Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

RiskRisk RewardReward– Indian-HotelsIndianCompanyHotelsLtd (IHTL.NS)Company Ltd (IHTL.NS)

Set for a Strong Year

PRICE TARGET Rs793.00 EQUAL-WEIGHT THESIS

Core business valuation : EV/EBITDA basis and set base case multiple at 50% premium to ▪Taj is one of India's strongest brands and

Sensex. Methodology remains unchanged but we roll forward price target from Dec27 key for IHCL. Though over the years the

EV/EBITDA to March28 and apply 27x vs 28.5x earlier, multiple change is driven by company has expanded to a portfolio of

underlying change in Sensex EV/EBITDA. We continue to add the value of listed associate, brands across luxury, upper scale,

Oriental Hotels based on their current market cap. experiential and midscale.

Base case scenario value is our price target ▪We expect demand-supply dynamics to

remain favorable and the company to deliver Rs827.28

16% topline growth in F27.

Consensus Price Target Distribution Rs699.00 Rs960.00 of capital-light business (i.e., MS PT ▪Share

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates management contracts, Ama, Chambers, and

Qmin) should rise, providing a margin

tailwind given the high flow-through.

▪For F26, the business delivered 17% ROCE

RISK REWARD CHART and had gross cash of Rs43bn.

▪Stock trades at F27 EV/EBITDA of 25.4x,

Rs1,173.00Rs1,173.00(+61.25%)Rs1,173.00(+61.25%)(+61.25%) which we believe adequately captures the INR

risk reward.

1000 Consensus Rating Distribution

Rs793.00Rs793.00(+9.01%)Rs793.00(+9.01%)(+9.01%) 80% Overweight

750 Rs727.45Rs727.45Rs727.45 20% Equal-weight

0% Underweight

500 MS Rating

Rs565.00Rs565.00(-22.33%)Rs565.00(-22.33%)(-22.33%)

Source: Refinitiv, Morgan Stanley Research

Risk Reward Themes

Pricing Power: Positive