ITC Hotels: JM Financial, Elara share target prices post Q3 results, say this

Stock anlaysts on Wednesday said ITC Hotels delivered a steady operating performance in the December quarter, supported by healthy room metrics, resilient demand across segments and improving profitability at the Sri Lanka asset. Following the results, JM Financial suggested March 2027 target price of Rs 235 and maintained its 'Buy' rating on the stock.

JM Financial said ITC Hotels' Q3 results were in line with its expectations, aided by 9 per cent growth in average room rates (ARR) and 290 basis points expansion in occupancy, leading to revenue per available room (RevPAR) growth of 13 per cent YoY at the consolidated portfolio level. ITC Ratnadipa (Sri Lanka) maintained its market leadership position in terms of RevPAR and was Ebitda positive on a 9MFY26 basis, JM noted.

"Going forward, we expect ITC Hotels to report 11 per cent/14 per cent CAGR in revenue and Ebitda over FY25-28E aided by 7 per ecnt growth in ADR and ramp-up of the Sri Lanka asset. We value the stock at 25x EV/Ebitda on Mar’28E and maintain Buy with a target price of Rs 235," it said.

Elara Securities retained its 'Buy' on the stock with a lower target of Rs 253. "Through FY26-27, growth in the hotel business will be driven by a scale-up in occupancy at ITC Ratnadipa (operations have started in April 2024), and sale of branded residences at Sapphire Residences, as well as at the recently operationalized hotels (15 per cent inventory operating at

This brokerage lowered its estimates for Ebitda and adjusted PAT by 14 per cent each for FY26E, by 9 per cent and 5 per cent for FY27E and by 12 per cent and 8 per cent for FY28E, respectively, as it cut our growth assumptions for the hotel business and profitability estimates for the real estate business.

"We maintain Buy with a revised target of Rs 253 (Rs 266 earlier) as we roll forward valuations to Q3FY28E. Our TP is based on SOTP, valuing the hotel business at 28 times (unchanged) Q3FY28E EV/Ebitda and Sapphire Residences at 1x (unchanged) NAV," Elara said.

JM Financial said ITC Hotels currently has a portfolio of 213 hotels, with 152 operational and 61 in the pipeline. Aligned with its asset-light strategy, ITC Hotels continued to partner with asset owners to expand its footprint across Tier-II and Tier-III cities. 

In the December quarter, it opened new hotels in Bodh Gaya, Rishikesh, Siliguri, Sirmaur, Dungarpur and Jaipur. India International Convention and Exhibition Centre Limited (IICC Ltd) has allotted a 0.9 acre land parcel at Yashobhumi, Dwarka, New Delhi, to the company on a 91-year lease for the development of a premium five-star hotel, with construction expected to be completed by 2030. While the company has been actively strengthening the managed pipeline, this asset improves the visibility of its owned portfolio, which now has four upcoming assets, JM Financial said.

For the quarter, ITC Hotels clocked a 9 per cent YoY jump in its consolidated net profit at Rs 235 crore compared with Rs 215 crore in the same quarter last year. Its sales grew 21  per cent YoY to Rs 1,231 crore from Rs 1,015 crore YoY.