Buy JUNIPER Ltd for the Target Rs.240 by Choice Institutional Equities
Expected Expansion of 925 Keys to Propel Growth
Despite the disruption due to West Asia conflict, JUNIPER posted a resilient performance in Q4FY26. High domestic traveller mix (~70–75%) stove off the impact on occupancy (flat YoY). However, portfolio RevPAR improved by 7.9% YoY in Q4FY26. EBITDA margin, supported by operating leverage, improved efficiency and lower energy costs, expanded 195 bps YoY to 44.0%. JUNIPER has planned four hotels in Bengaluru, Delhi, Guwahati and Kaziranga. Near-term growth is expected to be led by the opening of Westin Bengaluru Phase-1 (238 keys) in Q2FY27E. In Phase-2, the hotel will further expand by 504 keys (expected FY29E). A 500-key “big-box” luxury asset at Yashobhoomi, Delhi, slated for launch by FY30E, will be supported by demand from the convention centre.
View and Valuation
We revise our FY27E revenue and EBITDA estimates downward by 5.6% and 6.2%, respectively, factoring in the delay in execution of Bengaluru Phase-1. However, our FY28E revenue and EBITDA estimates remain broadly in line with earlier expectations, supported by resilient operations and structural demand tailwinds. We value JUNIPER at 11.0x FY28E EV/Adj. EBITDA, arriving at a revised TP of INR 240 (vs INR 250 earlier). Our DCF-derived valuation of INR 240 per share provides a sanity check. We, therefore, maintain our ‘BUY’ rating on the stock, given an upside of 20.0%.
Key Risk to our Valuation
Delay in project execution due to shortage of labour, slower-than-expected approvals and cost overruns will adversely impact the growth forecast. Possibility of extended geopolitical conflict will affect travel demand.
Resilient Operations, Stable Occupancy
* Operating performance remained resilient, with occupancy at 81% (flat YoY), ARR grew 8% YoY to INR 13,547, resulting in RevPAR of INR 10,863 (+8% YoY)
* Revenue grew by 8.6% YoY to INR 3.0 Bn ? EBITDA margin came in at 44.0% (+195 bps YoY), leading to an EBITDA of INR 1.3 Bn (+13.7% YoY), driven by savings in energy cost
* PAT (excluding exceptional items) rose by 34.2% YoY to ~INR 0.7 Bn, driven by lower finance cost and taxes. Reported PAT declined by 8.3% YoY impacted by one-time exceptional item relating to property taxes for prior years. Strong Cashflows Support Expansion Plans amid Elevated CapEx JUNIPER is targeting an expansion of its portfolio by 1,425 keys, implying a 15% CAGR over FY26–FY30E. Additionally, JUNIPER is evaluating an ~80,000 sq. ft. commercial development adjacent to its owned asset Grand Hyatt Mumbai. JUNIPER is likely to generate a cumulative cashflow of INR 16.2 Bn from operations over FY27E–FY29E. This cashflow will be adequate to cover the expected capex of INR 16.4 Bn. We believe this will be a positive for the company, lowering interest cost, propelling earnings growth.
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SEBI Registration no.: INZ 000160131
