ITC Hotels extends rally on heavy volumes; up 12% in 2 days, nears new high

The Indian hotel industry is poised to continue its strong recovery in Q4FY25, fueled by healthy traction in MICE activities, cultural events, and a strong wedding season.

Shares of ITC Hotels surged 6 per cent to Rs 188.20, extending its previous day’s 6 per cent gain, on the BSE in Wednesday’s intra-day trade amid heavy volumes in an otherwise subdued market. The stock is trading higher for the third straight day, having rallied 13 per cent during the same period. It is trading close to its 52-week high of Rs 189 touched on January 29, 2025.

 

ITC Hotels, which was recently demerged from ITC Limited, began trading in the stock markets on January 29.

 

At 09:46 AM; ITC Hotels shares were trading 5 per cent higher at Rs 187.25, as compared to the 0.05 per cent rise in the BSE Sensex. A combined 6.1 million equity shares have changed hands on the NSE and BSE.

 

 

Operating across all hospitality segments, ITC Hotels showcases a diverse portfolio of hotels through 6 vibrant brands – including ITC Hotels and Mementos in the luxury space, Welcomhotel in upper upscale, Storii in boutique premium experiential segment, Fortune in midscale and WelcomHeritage in heritage leisure. This multi-dimensional approach enables ITC Hotels to cater to a wide spectrum of travellers seeking a variety of experiences.  ALSO READ | Stock Market LIVE Updates: Sensex climbs 150 pts to 75,450; Nifty at 22,900; PSB, Metal, Oil gain 1%

 

In the October to December 2024 quarter (Q3FY25), ITC Hotels reported its best-ever quarterly performance. The business delivered stellar performance during the quarter with revenue at Rs 922 crore, which grew by 14.6 per cent year-on-year (Y-o-Y), driven by a strong performance in retail, weddings, and food and beverage segments, despite a high base. 

 

Profit before tax, meanwhile, stood at Rs 302 crore, up 43.4 per cent Y-o-Y, driven by the retail, wedding, and food & beverages (F&B) segments.

 

Earnings before interest, tax, depreciation and amortisation (Ebitda) margin expanded by 450 bps Y-o-Y driven by higher RevPAR or Revenue per Available Room, operating leverage and strategic cost management initiatives. During the quarter, the company opened five properties with 330 rooms, while it signed 29 hotels in the past 12 months.

 

Last month, global brokerage Jefferies initiated coverage on ITC Hotel, assigning a ‘Buy’ rating to the stock. The brokerage has estimated ITC Hotels' share price target at Rs 240 in its base case scenario. In its bull case, it has a 12-month target price of Rs 280 on ITC Hotels share.  ALSO READ | Metal stocks shine: SAIL, JSW Steel rally up to 5% on 12% safeguard duty

 

“ITC Hotels is the second biggest hotels chain in the India Hospitality space, fairly diversified across metrics, and is slated to benefit from cyclical recovery in the hotel sector. Near-term growth drivers include scale up of recent greenfields and an increase in share of Asset Light. With the demerger from parent behind, the delivery of performance in its independent existence, will re-rate the stock,” the brokerage had said in its report.

 

Meanwhile, according to Motilal Oswal Financial Services (MOFSL), the Indian hotel industry is poised to continue its strong recovery in January to March quarter (Q4FY25), fueled by healthy traction in MICE (meetings, incentives, conferences, and exhibitions) activities, cultural events, and a strong wedding season. 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 | BPCL share price rises 2% after inking multiple MoUs with various entities

 

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.