ICICI Securities Assigns Buy Rating to Brigade Hotel Ventures, Target Price of Rs 96

Brigade Hotel Ventures Sees Stable Growth Amidst Geopolitical Challenges

Brigade Hotel Ventures (BHVL) has reported a stable 6% RevPAR growth in Q4FY26, indicating a resilient performance by the hospitality sector. However, a 4% year-over-year decline in F&B revenue has limited total revenue growth to 2% YoY. The company's EBITDA margin was impacted by GST 2.0, leading to a 1.6% decline in EBITDA margin and a 4% YoY EBITDA decline.

Despite the challenges posed by geopolitical factors, which continue to weigh on foreign travel, BHVL's domestic guest share of over 70% could provide a cushion against the impact. The company has ambitious expansion plans, with the intention to develop nine new hotels with 1,700 keys across South India, requiring an estimated capital expenditure of approximately INR 36 billion over FY25-30.

Key Risks and Opportunities

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Our research team has identified key risks, including a potential fall in occupancies and delays in the execution of the company's expansion plans. Nevertheless, we maintain a BUY rating on BHVL, with a revised target price of INR 96, based on 16x Sep'27E EBITDA. This adjustment reflects a 6% cut to FY27/28E EBITDA due to geopolitical headwinds and a 6-12 month shift in capex timelines, resulting in lower net debt.

We have revised our target price and recommendations to reflect the current market conditions and the company's growth prospects. Our outlook for BHVL remains positive, with a focus on its domestic guest share and ambitious expansion plans.