ICICI Securities has increased its target price for ITC Hotels to ₹235, citing strong expansion plans and rising management fees. The brokerage expects steady growth in revenue and operating profits through 2029, driven by the launch of new hotel properties across its portfolio.
ICICI Securities has updated its outlook on ITC Hotels, raising the target price to ₹235 from ₹229. This revision comes as the brokerage adjusted its valuation model, moving to a forward-looking multiple based on expected earnings for March 2028. The move reflects confidence in the company’s ability to manage its hotel portfolio effectively amid shifting market conditions.
Revenue and Profit Growth Forecasts
The brokerage anticipates a steady performance from the hotel business, forecasting a 9% annual growth rate in Revenue Per Available Room, or RevPAR, through fiscal year 2029. This metric is a key measure of performance for hotel operators, indicating how much money a hotel makes per room available for booking. Additionally, management fees are expected to grow by 16% annually over the same period. On a consolidated level, the brokerage projects an 11% revenue growth rate and a 14% growth rate in EBITDA, which is the profit before interest, taxes, depreciation, and amortization, through 2029.
Expansion and Valuation Context
The company’s growth strategy remains centered on the opening of new hotel properties, which is expected to support these revenue projections. The valuation of ₹235 per share takes into account several specific financial factors. These include a projected net cash position of ₹12.1 billion by March 2028, the lease premium for the company’s hotel in Dwarka, and the net asset value of ₹9.1 billion from its residential project in Sri Lanka.
Business Risks to Consider
While the outlook remains positive, investors should be aware of several factors that could influence performance. The hospitality sector is sensitive to macroeconomic shifts and changes in travel demand. If there is a slowdown in how many rooms are filled or if the Average Room Rates, known as ARRs, fall below expectations, it could pressure financial results. Furthermore, the company faces the risk of delays in its development pipeline. Any hold-ups in building or opening new hotels could push back the expected timelines for revenue generation and affect the pace of growth. Monitoring the company’s ability to execute its expansion projects on time and maintain consistent occupancy levels will be important for investors tracking the stock.