Indian Hotels, ITC rally upto 3% in weak market; brokerages see more upside

Hotel companies' share price today:

Shares of hotel companies are trading firm on the BSE in Friday’s intra-day trade in an otherwise weak market after reporting strong earnings for the quarter ended June 2025 (Q1F26). 

 

This is despite a weak May 2025, which witnessed a 1 per cent dip in the room demand due to geopolitical uncertainties. However, a strong recovery was witnessed in June 2025.

 

Shares of ITC Hotels hit a new high of ₹250.45, surging 3.5 per cent on the BSE in intra-day trade amid heavy volumes. The stock is trading higher for the third straight day, soaring 10 per cent after announcing Q1 results. 

 

 

Shares of Indian Hotels Company were up nearly 2 per cent to ₹767.85 in intra-day trade. Chalet Hotels and Ventive Hospitality were trading higher by 1 per cent each. In comparison, the BSE Sensex was down 0.64 per cent at 81,735 at 11:55 AM. 

Indian hotel sector outlook

The Indian Hotel Industry is poised to grow with significant tailwinds as moderating inflation and tax incentives provided by the government will maintain the higher spending toward discretionary and luxury categories/services. Equal weighted hotel index is forming higher peaks and troughs, indicating elevated buying demand despite geopolitical volatility, indicating inherent strength, according to analysts at ICICI Securities.

 

Demand for luxury hotels will continue in India with strong demand from domestic leisure travel and higher demand from improving foreign tourist arrivals. Hence, the brokerage firm expects revenue per available room (RevPar) will maintain double-digit growth momentum in H2FY26, with the occupancy ratio expected to improve by 100-200bps while average room rate (ARR) is expected to grow by 8-10 per cent.

 

According to ITC Hotels, a favourable 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 over the next few years. Further, the Government’s push for growth in foreign tourist arrivals is expected to continue fueling growth in the Indian Hospitality industry, the company said.

 

Strong demand from domestic leisure travellers, a steady recovery in foreign tourist arrivals (FTAs) and a resurgence in corporate travel are expected to keep hotel occupancy levels elevated, thereby supporting sustained growth in average room rates over the medium term, Chalet Hotels said. 

Brokerages' view on hotel stocks

Analysts at ICICI Securities have a ‘buy’ rating on Chalet Hotels with a target price of ₹1,010 per share. A prudent room expansion plan and strong industry tailwinds will help Chalet to maintain the strong growth momentum with revenues and profit after tax (PAT) expected to grow at a CAGR of 22 per cent and 23 per cent over FY25-27.

 

The brokerage firm also recommended a 'buy' rating on ITC Hotels with a price target of ₹282 per share. ITC Hotels registered resilient performance in Q1FY26 despite a temporary pause in May 2025. 

 

The outlook continues to remain strong for Indian Hotels, led by healthy traction in both the core business as well as new and reimagined businesses. Motilal Oswal Financial Services expects the strong momentum to continue in the medium term, led by a strong room addition pipeline and continued favourable demand-supply dynamics “We broadly maintain our FY26/FY27 Ebitda estimates and reiterate Buy with our SoTP-based target price of ₹900," the brokerage firm said in the result update.