Management said they are targeting 3.5x Net debt/EBITDA by the end of FY25 and the Interest cost for FY25 will be 200cr as the interest rate is 9.8%, hence the net debt is 2000cr. Current cash balance is 260cr, assume the cash balance is same next year as well and the generate cash flow is being used to bring down the debt.
Net debt at the end of FY25 = 2000-260 = 1740cr
EBITDA = 1740/3.5 =497cr
Considering valauation of 21x EV/EBITDA: EV= 10440cr
Market cap = EV-debt = 10440-2000 = 8440cr
upside of 2x
Note: Samhi hotel is trading at the lowest valuation in its peer group. With improved balance sheet the valuation perhaps either remains same (21x) or increases, and less likely to decrease.
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