ITC Hotels shares up 6% on Q2 beat; targets suggest up to 44% further upside

ITC Hotels, similar to its industry peers, reported better-than-expected Q2 results. Analysts noted that RevPAR (Revenue Per Available Room) came in better than expected, driven by 520 basis points (bps) expansion in occupancy (76 per cent) and Average Daily Rate (ADR) growth of 13 per cent to Rs 12,800.

Room revenue growth was supported by healthy transient demand across key markets and buoyancy in MICE business, driven by BRICS event in Delhi, Elara Securities said as it noted hat F&B business and management fees were up 12 per cent and 25 per cent, respectively, reflecting broad-based growth.

"The outlook for the next 18 months is upbeat, driven by strong in-season demand in H2FY27 and expected heightened MICE activity in FY28. Maintain Buy with a higher SoTP-TP of Rs 230," it said.

JM Financial said ITC Hotels' asset-light strategy has continued to enhance return profile with H1FY27 RoCE approaching 20 per cent. It revised upward its FY27 and FY28 Ebitda estimates by 3-4 per cent and expects revenue and Ebitda for ITC Hotels to grow at 11 per cent and 14 per cent CAGR over FY26–29E. This brokerge upped its target on the stock to Rs 235 from Rs 225.

Jefferies, which suggested a target of Rs 220, said  ITC Hotels is on track to surpass 23,000 keys by 2031, implying a 10 per cent key CAGR, with owned inventory growing 3-4 per cent CAGR.

"Recent additions include the 72-key ITC Kumarakom (Zuri) acquisition and 130-key Welcomhotel Ahmedabad conversion. Puri and Bhubaneswar projects are targeted by end-3QFY28. The Delhi Yashobhoomi project is set to commission by FY30/31. The company also secured a 2.8-acre Lucknow parcel for a 200+ key luxury hotel and entered Dubai through a wholly owned subsidiary, its second overseas market after Sri Lanka," it said.

ICICI Securities suggested a target of Rs 235 as it estimated a 9 per cent RevPAR CAGR with a management fees CAGR of 16 per cent, over FY26– 29, led by new hotel openings.