ITC Hotels shares: Jefferies sees 32% upside; stock down 19% in 2026 so far

Jefferies has retained its 'Buy' rating on ITC Hotels Ltd, with a target of Rs 210,  implying 22 per cent potential upside. The global investment bank said ITC Hotels is boosting its asset-light mix and targeting two-third managed keys against 60 per cent today, as inventory grows from 14,300 to 22,000, supporting margin and return on capital employed (ROCE) expansion.

On Tuesday, ITC Hotels shares were trading 2.2 per cent higher at Rs 159.32 apiece, trimming its year-to-date losses to 18.95 per cent.

"We value ITC Hotels at Rs 210, based on 23 times FY28 (Hotel) EV/Ebitda. Key risks include a slowdown in global economy, resurfacing of issues like pandemic, issues in occupancy ramp up of recent greenfields and a delay in ramp up of management contracts," Jefferies said.

The global investment bank, which hosted the ITC Hotels' management at Jefferies India Forum 2026, said operation metrics at the Sri Lanka property has continued to improve, aiding consolidated ROCE, noting that the management expects sustained revenue performance, supported by strong domestic leisure demand & favourable supply-demand dynamics, particularly in supply-constrained metro markets.

Excluding recent disruptions, the ITC Hotels management expects sustainable revenue performance, driven by robust domestic travel demand, weddings, leisure travel, and a gradual recovery in business travel.

"FTA contribution has moderated to 30 per cent from 35-40 per cent pre Middle East crisis. Occupancy improved to 76 per cent in Q1 (vs 74 per cent in FY26), while roughly two-thirds of RevPAR growth was driven by ARR and one-third by occupancy," Jefferies said.

The hotels industry remains primarily rate-led and sees further occupancy upside as newer properties mature. Notably, the Colombo hotel turned profitable and delivered a 400 basis points improvement in occupancy in Q1, Jefferies said.