Enters leisure segment via an asset light route
SAMHI IN to buy 70% stake in RARE India, a luxury hospitality platform with a portfolio of 67 hotels comprising 990 rooms, for Rs474mn.
We increase our EBITDA estimates by ~4% over the next 2 years as investment in RARE India (RARE), a luxury hospitality platform, is likely to open a new revenue stream and result in B2C commission income of Rs425mn/Rs556mn for FY27E/FY28E. We believe RARE provides SAMHI IN an exposure to leisure segment through an asset light route diversifying the business model and lending scale advantage. Affiliation with Marriott will not only aid in boosting occupancy (~35-45%) and ARR (Rs25,000 odd) of existing properties but also help garner listings on the platform by onboarding new owners given strong parentage. After incorporating the acquisition of RARE, we expect revenue/EBITDA CAGR of 15%/23% over FY26E-FY28E. We maintain BUY on the stock with a TP of Rs264 (10.5x FY28E EBITDA; earlier 12x).
