ITC Hotels stock upgraded to 'Add' at JM Financial after Q2; check target

JM Financial revised the ITC Hotels' target price to ₹235 per share, from ₹215 apiece earlier, after it reported its Q2 earnings

Shares of ITC Hotels Ltd. traded higher after analysts at JM Financial upgraded the stock to 'Add' as it reported a 74 per cent jump in its consolidated net profit for the second quarter of the financial year 2025-26 (Q2FY26).

 

ITC Hotels reported a better-than-expected performance for the September quarter, driven by stronger occupancy levels of 72 per cent in its standalone business, JM Financial said in its report. ITC Hotels on Friday reported a 74 per cent jump in its consolidated net profit at ₹132.77 crore for Q2FY26, from ₹76 crore in the same quarter last year.

 

The hospitality giant's revenue from operations stood at ₹832.04 crore in Q2FY26, up 8 per cent year-on-year (Y-o-Y) from ₹771.35 crore. On a sequential basis, revenue was up 2.8 per cent from ₹808.93 crore. ITC Hotels reported total expenses of ₹699.72 crore, marking a modest increase of 4.2 per cent Y-o-Y, and 3.6 per cent sequentially. 

 

Despite seasonal softness and the impact of heavy monsoon rains on travel sentiment, Ebitda rose 16 per cent Y-o-Y to ₹250 crore, beating JM Financial’s estimate of ₹230 crore. Ebitda margin expanded by about 200 basis points to 29.3 per cent, aided by higher room rates, increased fee income, and cost efficiencies.

 

JM Financial expects ITC Hotels to post a compound annual growth rate (CAGR) of 11 per cent in revenue and 14 per cent in Ebitda over FY25-FY28, supported by around 7 per cent growth in average daily rate (ADR) and ramp-up of its Sri Lanka asset. The brokerage revised its target price to ₹235 per share, from ₹215 apiece. 

 

ITC Hotels currently operates a portfolio of 207 hotels, comprising 146 operational properties and 61 in the pipeline. During the quarter, the company signed new hotels in Patna, Hyderabad, Tirupati, Wayanad, Nellore, and Mantralayam, strengthening its presence in high-potential markets.

 

The company unveiled a new upper-upscale brand, Epiq Collection, with two inaugural assets, an under-development owned hotel in Puri and a managed property in Tirupati. ITC Hotels aims to add around 1,000 keys under the Epiq Collection over the medium term, focusing on high-quality conversions and new builds.

ITC Hotels share price history

 

The company's stock rose as much as 2.11 per cent during the day to ₹226.6 per share, the biggest intraday rise since October 21 this year. The stock pared gains to trade 0.8 per cent higher at ₹223.7 apiece, compared to a 0.64 per cent advance in Nifty 50 as of 10:15 AM.  

 

Shares of the company rose for the second straight session and currently trade at the highest level since October 1 this year. The counter has risen nearly 25  per cent since its listing on January 29. ITC Hotels has a total market capitalisation of ₹46,548.78 crore.