ROHLTD

: Underperformance Offers Entry Point in Strong Sector Cycle

Despite operational disruptions at IndiGo in December 2025, the hotel industry remained resilient, with

emerging as a tactical pick. The company’s new Iconiqa Mumbai property is contributing positively from its first full quarter, while a robust pipeline and brand diversification underpin medium-term growth. With the sector supported by favorable demand-supply dynamics and ROHL’s stock underperforming peers, current valuations offer an attractive entry point. IndiGo cancelled 5,000+ flights in early December due to FDTL norms. Hotels saw minimal impact, offset by extended stays and alternate travel routes. Operations normalized mid-December after government exemption. Q3 is seasonally strong, driven by weddings and leisure travel. ROHL’s Iconiqa Mumbai, near the airport, opened in Q3FY26 and is expected to break even within the quarter, alleviating concerns of profitability drag. Management expects double-digit growth in Q3, with Iconiqa accretive in the long run. ROHL plans to triple inventory to 22,000 keys by 2030, with 2,500 keys in the near term. Expansion will be driven by revenue-share/lease models to accelerate growth. A new brand architecture with five sub-brands targets diverse consumer segments, positioning ROHL for industry-leading growth. The hotel sector is in a sustained up-cycle, supported by rising travel preference, improved infrastructure, and new demand themes like spiritual tourism. Demand CAGR is expected in double digits, while supply growth lags due to execution delays, ensuring favorable pricing power. ROHL’s stock has corrected ~25% in three months, underperforming the Nifty 50 (+4%). At 11.6x FY27e EV/EBITDA, valuations are among the lowest in the sector. With strong fundamentals, expansion plans, and industry tailwinds, ROHL’s CMP of ₹406 offers a compelling entry point for investors.