ITC Hotels: ITC Hotels Ltd. continues to attract positive attention from brokerages after delivering a resilient performance in the first quarter of FY27. Despite geopolitical challenges affecting travel demand during April 2026, ICICI Securities has reiterated its ‘Buy’ recommendation on ITC Hotels stock and increased its target price to ₹235 from ₹229.
The brokerage remains optimistic about the company’s long-term growth prospects, supported by strong hotel demand, expanding management contracts, and new hotel launches.
📈 Q1 FY27 Highlights
ITC Hotels reported a solid operational performance during the June quarter.
Key Numbers
✅ Hotel Revenue: Up 10% YoY
✅ Hotel EBITDA: Increased 13% YoY
✅ Strong operating margins despite temporary geopolitical disruptions.
Although April witnessed some softness due to geopolitical developments, demand gradually recovered during the quarter, helping the company deliver healthy earnings growth.
🚀 Demand Recovery Expected in H2 FY27
Management believes the second quarter of FY27 will continue the recovery trend, while the biggest improvement is expected during the second half of FY27.
Several factors are likely to support growth:
- ✈️ Rising domestic travel demand
- 🌍 Recovery in international tourism
- 💼 Higher corporate travel
- 🎉 Strong wedding and event bookings
- 🏨 New hotel openings across India
These drivers are expected to improve occupancy levels and room rates in the coming quarters.
📊 Strong Growth Outlook Through FY29
ICICI Securities expects ITC Hotels to deliver healthy growth over the next three years.
Brokerage Estimates (FY26–FY29E)
📌 RevPAR CAGR: 9%
📌 Management Fee CAGR: 16%
📌 Consolidated Revenue CAGR: 11%
📌 EBITDA CAGR: 14%
The brokerage believes expansion through new hotel launches and an asset-light management model will continue to strengthen profitability.
💰 Why ICICI Securities Raised the Target Price
ICICI Securities has raised its target price to ₹235 per share from ₹229.
The revised valuation is based on:
- 📈 25x Mar’28 EV/EBITDA multiple
- 💵 Estimated net cash of ₹12.1 billion
- 🏨 Value of the Dwarka hotel lease premium
- 🌴 Net Asset Value (NAV) of the Sri Lanka residential project worth ₹9.1 billion
Based on these assumptions, the brokerage values ITC Hotels at an equity value of approximately ₹489 billion, translating into a target price of ₹235 per share.
⚠️ Key Risks Investors Should Watch
While the long-term outlook remains positive, investors should keep an eye on the following risks:
- ⚠️ Slower-than-expected hotel occupancy growth
- ⚠️ Weak Average Room Rates (ARRs)
- ⚠️ Delays in upcoming hotel projects
- ⚠️ Any prolonged slowdown in travel demand
These factors could impact earnings growth over the coming years.
📌 ITC Hotels Stock Outlook
ICICI Securities continues to remain bullish on ITC Hotels, citing strong fundamentals, healthy revenue visibility, robust expansion plans, and improving travel demand.
With new hotel additions and rising management fee income expected to drive profitability, the brokerage believes the stock has further upside potential and has maintained its ‘Buy’ rating with a revised target price of ₹235.
Long-term investors looking for exposure to India’s growing hospitality sector may keep ITC Hotels on their watchlist while monitoring quarterly performance and industry trends.
Disclaimer
The views, recommendations, and target prices mentioned above are those of ICICI Securities and do not represent the views of this website. Investors should consult a SEBI-registered financial advisor before making any investment decisions. Stock market investments are subject to market risks. Please read all related documents carefully before investing.