Target: ₹1,123
CMP: ₹895.20
Chalet Hotels’ purchase of 11 acres in South Goa for ₹140 crore comes with approvals to develop a 170-190 room 5-Star hotel. Chalet plans to build a 170-room upper upscale asset category, which is likely to be operational by December 2027.
The recent addition of Goa and Kerala assets to the pipeline provides growth visibility beyond FY27. With strong cash generation from FY25, we expect Chalet Hotels to pursue inorganic growth opportunities for assets that meet its investment matrix criteria. Strong promoter pedigree – the Raheja Group -- ensures operational expertise, management bandwidth and financial flexibility. Its tie-ups with global brands assure continued high occupancy and healthy ARR.
We expect a top-line CAGR of 14 per cent an EBITDA CAGR of 17 per cent and a PAT CAGR of 21 per cent during FY24-30. During FY24-27, we expect a top-line CAGR of 19 per cent, an EBITDA CAGR of 24 per cent and a PAT CAGR of 32 per cent.
Despite a 79 per cent run-up in the past 12 months, the stock has the potential to double in the next 3-4 years. Hence, we revise our rating to Buy from Accumulate and raise our SOTP-based TP top ₹1,123 from ₹873.