IHCL, LemonTree, Chalet among 5 hotel stocks to buy; analysts see up to 49% upside

IDBI Capital has maintained a positive view on the domestic hospitality sector and picked Indian Hotels Company Ltd, Chalet Hotels Ltd, Lemon Tree Hotels Ltd, Apeejay Surrendra Park Hotels Ltd and Brigade Hotel Ventures Ltd among its preferred listed hotel stocks.

The domestic brokerage expects the recovery in average daily rates (ADR) to continue, with its database of 171 hotels across eight cities showing ADR for the lower price band rising 11 per cent year-on-year (YoY), while the higher price band saw a 6 per cent YoY increase. On a month-on-month basis, ADR in the lower price band rose 15 per cent, while the higher price band declined marginally by 2 per cent. Delhi, Goa and Bengaluru were among the better-performing markets.

The hotel sector is also seeing healthy additions to hotel inventory, largely through management contracts and licence agreements. Indian Hotels and Lemon Tree Hotels added six hotels each in August, according to IDBI Capital. The brokerage believes consolidation among organised hotel operators could further support ADR improvement over the long term. Here are five hotel stocks that IDBI Capital has 'Buy' rating on:-

Indian Hotels share price target: Rs 869

IDBI Capital has a BUY rating on Indian Hotels with a target price of Rs 869, implying an upside of 20.7 per cent from its cited price of Rs 720. The brokerage sees the company's strong hotel pipeline and sustained demand as key growth drivers.

Separately, ICICI Securities has also retained a BUY rating on Indian Hotels with a target price of Rs 925, citing its strong pipeline and demand tailwinds. The brokerage said Indian Hotels had around 33,600 operational keys as of June 2026, with another 32,600 keys in the pipeline over the next four to five years. It expects consolidated revenue and Ebitda to grow at compounded annual growth rates of 12 per cent and 15 per cent, respectively, over FY26-FY29E.

Lemon Tree Hotels share price target: Rs 158 

Lemon Tree Hotels has the highest upside among the five stocks covered by IDBI Capital. The brokerage has a BUY rating with a target price of Rs 158, against its cited price of Rs 106, implying 48.7 per cent upside.

The company added six hotels in August, including properties in Manali, Madurai, McLeodganj, Visakhapatnam, Bharuch and Vadodara. These additions include both signed and operational properties, strengthening Lemon Tree's presence across multiple leisure and business destinations.

Brigade Hotels Ventures share price target: Rs 86

Brigade Hotels is another preferred pick, with IDBI Capital assigning a BUY rating and a target price of Rs 86, compared with Rs 58 in the brokerage's valuation snapshot. This implies an upside of 47.6 per cent. The brokerage expects the ongoing addition of hotel inventory and industry consolidation to support improvement in average daily rates over the long term.

Park Hotels share price target: Rs 138

Apeejay Surrendra Park Hotels has a BUY rating and a target price of Rs 138, against the cited price of Rs 112. The brokerage sees 23.6 per cent upside in the stock. IDBI Capital said the domestic hospitality industry is gearing up for the festive and wedding season, along with a pickup in corporate travel and MICE activities.

Chalet Hotels share price target: Rs 897 

Chalet Hotels has a BUY rating from IDBI Capital, with a target price of Rs 938 versus its cited price of Rs 897. The brokerage sees a more modest 4.6 per cent upside in the stock. The brokerage said ADR recovery was supported by higher rates around the Independence Day weekend and expects healthy RevPAR growth in 9MFY27.

Key trigger: festive, wedding season

IDBI Capital said the domestic hospitality industry is entering the festive and wedding season, while corporate travel and MICE activity are also picking up. It expects healthy RevPAR growth in 9MFY27, supported by a combination of occupancy growth and higher ADR. The brokerage also pointed to the domestic demand-supply mismatch and rising spending on travel as key structural demand drivers.

The broader industry outlook is also supportive. ICRA expects Indian hospitality industry revenues to grow 7-9 per cent in 2026-27, following an estimated 11 per cent expansion in 2025-26. It expects premium hotel occupancy to remain at 72-74 per cent, while average room rates are projected to rise to Rs 8,600-8,800 in 2026-27 from Rs 8,200-8,500 in 2025-26.

IDBI Capital's hotel-stock picks: Lemon Tree Hotels offers the highest potential upside at 48.7 per cent, followed by Brigade Hotels at 47.6 per cent, Park Hotels at 23.6 per cent, Indian Hotels at 20.7 per cent and Chalet Hotels at 4.6 per cent. All five carry a BUY rating from the brokerage.