Company Overview:
Juniper Hotels Limited is the largest owner of Hyatt-affiliated hotels in India, operating 7 hotels and serviced apartments with 1,836 rooms as of 1HFY24. The Saraf Group, a prominent hotel developer in India has a long standing partnership with the Hyatt Hotels Corporation. The company owns 19.6% of the Hyatt group-affiliated hotel rooms and apartments in India, and has extensive experience in identifying opportunities for highend hotels in hospitality destinations.
Key Highlights:
1. Hotel business portfolio: The company owns seven hotels and serviced apartments in six Indian cities – Mumbai, Delhi, Ahmedabad, Lucknow, Raipur and Hampi. The hotel properties fall under three segments: luxury, upper upscale and upscale. As per the Horwath Report, the company has the largest inventory of upper-tier branded serviced apartments in Mumbai and New Delhi. The company’s significant presence in Mumbai and Delhi provides them with a strategic advantage for both international and domestic travel. The Hyatt Regency Ahmedabad and Lucknow are present in the emerging business destinations of Gujarat and Uttar Pradesh, respectively. The Hyatt Raipur benefits from the industrial growth in Chhattisgarh’s capital city while the Hyatt Place Hampi caters to tourists visiting the UNESCO World Heritage Site and business travelers visiting nearby manufacturing facilities.
2. Increasing returns by having multiple revenue streams and complementary offerings: The company introduced complementary revenue-generating streams at the hotels including serviced apartments, restaurants, MICE services and more. This ensures optimal resource utilization. During COVID-19, the occupancy at the serviced apartments remained strong while hotel occupancy decreased. These diverse offerings attract a mix of customers thus enhancing Average Room Rates. The company constantly monitors space usage and adapts to meet market demands.
3. Unique partnership between asset owner and operator brand backed by strong parentage: The Saraf Group and Hyatt have had a longstanding relationship of over 40 years, dating back to the opening of the first Hyatt hotel in India, namely, Hyatt Regency, Delhi, in 1982. This continuing relationship has led both partners to have a deep understanding and alignment on the business goals, company values and working culture, which has led to the success of the Company, driving high EBITDA margins.
Valuation: The company is valued at FY24 annualised EV/EBITDA multiple of 18.5x at the upper price band on post-issue capital. The company is planning to expand its Grand Hyatt Mumbai hotel with 293 additional rooms and 24 serviced apartments within the next three years (by FY27). This expansion will contribute to the company’s revenue growth. The MICE (Meetings, Incentives, Conferences, and Exhibitions) area of Grand Hyatt Mumbai will also be increased from 50,000 sq.ft to 100,000 sq.ft, which is expected to be operational from 1HFY25. The company’s RevPAR/ARR has increased to Rs 7,479/9,875 in FY23 from Rs 3,345/6,222 in FY22. It plans to reduce its debt substantially from IPO proceeds which will turn the business profitable. We recommend investorsto SUBSCRIBE to the issue for the long term investment horizon.
Click here to download Juniper Hotels Limited IPO Note by SBI Securities
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