ITC Hotels Limited; Recent business activities and demerger from ITC Limited and today's listed price of ₹188;

ITC Hotels Limited; Recent business activities and demerger from ITC Limited and today's listed price of ₹188; 

📈 Current Market Price Analysis:

The current listed price of ITC Hotels at ₹188 

💰 Financial Performance:

From the financial summary provided:

• H1 FY25 Revenue: ₹1,457 crores with an EBITDA of ₹413 crores. 📊

• FY24 Revenue: ₹3,003 crores with an EBITDA of ₹1,004 crores. 📈

• Growth and Profitability: The EBITDA margin for H1 FY25 stands at approximately 28.3%, indicating strong profitability compared to many hospitality firms. 💸

🏨 Business Operations:

• Demerger Update: The demerger became effective as of January 1, 2025, with ITC Hotels listing on the stock exchange on January 29, 2025. 📅

• Asset Details: Post-demerger, ITC Hotels has embarked on expanding its hotel portfolio, focusing on capital-efficient growth through managed hotels. 🏗️

• Growth Strategy: Plans to increase the managed portfolio to 2/3rd of total hotels, enhancing capital productivity and operational efficiency. 📊

🔍 Valuation Context:

• Post-Demerger Asset Allocation: Based on the demerger details, for every 10 shares of ITC, shareholders received 1 share of ITC Hotels. If the total cost before the demerger was ₹4,00,000 for 1,000 ITC shares, then post-demerger, 1,000 shares of ITC would be valued at ₹3,45,960, and 100 shares of ITC Hotels at ₹54,040. 🔄

• Share Price Justification: Given the strong EBITDA margins and aggressive expansion plans, the current share price of ₹188 could be seen as an entry point reflecting the growth potential, especially considering the substantial revenue contributions expected from new and renovated properties. But proper valuations will be calibrated post announcement of their 1st results independently. 💲

🚀 Near-Term and Long-Term Outlook:

• Near-Term: The initial phases post-listing might experience volatility as the market assimilates the new stock and evaluates its performance separate from ITC. The focus on increasing room inventory and strategic land bank utilization should drive short-term growth. ⚡

• Long-Term: With a robust pipeline of 46 hotels and approximately 4300 keys, coupled with a strategic shift towards more managed hotels, ITC Hotels is well-positioned for sustainable growth. The brand equity from iconic properties and high-margin offerings like luxury dining and signature experiences provide a strong foundation for long-term revenue and profitability growth. 🌟

In conclusion, the listing price of ₹188 for ITC Hotels reflects its solid fundamentals and future growth prospects. Investors should monitor upcoming results with the company's execution of its expansion strategy and operational efficiencies to gauge long-term value accurately. 📊🚀