Brokerages bullish on ITC Hotels after Q3; see strong growth ahead

ITC Hotels reported its December quarter (Q3FY26) results on Tuesday, during market hours. The stock closed 2.6 per cent lower at ₹180.3 per share. 

 

At 9:29 AM today, ITC Hotels' share price was trading 0.17 per cent lower at ₹180 per share. In comparison, Sensex was down 0.06 per cent at 82,127.75.

ITC Hotels Q3 results recap:

• In Q3, ITC Hotels reported a 9.4 per cent increase in its consolidated net profit to ₹235.13 crore, as compared to ₹214.9 crore. On a quarter-on-quarter (Q-o-Q) basis, net profit jumped 77 per cent from ₹132.77 crore.
• The company said its financial results include the impact of implementing the new Labour Codes, which led to a one-time exceptional cost of ₹52.53 crore.
• The hospitality giant's revenue from operations for the quarter soared 21.9 per cent year-on-year (Y-o-Y) to ₹1,224.27 crore, from ₹1,004.51 crore in Q3FY25. Sequentially, revenue was up 47.1 per cent from ₹832.04 crore.

Brokerages on ITC Hotels

Nomura in its note said ITC Hotels reported a strong Q3FY26, with revenue of ₹1,230 crore and Earnings before interest, tax, deporeciation and amortisation (Ebitda) of ₹470 crore, up 21 per cent and 23 per cent Y-o-Y, respectively. Both numbers beat consensus estimates.

 

 

The outperformance was largely driven by revenue recognition from deliveries at the Sapphire Residences project in Sri Lanka, which Nomura had earlier expected to begin only in Q4FY26. In the core hotels business, Revenue Per Available Room (RevPAR) rose 12 per cent Y-o-Y, while segment revenue and Ebitda were broadly in line with Street expectations.

 

Looking ahead, Nomura expects consolidated revenue and Ebitda to grow at a CAGR of 15 per cent and 18 per cent, respectively, over FY25–FY28F. The brokerage also estimates strong annual cash generation of ₹800–1,000 crore over the same period, which should support inorganic growth opportunities.

 

Nomura maintained its ‘Buy’ rating on ITC Hotels with a target price of ₹230. 

 

Meanwhile, JM Financial Institutional Equities said ITC Hotels delivered a steady Q3FY26. The brokerage highlighted that ITC Ratnadipa in Sri Lanka continued to lead the market on RevPAR and turned Ebitda-positive on a 9MFY26 basis, aided by record foreign tourist arrivals in the country.

 

On expansion, JM Financial noted that ITC Hotels has secured a 0.9-acre leasehold parcel at Yashobhumi, Dwarka (New Delhi) for a luxury five-star hotel, strengthening its owned-asset pipeline, which now includes four upcoming properties. The land has been allotted on a 91-year lease for a one-time premium of ₹330 crore.

 

In line with its asset-light strategy, the company commissioned six new hotels across India, taking its operational footprint to over 150 hotels with around 14,000 keys.

 

JM Financial expects revenue and Ebitda to grow at a compound annual growth rate (CAGR) of 11 per cent and 14 per cent, respectively, over FY25–FY28E, and maintained a ‘Buy’ rating with a target price of ₹235.

 

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