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Limited supply in key markets in future
Taj GVK Hotels & Resorts (Taj GVK) reported INR 691 mn sales, up 9.8% Y-o-Y,
but down 1.5% Q-o-Q. It posted ORs of 64-79% for its hotels in Hyderabad
against 75% in Chennai and 74% in Chandigarh. ARRs grew flat-to-marginally,
both Q-o-Q and Y-o-Y. The company sounded cautious on any big jump in ARRs
and mentioned that 5% rise is certain; beyond that it is difficult to comment. No
major supply is expected in Hyderabad in the next 1-2 years. In Chennai, supply
is coming in at INR 10,000 plus range, where as Taj GVK works at sub INR 5,500.
In Chandigarh, JW Marriott is coming up with a 300-room hotel in FY13.
Flat EBIDTA and PAT margins; maintains estimates
EBIDTA and PAT margins of 39.2% and 18.7% for Q4FY11, respectively, declined
flat-to-marginally Y-o-Y. FY11 EBIDTA of 37.2% and PAT margin of 16.7% were
down 40bps Y-o-Y and up 80bps, respectively. We maintain our FY12 and FY13
estimates of 5% ARR increase, along with marginal improvement in occupancy
rates. We believe with the opening of car parking facility at Krishna, Hyderabad,
proportion of F&B in the overall sales will increase to more than 50% in FY12.
Begumpet and Krishna expansion on track
Capex of INR 900 mn at Begumpet, with 190 rooms, is on track and is expected
to be commissioned by Q2FY12. Along with this, the INR 200 mn car parking
facility expansion at Taj Krishna is also running on track for Q2FY12 opening. The
new car parking facility will help the company tap this fast emerging banqueting
opportunity. Ginger, Hyderabad with an expected capex of INR 450 mn is
expected to become operational by the end of FY13.
Outlook and valuations: Attractive; maintain ‘BUY’
Taj GVK is strengthening its leadership in the CBD area of Hyderabad by adding
new facilities. At CMP of INR 105, the stock is currently trading at EV/EBIDTA of
6.7x and 5.3x FY12E and FY13E, respectively. On a replacement cost basis, the
company is trading at INR 7 mn FY12E, one of the cheapest in the entire industry.
We continue to value the company at 10x (30% discount to its peers) FY12
EV/EBIDTA and maintain our target price of INR 165. We maintain our ‘BUY’
recommendation on the stock. Limited supply in key markets in future
Taj GVK Hotels & Resorts (Taj GVK) reported INR 691 mn sales, up 9.8% Y-o-Y,
but down 1.5% Q-o-Q. It posted ORs of 64-79% for its hotels in Hyderabad
against 75% in Chennai and 74% in Chandigarh. ARRs grew flat-to-marginally,
both Q-o-Q and Y-o-Y. The company sounded cautious on any big jump in ARRs
and mentioned that 5% rise is certain; beyond that it is difficult to comment. No
major supply is expected in Hyderabad in the next 1-2 years. In Chennai, supply
is coming in at INR 10,000 plus range, where as Taj GVK works at sub INR 5,500.
In Chandigarh, JW Marriott is coming up with a 300-room hotel in FY13.
Flat EBIDTA and PAT margins; maintains estimates
EBIDTA and PAT margins of 39.2% and 18.7% for Q4FY11, respectively, declined
flat-to-marginally Y-o-Y. FY11 EBIDTA of 37.2% and PAT margin of 16.7% were
down 40bps Y-o-Y and up 80bps, respectively. We maintain our FY12 and FY13
estimates of 5% ARR increase, along with marginal improvement in occupancy
rates. We believe with the opening of car parking facility at Krishna, Hyderabad,
proportion of F&B in the overall sales will increase to more than 50% in FY12.
Begumpet and Krishna expansion on track
Capex of INR 900 mn at Begumpet, with 190 rooms, is on track and is expected
to be commissioned by Q2FY12. Along with this, the INR 200 mn car parking
facility expansion at Taj Krishna is also running on track for Q2FY12 opening. The
new car parking facility will help the company tap this fast emerging banqueting
opportunity. Ginger, Hyderabad with an expected capex of INR 450 mn is
expected to become operational by the end of FY13.
Outlook and valuations: Attractive; maintain ‘BUY’
Taj GVK is strengthening its leadership in the CBD area of Hyderabad by adding
new facilities. At CMP of INR 105, the stock is currently trading at EV/EBIDTA of
6.7x and 5.3x FY12E and FY13E, respectively. On a replacement cost basis, the
company is trading at INR 7 mn FY12E, one of the cheapest in the entire industry.
