ITC Hotels, Ventive rally up to 6%; hit new highs on healthy outlook

In Q4 and the subsequent quarters of the next financial year, the sector is expected to witness demand buoyancy on account of large-scale regional events, weddings and sustained transient travel.

Hotels shares were in demand with ITC Hotels (up 6 per cent at ₹ 193.35) and Ventive Hospitality (up 5 per cent at ₹ 810.40) recording new highs on the BSE in Friday’s intra-day trade on healthy outlook. Growth momentum is expected to continue in January to March 2025 (Q4FY25) also, driven by business travel and MICE (meetings, incentives, conferences, and exhibitions)-related demand.

 

In India, the management of hotel companies said they saw the continuation of the strong demand for leisure hospitality. In Q4 and the subsequent quarters of the next financial year, the sector will continue to witness demand buoyancy on account of large-scale regional events, weddings and sustained transient travel, the management said.

 

Indian Hotels Company, Chalet Hotels, Samhi Hotels, EIH and Mahindra Holidays & Resorts India were trading higher in the range of 1 per cent to 4 per cent in intra-day trade. In comparison, the BSE Sensex was up 0.73 per cent at 76,907 at 01:18 PM.

 

The Indian hotel industry is poised to continue its strong recovery in January to March quarter (Q4FY25), fueled by healthy traction in MICE activities, cultural events, and a strong wedding season, analysts at Motilal Oswal Financial Services (MOFSL) said.

 

According to the brokerage firm’s recent channel checks, key hospitality players are likely to witness 12-14 per cent Y-o-Y RevPAR (Revenue Per Available Room) growth in Q4 (similar to Q3FY25), primarily driven by growth in average room rate (11-13 per cent) and higher occupancy levels.  ALSO READ | L&T share price rises 3% on securing 'Large' order from Brigade Group

 

MOFSL expects the overall hotel industry to maintain its growth rate in Q4, supported by industry tailwinds, favorable demand-supply dynamics, and corporate rate hikes leading to higher ARR and high occupancy levels. This, coupled with incremental contributions from inventory addition, stabilisation of key hotels, and reopening renovated hotels with additional keys, will lead to healthy earnings for most of the hospitality companies in Q4FY25, the brokerage firm said in the sector update.

 

Among individual stocks, Ventive Hospitality hit a new high of ₹ 810.40, gaining 5 per cent on the BSE in intra-day trade amid heavy volumes. The stock surpassed its previous high of ₹ 788.20 touched on February 7, 2025. It was trading at its highest level since listing on December 30, 2024. Currently, the stock quoted 26 per cent higher over its issue price of ₹ 643 per share. It recovered 55 per cent from its post listing low price of ₹ 522.65 touched on March 3, 2025.

 

Higher demand from domestic leisure travellers, recovery in foreign tourist arrivals (FTAs) and a revival in corporate travels will keep room demand high for hotel companies (also help in achieving higher room rentals) in the short- to medium-term, according to analysts at Mirae Asset Sharekhan.

 

Recent industry data shows that demand is expected to continue to grow in double digits (~12 per cent). However, the supply is expected to grow by ~9 per cent over the next 4-5 years. This augurs well for the industry because hotel performance in India is highly sensitive to supply and demand dynamics. Margins of hotel companies are likely to expand, aided by better operating leverage coupled with various cost-saving initiatives undertaken by companies, the brokerage firm said.