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Brokerage Firm Reaffirms Positive Stance on IHCL
Motilal Oswal Financial Services has reiterated its 'Buy' recommendation for Indian Hotels Company Limited (IHCL), setting a target price of Rs 850 per share. This valuation implies a potential upside of approximately 30% from recent trading levels. The brokerage's positive outlook is underpinned by IHCL's consistent track record of enhancing profitability, the growing contribution from its managed hotel portfolio, steady brand expansion, and a robust balance sheet. The firm noted that the company's operational performance over recent fiscal years supports expectations for continued growth. The stock was trading around Rs 654 on January 22, 2026 [40].
Robust Financial Performance and Strategic Expansion
IHCL has demonstrated significant financial progress, with consolidated revenue, EBITDA, and adjusted PAT exhibiting compound annual growth rates (CAGRs) of 13%, 23%, and 39% respectively between FY20 and FY25 [Source A]. During the same period, EBITDA margins expanded considerably from 21.7% in FY20 to 33.2% in FY25 [Source A], and return on capital employed (ROCE) improved from 7.1% to 17.5% [Source A]. Motilal Oswal projects these growth trends to continue, forecasting revenue, EBITDA, and adjusted PAT CAGRs of 14%, 18%, and 17% respectively over FY25–28, with ROCE expected to reach approximately 23.9% by FY28 [40].
The company's strategic shift towards an asset-light model has been a critical factor in margin expansion. Managed keys recorded a CAGR of approximately 17.4% from FY20–25, significantly outpacing the 3.6% CAGR for owned keys during the same period [40]. This strategy enhances operating leverage, cash flow generation, and capital efficiency.
Ginger Brand and Inorganic Growth Initiatives
The Ginger brand has been identified as a key growth engine in the mid-scale segment. Following its re-imagining, Ginger has reported an annualized revenue growth of about 18% between FY20–FY25, with margins improving from approximately 22.9% to 34% [Source A]. IHCL aims to expand the Ginger network substantially, targeting nearly 250 hotels within the next 12–18 months, up from around 108 hotels as of September 2025 [Source A]. Recent acquisitions, including a 51% stake in ANK Hotels and Pride Hospitality for Rs 204 crore (adding 135 hotels for potential rebranding under Ginger) [3, 11], and a majority stake in luxury wellness brand Atmantan [35, 36], further bolster IHCL's diverse portfolio and entry into high-margin segments. Atmantan reported EBITDA margins of around 50% and a revenue CAGR of approximately 25% during FY19–25 [Source A].
Supportive Sector Outlook and Valuation
The Indian hospitality sector is experiencing a favorable operating environment, with demand growth estimated between 9–11%, consistently exceeding supply growth of approximately 6–7% [Source A]. This imbalance is expected to support occupancy levels and pricing power across key markets [10, 16]. Several reports project continued healthy growth in the sector for FY2026 [10, 15, 21].
Motilal Oswal's target price of Rs 850, coupled with the current stock price around Rs 654, suggests a potential ~30% upside. The company's P/E ratio is approximately 55-57x as of January 2026 [1, 2, 6].