Shares of recently demerged ITC Hotels have rallied a whopping 50% in six months. The company’s debt-free status, strong balance sheet and expansion plans, along with industry tailwinds, have fueled this rise in ITC Hotels shares.
ITC entered the hospitality business five decades ago, and since then, it has evolved into an industry leader. ITC Hotel’s portfolio is spread across six distinct hotel brands with ~62% inventory under ‘ITC Hotels’ and ‘Mementos’ brands, which are positioned in the luxury segment.
The company, during its Q1 earnings, said it achieved a key milestone of crossing the 200 hotels mark and is now targeting to reach 220 operational hotels and over 20,000 keys by 2030.
“Having developed a strong portfolio of owned assets (5,500 keys) over the last two decades, the company has an asset-light pipeline to further expand its footprint to over 200 hotels and ~20,000 keys by 2030,” said JM Financial.
According to Harshal Dasani, Business Head at INVAsset PMS, the rally in ITC Hotels share price is not just a company-specific phenomenon but rather signals investor rotation into discretionary and premium consumption plays.
“Hotel-focused counters like Taj GVK, Royal Orchid, and Indian Hotels are also witnessing heavy buying momentum, underpinned by robust demand fundamentals. Occupancy rates are climbing, driven by a surge in domestic travel, urban leisure, and premium spending. This momentum is further amplified by India’s structural rise in per-capita income, an expanding middle class, and a growing appetite for experiential and luxury stays,” Dasani said.
Can ITC Hotels shares rally more?
While the tailwinds are in place, analysts cannot rule out short-term consolidation in the ITC Hotels share price following a sharp run.
JM Financial said ITC Hotels has delivered a 22% CAGR in EBITDA over FY23-25, but near-term growth remains restricted with no new assets getting commissioned till FY28E. Dasani, too, opined ITC Hotels’ sharp run-up could lead to near-term consolidation as markets digest gains, but he finds the long-term trajectory intact.
“Investors betting on premium hospitality as a structural growth story may see temporary pauses as entry points rather than trend reversals, especially given improving balance sheets, higher RevPARs, and sustained pricing power across the sector,” Dasani said.
However, JM Financial said that while robust cash generation can enable it to accelerate growth by way of inorganic acquisitions, it believes such an outcome is adequately priced in at current valuations of ~30x on FY27E earnings.
The brokerage initiated coverage with a ‘SELL’ rating on ITC Hotels and a target price of ₹215, valuing the company at 25x Jun’27 EBITDA (15% discount to IHCL’s target multiple).
ITC Hotels shares: Tech view
Anshul Jain, Head of Research at Lakshmishree, also finds the ITC Hotels shares caught up in a consolidation phase.
“Post IPO base breakout at 180, ITC Hotels rallied sharply to test 261.6. Since then, the stock has entered a consolidation phase, forming a defined range of 255–225. This sideways action is healthy after a strong run-up, as the stock needs time to digest gains and align with its weekly moving averages,” he said.
The range may persist for a few more weeks until moving averages catch up, he added. He expects sustained breakout above 255 will open doors for fresh highs, while a breakdown below 225 may delay the upmove.
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