ITC Hotels shares rally 11% in 3 days, hits new high on healthy outlook

ITC Hotels share price: A favorable demographic profile, steady domestic demand and rising consumption levels augur well for the hospitality industry in India

ITC Hotels share price today

 

ITC Hotels shares hit a new high of ₹222.60, gaining 3.5 per cent on the BSE in Friday's intraday trade amid heavy volumes. The stock price of the company is quoting higher for the third straight trading day, having rallied 11 per cent during the period. In the past two weeks, ITC Hotels stock has surged 22 per cent.

 

ITC Hotels, which was recently demerged from ITC Limited, began trading in the stock markets on January 29, 2025. The stock has recovered 41 per cent from its 52-week low level of ₹158, which it touched on February 25, 2025.

 

At 10:24 AM, ITC Hotels was quoting 1.6 per cent higher at ₹218.65, as compared to 0.65 per cent rise in the BSE Sensex. Around 6.44 million equity shares have, cumulatively, changed hands on the NSE and BSE so far in trade.

 

ITC Hotels Q4 results

 

ITC Hotels, on May 15, 2025, reported a record 40.8 per cent year-on0year (Y-o-Y) rise in consolidated net profit at ₹257 crore in the fourth quarter of financial year 2025—its first quarter post demerger from consumer goods major ITC Limited. The company had posted a net profit of ₹182.5 crore in the same period last year.

 

Its revenue from operations rose 17 per cent to ₹1,060.6 crore from ₹907.3 crore a year ago. Profit before interest, depreciation and tax (PBIDT) rose 12.1 per cent year-on-year to ₹365 crore from ₹325.7 crore. Earnings before interest, taxes, depreciation and amortisation (Ebitda) margins came at 40 per cent, expanding by 350 bps over last year, driven by higher Revenue per available room (RevPARs), growth in F&B revenue, higher management fees, structural cost interventions and operating leverage.

 

Room revenues continued their strong growth trajectory, driven by broad-based performance across segments such as retail, contracted bookings, weddings and airline crew. "The average daily rate (ADR) at approximately ₹12,500 and occupancy at 73 per cent saw robust year-on-year growth, supported by sustained demand across key markets and smart revenue management," the company stated in a release.

 

For the quarter, room revenues increased 16 per cent, buoyed by strong ADRs at approximately ₹15,000 (a 14 per cent increase) and high occupancy levels at 79 per cent. RevPAR grew by 17 per cent.

 

Hotels industry outlook

 

A favorable demographic profile, steady domestic demand and rising consumption levels augur well for the hospitality industry in India. Aggregate room demand in India is expected to grow ahead of supply. Further, potential for growth in foreign tourist arrivals (which still trail pre-pandemic levels by 12 per cent) and Government’s thrust on enhancing infrastructure and connectivity, boosting employment and promoting the tourism sector are expected to fuel growth in the Indian Hospitality industry, ITC Hotels said. 

 

Elara Capital on ITC Hotels

 

ITC Hotel has upgraded its expansion target to 220 hotels (200 earlier) with 20,000+ keys (18,000 earlier) by FY30, backed by a robust pipeline of 50 hotels (~4,500+ keys), with focus on brownfield opportunities.

 

ITC Ratnadipa in Colombo turned Ebitda positive in H2, highlighting a strong operational performance. RevPAR has shown robust growth, doubling in Q4 versus Q1. With healthy occupancy and improving margins, ITC Ratnadipa is now a meaningful contributor to both revenue and Ebitda and is expected to remain a key growth driver, going forward. 

 

The brokerage firm expects Ebitda to grow at a compounded annual growth rate (CAGR) of ~13 per cent for the hotel business through FY25-27E, led by scale-up in occupancy and growth in management fees income. ITC Hotel is expected to generate healthy free cashflow every year, which can become a drag on return on capital employed (RoCE), if not employed in productive assets.

 

"We have increased our topline and Ebitda estimates by 8 per cent and 5 per cent for FY26E and by 10 per cent and 9 per cent for FY27E. So, we raise our SoTP-based target price to ₹ 225 (₹ 203 earlier), valuing the hotels business at 28x (unchanged) FY27E EV/EBITDA and Sapphire Residences at 1x (unchanged) NAV," Elara Capital said in Q4 result update.