Target: ₹262

CMP: ₹214.40

ITC Ltd entered the Hotels business in 1975, with the opening of a Hotel in Chennai. Over the years, it has expanded to 140 properties across the country and has about 13,300 rooms in 90+ destinations. ITC Hotels operates under various brands including ITC Hotels and Mementos (luxury), Storii (boutique), Welcomhotel (upscale), Fortune (midscale), and WelcomHeritage (heritage).

While expansion will be primarily via managed route and accruals are expected to be comfortable compared to capex requirements, ITC will be a strong anchor shareholder in any of the growth plans/strategies that ITC Hotels seeks to execute.

Adoption of an asset light model in the form of managed hotels is expected to keep its balance sheet less leveraged with significant liquidity. ITC Hotels remains a strategically important entity for ITC, reflected in 40 per cent shareholding and board representation where strategic inputs will be provided.

By 2030, ITC Hotels aims to cross the 20,000-key mark, While the hotel industry growth in FY25 was driven by pricing (industry rates grew 8 per cent y-o-y), ITC Hotels lagged with a pricing growth of 4 per cent, implying a scope to increase rates in future.

We would recommend a Buy with a target price of ₹262 in the next 9-12 months’ time period.

Published on June 16, 2025