Buy Ventive Hospitality Ltd for the Target Rs 750 by Motilal Oswal Financial Services Ltd
International headwinds outstrip resilient India performance
* Ventive Hospitality (VENTIVE) reported an EBITDA decline of 7% YoY to INR1.9b in 1QFY27. This decline was primarily due to a 32% YoY dip in the international business EBITDA, which was partially offset by a 16% growth in the Indian hospitality business. The annuity business remained flat in 1Q.
* The India hospitality business is expected to be driven by sustained MICE, Global Capability Center (GCC)-led office expansions, and limited new luxury hotel supply in Pune. Further, captive solar investments are expected to support margin expansion through lower energy costs.
* The Maldives business is likely to witness a recovery as the one-off impact of elevated diesel prices subsides (adj. EBITDA would have grown 10% without fuel impact), supported by resilient international leisure demand and global connectivity. The company's ongoing transition towards renewable energy, including increased solar adoption across its resorts and Raaya's target of ~80% solar utilization (by Apr’27), is expected to reduce fuel cost volatility and promote sustainable profitability of its international portfolio.
* Factoring in the expected recovery in international business in 2HFY27, we largely maintain our FY27 EBITDA estimates (cut by 2%). We cut our FY28 EBITDA estimates by 7% due to a delay in the commencement of operations at the 73-key Ritz-Carlton Reserve, Pottuvil (Sri Lanka). We reiterate our BUY rating with a TP of INR750 (based on FY28E SoTP).
India strength offsets international weakness
* VENTIVE’s consolidated revenue grew 7% YoY to INR5.4b (in line). This was led by a 13%/5% YoY growth in the India/International Hospitality businesses to INR2b/INR2.1b. The annuity business revenue grew 3% to INR1.3b.
* India business ARR grew 8% to INR12,183, with occupancy increasing 7pp to 67%. International business TrevPAR grew 5% to INR46,410, with occupancy contracting 2pp to 52%.
* VENTIVE’s EBITDA declined 7% YoY to INR1.9b (est. INR2.2b). EBITDA margin contracted 540bp YoY to 35.6% (est. 40.7%), led by higher other expenses (up 400bp), employee expenses (up 120bp) and RM expenses (up 20bp).
* The Indian business EBITDA grew 16% YoY to INR737m, while the International business EBITDA declined 32% to INR324m. Annuity business EBITDA stayed flat at INR1,112m.
* The company remeasured its deferred tax assets and liabilities and has recognized a net deferred tax credit of INR1,022m.
* Consequently, adj. PAT jumped 3x to INR807m (est. INR487m). ? Gross debt stood at INR20.9b vs. INR19.9b as of Mar’26. Cash stood at INR5.8b vs. INR5.2b as of Mar’26
Valuation and view
* VENTIVE’s growth is expected to be driven by rapid multi-city expansion, infrastructure-led demand, limited supply conditions in key markets such as Pune, and diversification into membership-led hospitality through Soho House. Additionally, high-ADR Maldives assets and a strong pipeline of 1700+ keys across eight hotels bolster the growth outlook.
* Based on pro forma financials, we model a CAGR of 15%/13%/17% in revenue/ EBITDA/adj. PAT over FY26-28E. We largely retain our FY27 EBITDA estimates (cut by 2%), while we reduce our FY28 EBITDA estimates by 7%. We reiterate our BUY rating with a TP of INR750 (based on FY28E SOTP)
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