Apeejay Surrendra Park Hotels: Buy Recommendation with Target of Rs 168

Prabhudas Lilladher Lowers EBITDA Estimates for Apeejay Surrendra Park Hotels

Prabhudas Lilladher has revised its research report on Apeejay Surrendra Park Hotels, adjusting its earnings before interest, tax, depreciation, and amortization (EBITDA) estimates for the company. The research firm has lowered its EBITDA estimates by 8% for FY27E and 10% for FY28E, following a weak performance in the fourth quarter of FY26.

The company reported a modest top-line growth of 3.6% year-over-year (YoY) in 4QFY26, driven primarily by the performance of Flurys. However, the EBITDA margin declined to 28.8%, lower than the projected 35.2%. This decline was attributed to a flat hotel revenue and a 200 basis points dip in occupancy. Despite this, the research firm remains optimistic about the company's inventory addition plans, citing the recent acquisition of Zillion Hotels, Juhu, and the buy-out of Malabar House, Fort Kochi, and Purity, Lake Vembanad in December 2025.

Furthermore, the sale of apartments at EM Bypass, Kolkata, has commenced, with 29 units booked. This is expected to generate an inflow of INR 700 million in FY27E, providing a cash flow cushion to fund the company's ongoing capital expenditure projects.

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Outlook and Recommendations

The research firm expects Apeejay Surrendra Park Hotels to deliver a sales/EBITDA compound annual growth rate (CAGR) of 15% and 14% respectively over FY26-FY28E. Prabhudas Lilladher has retained its "BUY" recommendation for the company, with a sum-of-the-parts (SoTP) based target price of INR 168. This valuation is based on the hotel business being valued at 11.5x FY28E EBITDA, down from 12.5x earlier, and Flurys being valued at 1.5x FY28E sales, with no change in the target multiple.