This Tata Group stock is the largest hospitality company in South Asia, offering a combination of Indian hospitality and world-class service through various brands, is in focus after ICICI Securities gave an upside potential of 25.37 percent from the current price of Rs. 737.10.
Stock Price Movement:
In Wednesday’s trading session, Indian Hotels Company Limited‘s share reached an intraday low of Rs. 737.10 per equity share, plunged by 1.46 percent from its previous day’s close price of Rs. 747.45. The stock is currently trading at Rs. 737.10.
The market capitalization now stands at approximately Rs. 1,05,618.67 crore. Over the past year, the company has achieved a return of 39.64 percent and is currently trading at a 17.39 percent discount from its 52-week high of Rs. 894.15 per share.
What is the news?
ICICI Securities has revised Indian Hotels Company Limited to a “Buy” rating, setting a target price of Rs. 924, reflecting a 25.37 percent upside from the current price of Rs. 737.10. It revised its target price from Rs. 846 to Rs. 924, upgrading the stock from “Hold” to “Buy.”
Target Rational:
Indian Hotels Company Limited is set for strong growth with its ‘Accelerate 2030’ strategy, aiming to double its hotels to more than 700 by FY30 and achieve a 14 percent revenue CAGR over FY24-FY30.
The company plans significant capex investment, using 20–25 percent of its annual EBITDA for renovations, new projects, digital upgrades, and constructing the much-anticipated Sea Rock Hotel in CY25. With a projected FY27 EV/EBITDA multiple of 33x, IHCL is well-positioned to outpace industry growth.
New Business Initiatives:
The company is aggressively expanding its new business segments, which saw 40 percent revenue growth. Qmin now has more than 60 outlets and has launched at Chennai and Kolkata airports with TFS. ama Stays & Trails expanded to 250 bungalows, with 119 operational. These initiatives strengthen IHCL’s diversified revenue streams and premium hospitality offerings.
Expansion and Growth:
The company is expanding rapidly, signing 20 hotels and opening 8 in Q3, with a total of 55 signings and 20 openings from April to December 2024.
The company now has 360 hotels and a strong pipeline of 123 more. Its capital-light strategy is paying off, with management fees rising 32 percent YoY to Rs. 177 crores, driven by hotel room growth and new revenue sources like brand and technical fees.
Recent quarter results:
Indian Hotels Company Limited’s revenue has increased from Rs. 1,964 crore in Q3 FY24 to Rs. 2,533 crore in Q3 FY25, which has grown by 28.97 percent. The net profit has also grown by 32.70 percent from Rs. 477 crore in Q3 FY24 to Rs. 633 crore in Q3 FY25.
Indian Hotels Company Limited’s revenue and net profit have grown at a CAGR of 8.49 percent and 35.06 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 15.1 percent and 14.3 percent, respectively. The debt-to-equity ratio of the company is to be 0.29x, which shows the company is almost debt-free. Indian Hotels Company Limited’s EPS is to be Rs. 12.7.
Written By – Nikhil Naik
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