Monday 3 November 2008

Hold Indian Hotels Company: PINC Research

PINC Research has downgraded its rating on Indian Hotels Company to hold in its October 31, 2008 research report. "Indian Hotels Co. Ltd. (IHCL) reported an 8% growth in revenues to Rs 3.7 billion in Q2FY09, driven by buoyant room revenues and stable F&B income growth. The company launched a new format of hotels i.e. ‘Gateway’, aimed at young business travellers. 16 existing properties in the company’s fold have been re-branded and repositioned in the new format, with rooms priced between Rs 3k-6k/night."

"While IHCL’s ambitious expansion plans, with a focus on the ‘Asset-Light’ model, are underway, we believe that the marked deterioration in the global economy will erode the company’s pricing power in the immediate term. Additionally, the extended gestation cycle of new projects, especially management contracts, will postpone improvement in IHCL’s operating and financial metrics. Hence, we downgrade our ‘recommendation to ‘HOLD’ and will revisit the same in the subsequent quarters," says PINC's research report.

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Source: Moneycontrol

Posted by Harsh at 07:13

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