Indian Hotels Company – Results lower than estimates - Maintain Buy Rating - Way2Wealth

Results lower than estimates: Subdued performance in the consolidated accounts led by delay in opening of The Pierre and high interest cost of the Samsara property and quiet performance of the U.S hotels led to lower than expected results for FY10.

Going forward, we expect ARRs to see improvement in the third and fourth quarter of FY11. With The Pierre now fully operational, the focus of the management is to make the U.S property cash neutral.

Due the subdued performance, we lower our estimates for FY11 and forecast an EPS of Rs 2.5. At the CMP of Rs 97, the stock quotes at P/E of 38.8x its FY11 earnings. We however continue to remain positive on the prospects of the hotel sector and IHCL in particular. We maintain our BUY rating on the stock.

Source : Equity Bulls

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