Brokerage Firm Prabhudas Lilladher Recommends Buy in Samhi Hotels with a Target Price of Rs 230

Prabhudas Lilladher Cuts EPS Estimates for Samhi Hotels

Prabhudas Lilladher's research report on Samhi Hotels has revised its earnings per share (EPS) estimates downward by approximately 22% for the fiscal years 2027 and 2028, following a fine-tuning of its debt and interest expense forecast. This revision is attributed to the company's capex commitment of INR 22,000 million over the next five years.

Despite the challenges posed by the Middle East conflict and GST transition, as well as certain one-off expenses, Samhi Hotels' operational performance remained largely in line with Prabhudas Lilladher's estimates. The company's earnings before interest, tax, depreciation, and amortization (EBITDA) margin stood at 38.4%, which is higher than the predicted 37.3% by Prabhudas Lilladher.

Key drivers of Samhi Hotels' growth include the addition of 192 keys, resulting in same-store revenue per available room (RevPAR) growth of approximately 9-11%. The company has also benefited from the accrual of business-to-consumer (B2C) income following the acquisition of RARE India. As a result, Prabhudas Lilladher expects revenue compound annual growth rate (CAGR) of 17% over the next two years, with EBITDA margins of 38.1% and 39.6% for the fiscal years 2027 and 2028, respectively.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Valuation and Recommendation

Samhi Hotels trades at an attractive valuation of 10.0x and 7.8x its fiscal year 2027 and 2028 EBITDA estimates, respectively, after adjusting for the minority interest factor in the joint venture (JV) platform formed with GIC. Prabhudas Lilladher maintains a BUY rating on the stock with a target price of Rs 230, which is based on a target multiple of 10.5x fiscal year 2028 EBITDA. The target multiple remains unchanged.