Add Ventive Ltd for the Target Rs. 790 by Choice Institutional Equities
Upcoming Soft Season to Reduce the Impact of West Asia Conflict
Hotels in Maldives have a natural seasonal hedge owing to Q1 pivot from European to East Asian and Russian visitors. These corridors have not been affected by flight cancellations in the Middle East. However, as transportation in the Maldives runs almost entirely on diesel, an extended conflict could put significant pressure on VENTIVE’s operating cost and margin. In the medium term, improving direct connectivity to the Maldives via the new Terminal at the Velana International Airport is expected to provide enhanced tourism facilities along with a higher number of inbound flights broadening the feeder market.
View and Valuation
We revise our revenue guidance for FY27E and FY28E downwards by 8.6% and 1.1%, respectively, on the back of some demand softness in FY27E and marking down 200 rooms from the cancelled Mundra port hotel. Consequently, we also revise our EBITDA estimate lower by 14.2% and 1.0%, respectively, for FY27E and FY28E. We value the company using the SOTP approach on FY28E Adj. EBITDA, applying 16.0x for hospitality and 14.0x for annuity business (14.3x blended). We, therefore, assign an “ADD” rating to the stock.
Key Risk to Our Valuation
Higher than expected inflation can erode margin further, capital cost inflation may cause cost overruns. Execution delays might postpone revenue recognition.
Pricing-led Outperformance, 163-key Inorganic Expansion
* RevPAR grew 10% YoY to INR 14,587, driven by ARR growth of 11%, while occupancy remained largely stable (-0.5 pp YoY), highlighting a pricing-led growth strategy
* Revenue increased (+18.4% YoY vs Proforma) to INR 24.6 Bn, in line with CIE estimates of INR 25.1 Bn, supported by steady demand and strong ARRs
* EBITDA grew to INR 10.9 Bn (+17.4% YoY vs Proforma, in-line with CIE est.); however, margins contracted 40 bps YoY to 44.7%
* PAT came in at INR 5.0 Bn with net profit margin at 20.4% buoyed by lower interest cost and normalisation of tax rates
Strong Show in Q4FY26, Medium-term Tailwinds Intact
TRevPAR jumped 18% in Q4FY26, reflecting resilient luxury demand. India portfolio ARR rose 12%, driving a RevPAR growth to 8%, despite occupancy being affected by geopolitical travel softness and Aloft Whitefield’s temporary shutdown. In the medium term, tailwinds remain strong: ~40 million sq ft of office space absorption is projected over the next five years, while Japan and Korea linked auto manufacturing continues to broaden Pune's demand base, underpinning our expectation of occupancy ramping toward 75%. Notably, no meaningful luxury supply is expected in either Pune or Maldives over the next four to five years, keeping VENTIVE’s pricing power firmly intact
For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131
