JM is bullish about Juniper Hotels for 28% upside gain

[Pee Vee]

Juniper reported revenues of INR 2.8bn (+13% YoY; +10% QoQ), 6% higher than our estimates aided by strong occupancy of 92% at Andaz, New Delhi, along with ramp-up in Grand Hyatt, Mumbai (GHM) post refurbishment. Due to the ramp-up in GHM, the growth in operating expense was lower at 4% vs.13% growth in top line, resulting in 500bps expansion in margin YoY. Hence, EBITDA was 8% higher than JMFe at INR 1.2bn (+28% YoY; +26% QoQ). With an extremely comfortable leverage position and steady cash flows from its existing portfolio, Juniper is well positioned to embark on its next phase of growth and plans to add c. 2,000 rooms over the next 3-4 years primarily through ROFO assets, organic expansion and new acquisitions. We estimate revenue CAGR of c.14% and EBITDA CAGR of c.22% over FY25-28E, with EBITDA margin expected to reach 43% by FY28E. We maintain a BUY rating with a TP of INR 410, valuing the company at 18x Mar’27E EBITDA.

 Beat on top line due to ramp-up in key asset: Juniper reported revenues of INR 2.8bn (+13% YoY; +10% QoQ), 6% higher than our estimates aided by strong occupancy of 92% at Andaz, New Delhi, along with ramp-up in GHM post refurbishment. In 4QFY25, the company reported ARR of INR 12,470 (+12% YoY; +6% QoQ) and occupancy came in at 81% (+1pps YoY; +6pps QoQ), resulting in RevPAR of INR 10,063 (+14% YoY; +15% QoQ). Andaz and GHM recorded 19% and 10% YoY growth in ARR respectively.

 GHM drives margin recovery: Despite the key asset (GHM) being under renovation for most part of the year, the company reported a healthy top line of INR 9.4bn (+15% YoY) but EBITDA (INR 3.7bn)growth was lower at 8% YoY, reflecting the impact of shutdown and one-time refurbishment expenses. However, margin recovered sharply in 4Q to 42% (+500bps YoY) aided by ramp-up in GHM, resulting in higher flow-through to EBITDA.

 Development and pipeline update: Under the Juniper 2.0 strategy, the management is targeting to double the portfolio to 4,000 keys over the next few years. The ROFO transaction is already underway, which will add c. 737 keys across two assets and is expected to be closed in the next 8-10 months. The recently acquired 220-key asset near Bengaluru Airport will be commissioned by end-FY26 and the company will soon commence the work on Phase 2, comprising 250 keys. The Kaziranga hotel with 115 keys will become operational by FY28E under the “ALILA” brand by Hyatt. The company owns 74k sqft of land adjacent to the Secretariat in Guwahati and the management has unveiled plans to develop a 250-room luxury property at the site. Additionally, it is pursuing two new greenfield opportunities that could add c. 500 keys to the portfolio. Given the low leverage of 1.4x net debt to EBITDA, the management is confident of funding the capex without straining the balance sheet.

 Maintain BUY; Mar’26 TP of INR 410: We estimate revenue CAGR of c.14% and EBITDA CAGR of c.22% over FY25-28E, and expect EBITDA margin to reach 43% by FY28E. EBITDA growth will be driven by ramp-up in new inventory and higher ancillary revenue at GHM. We maintain BUY with a TP of INR 410, valuing Juniper at 18x Mar’27 EBITDA.