We continue to value the company at 10x (30% discount to its peers) FY12
EV/EBIDTA and maintain our target price of INR 165. We maintain our ‘BUY’
recommendation on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Limited supply in key markets in future
Taj GVK Hotels & Resorts (Taj GVK) reported INR 691 mn sales, up 9.8% Y-o-Y,
but down 1.5% Q-o-Q. It posted ORs of 64-79% for its hotels in Hyderabad
against 75% in Chennai and 74% in Chandigarh. ARRs grew flat-to-marginally,
both Q-o-Q and Y-o-Y. The company sounded cautious on any big jump in ARRs
and mentioned that 5% rise is certain; beyond that it is difficult to comment. No
major supply is expected in Hyderabad in the next 1-2 years. In Chennai, supply
is coming in at INR 10,000 plus range, where as Taj GVK works at sub INR 5,500.
In Chandigarh, JW Marriott is coming up with a 300-room hotel in FY13.
Flat EBIDTA and PAT margins; maintains estimates
EBIDTA and PAT margins of 39.2% and 18.7% for Q4FY11, respectively, declined
flat-to-marginally Y-o-Y. FY11 EBIDTA of 37.2% and PAT margin of 16.7% were
down 40bps Y-o-Y and up 80bps, respectively. We maintain our FY12 and FY13
estimates of 5% ARR increase, along with marginal improvement in occupancy
rates. We believe with the opening of car parking facility at Krishna, Hyderabad,
proportion of F&B in the overall sales will increase to more than 50% in FY12.
Begumpet and Krishna expansion on track
Capex of INR 900 mn at Begumpet, with 190 rooms, is on track and is expected
to be commissioned by Q2FY12. Along with this, the INR 200 mn car parking
facility expansion at Taj Krishna is also running on track for Q2FY12 opening. The
new car parking facility will help the company tap this fast emerging banqueting
opportunity. Ginger, Hyderabad with an expected capex of INR 450 mn is
expected to become operational by the end of FY13.
Outlook and valuations: Attractive; maintain ‘BUY’
Taj GVK is strengthening its leadership in the CBD area of Hyderabad by adding
new facilities. At CMP of INR 105, the stock is currently trading at EV/EBIDTA of
6.7x and 5.3x FY12E and FY13E, respectively. On a replacement cost basis, the
company is trading at INR 7 mn FY12E, one of the cheapest in the entire industry.
We continue to value the company at 10x (30% discount to its peers) FY12
EV/EBIDTA and maintain our target price of INR 165. We maintain our ‘BUY’
recommendation on the stock. Limited supply in key markets in future
Taj GVK Hotels & Resorts (Taj GVK) reported INR 691 mn sales, up 9.8% Y-o-Y,
but down 1.5% Q-o-Q. It posted ORs of 64-79% for its hotels in Hyderabad
against 75% in Chennai and 74% in Chandigarh. ARRs grew flat-to-marginally,
both Q-o-Q and Y-o-Y. The company sounded cautious on any big jump in ARRs
and mentioned that 5% rise is certain; beyond that it is difficult to comment. No
major supply is expected in Hyderabad in the next 1-2 years. In Chennai, supply
is coming in at INR 10,000 plus range, where as Taj GVK works at sub INR 5,500.
In Chandigarh, JW Marriott is coming up with a 300-room hotel in FY13.
Flat EBIDTA and PAT margins; maintains estimates
EBIDTA and PAT margins of 39.2% and 18.7% for Q4FY11, respectively, declined
flat-to-marginally Y-o-Y. FY11 EBIDTA of 37.2% and PAT margin of 16.7% were
down 40bps Y-o-Y and up 80bps, respectively. We maintain our FY12 and FY13
estimates of 5% ARR increase, along with marginal improvement in occupancy
rates. We believe with the opening of car parking facility at Krishna, Hyderabad,
proportion of F&B in the overall sales will increase to more than 50% in FY12.
Begumpet and Krishna expansion on track
Capex of INR 900 mn at Begumpet, with 190 rooms, is on track and is expected
to be commissioned by Q2FY12. Along with this, the INR 200 mn car parking
facility expansion at Taj Krishna is also running on track for Q2FY12 opening. The
new car parking facility will help the company tap this fast emerging banqueting
opportunity. Ginger, Hyderabad with an expected capex of INR 450 mn is
expected to become operational by the end of FY13.
Outlook and valuations: Attractive; maintain ‘BUY’
Taj GVK is strengthening its leadership in the CBD area of Hyderabad by adding
new facilities. At CMP of INR 105, the stock is currently trading at EV/EBIDTA of
6.7x and 5.3x FY12E and FY13E, respectively. On a replacement cost basis, the
company is trading at INR 7 mn FY12E, one of the cheapest in the entire industry.
We continue to value the company at 10x (30% discount to its peers) FY12
EV/EBIDTA and maintain our target price of INR 165. We maintain our ‘BUY’
recommendation on the stock.
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