Synopsis:
The hospitality major delivered steady revenue growth despite profit pressure. Strong network expansion and rising foreign tourist demand support optimism. Diversified businesses, new hotel signings, and healthy margins in key segments position it well for sustained growth, aligning with bullish brokerage views.
India’s Hotels & Resorts sector is riding a strong upcycle, with nationwide occupancy around 64–68% and ADR near Rs 7,800–8,055, lifting RevPAR to roughly Rs 5,000–5,439 in 2024–25. Market revenue is projected near US$11.3–24.2 billion for hotels in 2025, underpinned by 99.5 lakh foreign tourist arrivals in 2024 and robust domestic demand.
With a market capitalization of Rs 1,01,896.40 crore, the shares of Indian Hotels Company Ltd were trading at Rs 715.85 per share, decreasing around 3.83 percent as compared to the previous closing price of Rs 743.45 apiece.
Brokerage Recommendations
HSBC, one of the well-known brokerages globally, gave a ‘Buy’ recommendation on the hotel stock with a target price of Rs 964 apiece, indicating a potential upside of 35 percent from Tuesday’s closing price of Rs 714 per share.
As per the brokerage, Q2FY26 results were broadly in line with estimates. The management’s H2 guidance indicates strong performance, supported by robust MICE demand and the reopening of key renovated hotels. Significant inventory additions, improved trading efficiency, and rising foreign tourist arrivals (FTAs) are expected to drive FY27 profitability, aided by a solid balance sheet and sustained growth momentum.
Financial & Operational Highlights
The company’s Q2FY26 results show a mixed performance. Revenue grew 12% year-on-year to Rs 2,041 crore, indicating healthy business momentum. However, net profit fell sharply by 45% to Rs 318 crore, suggesting margin pressures or higher costs impacted profitability despite top-line growth. Overall, earnings weakened despite improved sales.
At the end of the first half of the financial year, Indian Hotels had 46 new signings, taking its overall portfolio of 570 hotels. 26 new hotels were opened during this period, taking the total figure to over 250 operating hotels in the country with over 25,000 rooms.
As part of its strategic partnership with the Clarks Group, 14 hotels have been onboarded already to Indian Hotels’ sales and distribution network, and the remaining will be migrated in the coming months, Indian Hotels stated in its post-earnings release.
The company’s New & Reimagined Businesses showed strong growth. TajSATS reported Rs 577 crore revenue with 12% from non-aviation and a solid 23.6% EBITDA margin. New Businesses grew 21% to Rs 423 crore, with Ginger delivering Rs 362 crore and a 41% margin. Qmin expanded to 104 outlets, while amā Stays & Trails and Tree of Life continued portfolio expansion.
Written by Abhishek Singh
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