passing via numerous hiccups, the business is more likely to have witnessed a pointy restoration in April-June quarter aided by leisure/transient journey, wedding ceremony season and powerful revival from the enterprise phase, mentioned ICICI Direct in a notice. “Hotel booking data also suggests strong buoyancy in the demand with hotel booking for March-June crossing pre-pandemic levels led by wedding seasons, vacations and IPL matches. Hence, from a Q1FY23 perspective, we expect occupancy levels to improve to ~75% while average room rates are likely to remain higher by 10% QoQ to Rs 8300/room for the premium segment,” the brokerage agency mentioned.
Analysts at ICICI Direct additionally count on decreased fastened overhead prices to help in margin enlargement. During the pandemic, motels structurally realigned their value base to develop into leaner when it comes to value. “Hence, we expect over 9% reduction in operating costs from pre-Covid levels during Q1FY23E, which would help the companies to improve margins,” they added. ICICI Direct mentioned it expects income of our protection universe to extend ~224% YoY, 20% QoQ. While EBITDA margin of 24.4% is predicted towards the loss reported final 12 months.
Result preview
Indian Hotels: Buy
Target value: Rs 290
Analysts are predicting a powerful restoration in income from the home leisure lodge enterprise on an on-year foundation. “Occupancy levels and ARRs in the domestic segment to improve to 76% and Rs 8750/room against 67% and Rs 8250/room reported in Q4FY22,” they mentioned. Revenue of Indian Hotels is predicted to extend 19.3% on quarter and EBITDA of Rs 257.7 crore. Analysts, nevertheless, mentioned internet revenue development can be decrease sequentially attributable to tax changes and distinctive revenue. The inventory has gained 33% in 2022.
East India Hotels: Buy
Target value: Rs 185
In phrases of income, EIH is predicted to submit development of near 300% YoY, 19.4% QoQ led by sturdy revival within the enterprise areas aided by IPL matches and MICE phase. “We expect the company to report an EBITDA margin of over 20% due to strong growth in the revenues. PAT is expected at Rs 25.4 crore,” ICICI Direct mentioned. EIH shares are up 7% to this point this 12 months to now commerce at Rs 134 per share.
Lemon Tree Hotels: Buy
Target value: Rs 78
Shares of Lemon Tree Hotels are up a large 36% to this point in 2022, sharply outperforming the benchmark indices. The firm is predicted to submit the best on-quarter income development of 27.3% within the April-June quarter, in response to ICICI Direct. “Expect an EBITDA margin of over 37% (highest among peers) due to stringent cost controls. Net losses to narrow down sharply to Rs 6.3 crore vs net loss of Rs 39.4 crore last quarter,” the brokerage agency mentioned.
Source: www.financialexpress.com”