ITC Hotels gets new 'Buy' from ICICI Securities on strong growth visibility

ICICI Securities said ITC Hotels 'asset-right' strategy, adopted in 2018, positions it well for scalable, capital-efficient growth

ICICI Securities initiated coverage on ITC Hotels Ltd. with a 'Buy' rating, citing strong growth visibility supported by its 'asset-right' expansion strategy, new property additions and rising operating leverage.

 

The brokerage set a target price of ₹250, an upside potential of 21 per cent from Friday's close. It noted that ITC Hotels net cash balance of nearly ₹1,700 crore as of March 2025 provides ample flexibility for expansion. The company plans to expand its portfolio from about 13,600 operational keys in September 2025 to more than 20,000 keys by 2030, it said. 

 

ICICI Securities expects a 9 per cent Revenue Per Available Room (RevPAR) CAGR over FY25-28, while management fees are projected to rise at 17 per cent CAGR, aided by a strong pipeline of new hotel openings. It estimates consolidated revenue to grow at 12 per cent CAGR and Ebitda at 15 per cent CAGR over FY25-28, with consolidated Ebitda margins improving by 300 basis points to 37 per cent in FY28.  ALSO READ | ICICI Sec hikes BHEL target on improving fundamentals, strong order book 

The brokerage said the company's 'asset-right' strategy, adopted in 2018, positions it well for scalable, capital-efficient growth. A pipeline of 59 managed hotels with about 5,500 keys, greenfield projects, and the scaling up of hotels opened since FY20 are expected to drive performance. 

 

ITC Hotels has three new hotel projects in development, adding more than 400 keys across Puri (118 keys under Epiq Collection), Bhubaneshwar (100+ keys under Welcomhotel) and Visakhapatnam (200 keys). The Odisha hotels are expected to open in FY28, while the Vizag property is scheduled for FY30, with a combined capex of ₹800-900 crore.

 

Key risks for the views include slower growth in occupancies or room rates and delays in executing upcoming hotel assets, ICICI Securities said.  ALSO READ | Netflix-Warner Bros deal to weigh on Indian multiplexes, up OTT competition

ITC Hotels stock price movement 

The company's stock rose as much as 2.96 per cent during the day to ₹207.5 per share. The stock pared gains to trade 0.10 per cent lower at ₹205 apiece, compared to a 0.66 per cent decline in Nifty 50 as of 1:17 PM. The counter has risen 14 per cent this year, compared to a 10.5 per cent advance in the benchmark Nifty 50. ITC Hotels has a total market capitalisation of ₹42,821.36 crore.