Indian Hotels dips 5%, stock hits over five-month low on heavy volumes

The outlook continues to remain healthy for Indian Hotels, led by continued traction in both the core business and new and reimagined businesses, say analysts.

Share price of Indian Hotels Company

 

Shares of Indian Hotels Company (IHCL) hit an over five-month low of ₹707.20, falling 5 per cent on the BSE in Thursday’s intra-day trade amid heavy volumes after the company reported the financial results for second quarter of financial year 2025-26 (Q2FY26) results.

 

The stock price of the Tata Group Company was quoting at its lowest level since May 9, 2025. IHCL is India’s largest hospitality company by market capitalization. The stock had hit a 52-week low of ₹651.35 on November 5, 2024.

 

At 11:40 AM; IHCL was trading 4.4 per cent lower at ₹710.95, as compared to 0.09 per cent decline in the BSE. The average trading volumes at the counter jumped over 10-fold, with a combined 4.47 million equity shares changing hands on the NSE and BSE.

 

 

IHCL’s September quarter results

 

IHCL consolidated revenue grew by 12 per cent year-on-year (YoY) to ₹2,041 crore, largely in-line with street expectation of ₹2,065 crore. Hotel business revenue grew by 6 per cent while catering business revenue grew by 14 per cent during the quarter. Single digit revenue growth in the hotel business was mainly on account of lower social/wedding days (compared to last year) and exceptionally higher rainfalls in some regions during the quarter. 

 

Room revenue decreased by 3 per cent while food & beverages (F&B) revenue grew by just 2 per cent during the quarter. RevPAR stood almost flat at ₹11,000. 

 

Consolidated EBIDTA margins improved by 49bps YoY to 27.9 per cent in-line with street expectation of 27.5-27.7 per cent. EBIDTA grew by 14 per cent YoY to ₹570.1 crore. Hotel business operating EBIDTA margins was improved by 80bps YoY to 28.7 per cent while air catering business EBIDTA margins was down by 40bps to 23.3 per cent. Overall profit before tax grew by 17 per cent YoY to ₹452.7 crore. Higher incidence of tax led to 3 per cent decline in profit after tax to ₹316 crore, ICICI Securities said in a note.   

Brokerages view on IHCL

 

The management stated that the business has rebounded significantly, and business on books looks strong for the next 2 months. IHCL remains confident of achieving the guidance of double-digit revenue growth for the full year. Analysts at JM Financial Institutional Securities expects the company to report 12 per cent/15 per cent compound annual growth rate (CAGR) in Revenue/EBITDA over FY25-28E aided by 7 per cent CAGR in ARR and gradual improvement in occupancy. The brokerage firm maintains ADD rating with a Mar’27 target price of ₹835, valuing the company at 27x Mar’28 EBITDA.

 

IHCL’s Q2 performance was affected by high base of corresponding quarter last year and higher rainfall. The quarter does not reflect the true picture of the entire year. Management in the concall was confident of strong business performance in H2 and maintained its guidance of double-digit revenue growth for FY26. The stock has underperformed the broader indices and considering near growth outlook, ICICI Securities maintain it as one of preferred pick in the hospitality space.

 

IHCL reported steady consolidated revenue growth in Q2FY26, led by healthy growth in subsidiaries (up 24 per cent YoY), while standalone revenue rose only 2 per cent on the back of renovations, a high base (high-profile weddings in the base quarter), and extreme weather conditions. RevPAR/ARR/OR remained largely flat YoY for its standalone business, Motilal Oswal Financial Services said.

 

The outlook continues to remain healthy for IHCL, led by continued traction in both the core business and new and reimagined businesses. The brokerage firm expects the growth momentum to continue in the medium term, led by a strong room addition pipeline in owned/management hotels (~4,000/18,000 rooms), continued favorable demand-supply dynamics, and increasing meetings, incentives, conferences, and exhibitions (MICE) activities in India. The brokerage firm reiterates BUY rating on IHCL with SoTP-based target price of ₹880.