Target: ₹209
CMP: ₹156.40
Apeejay Surrendra Park Hotels (ASPHL) currently operates diversified business model with 36 hotels totaling 2,495 keys in Q3FY25 with 44 per cent owned, 44 per cent managed and 11 per cent leased and over next five years the total number of keys are expected to double by 5,048 keys.
The capex guidance by the management for Q4FY25 is approximately ₹30 crore and for FY26 is expected to be around ₹150-160 crore which would be supported by internal accruals.
India’s hospitality sector is set for strong growth over the next decade, driven by segments like spiritual and wildlife tourism. ASPHL with over 50 per cent hotel expansion planned in next four years is well positioned to meet this rising demand. The company’s focus on growing its F&B segment, particularly Flurys, along with superior operating metrics and high occupancy rates (91-94 per cent), gives it an edge over industry peers.
Flurys plans to develop a commissary in Delhi-NCR region with about 20,000 sq ft and cold storage facility that would meet the demand of whole North India from a central kitchen.
Given its almost debt free status and strong balance sheet, we recommend a Buy with a target price of ₹209 for next 9-12 months.