Indian Hotels, Samhi, ITC Hotels gain up to 3% today; should you check in?

Hotel stocks were rising in trade today as expectations that the demand for branded hotel rooms in India may continue to outpace supply growth

Hotel shares today

 

Shares of hotel companies, like Indian Hotels Company, Samhi Hotels, Valor Estate, EIH, and ITC Hotels, rallied up to 3 per cent on the BSE in Wednesday's intraday trade on expectations of healthy June quarter earnings. In comparison, the BSE Sensex was up 0.55 per cent at 82,507 at 09:38 AM.

 

Why are hotel stocks rising today?

 

According to industry estimates, demand for branded hotel rooms in India may continue to outpace supply growth, which remains moderate. As per Horwath HTL, a private consulting and strategic advisory firm in the hospitality sector, the industry has a pipeline of 105,000 branded rooms, expected to be rolled out by 2029, subject to some slippages. This trend reflects a positive outlook for the industry, fuelled by rising tourism, business travel, and infrastructure improvements. 

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Motilal Oswal on Hotels sector outlook

According to the brokerage, the Indian hospitality industry is well-positioned to maintain its growth momentum in FY26, driven by healthy RevPAR (Revenue Per Available Room) growth. This, it said, is expected to be majorly driven by an increase in ARR and higher occupancy levels, supported by continued traction in Meetings, Incentives, Conferences, and Exhibitions (MICE) activities.

 

"According to our recent channel checks, key hospitality players are likely to witness 11-12 per cent year-on-year (Y-o-Y) RevPAR growth in Q1FY26, primarily driven by ARR gains (10-11 per cent), given that occupancy rates are already at higher levels," it said in a report dated June 25.

 

Further, according to The Indian Hotels Company, while heightened trade tensions and global geopolitical risks weigh strongly on the economy, the government's continued support through tourism-friendly policies, infrastructure spending, and ease-of-travel initiatives are expected to keep the sector on a stable growth trajectory.

 

Notably, an emerging theme in the hospitality industry is the rise of spiritual tourism. Renowned for its profound spiritual heritage and numerous sacred sites, India's spiritual tourism market is projected to be worth around $59 billion by CY28, according to IBEF. The Ministry of Tourism advanced its flagship schemes such as Swadesh Darshan, PRASHAD, UDAN, and Dekho Apna Desh, encouraging regional and cultural tourism.   

Hotel stocks in India: should you buy?

 

Shares of Indian Hotels Company, a Taj Group enterprise, gained 3 per cent to ₹786.30 after brokerage firm JPMorgan initiated coverage on the stock with an "overweight" rating. The brokerage has a price target of ₹890 on Indian Hotels, reports suggest.

 

However, thus far in the calendar year 2025, Indian Hotels Company has underperformed the market by falling 10 per cent, as compared to 5 per cent rise in the BSE Sensex.

 

ITC Hotels share price, meanwhile, gained 1.3 per cent to ₹219.95 per share. Analysts at ICICI Securities believe strong portfolio brands, sturdy balance sheet, and efficient capital allocation makes ITC Hotels a formidable player in the hospitality space.

 

The brokerage firm expects its revenues, Ebitda, and PAT to grow at a CAGR of 15 per cent, 19 per cent, and 29 per cent, respectively, over FY25-28E. Analysts at the brokerage recommend a 'Buy' rating on the stock, assigning a share price target of ₹261 (valued at 30x FY27E EV/EBIDTA).

 

"ITC Hotels has a debt free balance sheet with cash reserves of ₹1,750 crore. With efficient capital allocation, investing 8-10 per cent of revenues (₹ 350- 450 crore) for capex on renovation/on-going projects, the cash flow generation is expected to be strong in the coming years. The company can utilise it for inorganic initiatives and reward shareholders with good dividend payout in the coming years," ICICI Securities said in a company update.

 

Motilal Oswal, meanwhile, has a 'Buy' rating on Indian Hotels (target: ₹940) and Lemontree Hotels (target: ₹200).

 

"We anticipate hotel companies to post healthy growth in FY26/FY27, supported by an increase in ARR across hotels; healthy occupancy levels propelled by favorable demand-supply dynamics; and increased corporate travel, MICE, weddings, and other social events," it said.