Buy Indian Hotels: target of Rs 969: ICICI Securities

Moneycontrol • 10 days ago

Original source

Key Investment Pillars

  • Strong domestic demand: IHCL's Q2FY27 performance was driven by a 25% YoY growth in domestic hotels' LTL RevPAR, with a 22% increase in room revenue and 20% growth in F&B revenue.
  • Robust pipeline of new hotels: As of Sep'26, IHCL has ~34,200 operational keys and a pipeline of ~34,800 keys set to open over the next 4–5 years, which is expected to drive medium-term growth.
  • Upside from recent acquisitions: The strong performance of recent acquisitions, such as Atmantan, is expected to contribute to IHCL's growth.
  • Valuation: IHCL's valuation is reasonable, with a target price of INR 969, based on 29x Sep'28E EV/EBITDA.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for: (1) continued strong domestic demand, (2) successful execution of the company's pipeline of new hotels, (3) upside from recent acquisitions, and (4) industry trends, such as RevPAR growth and management fee income. Risks to the thesis include geopolitical demand disruptions and domestic demand slowdown.