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1. THE SEAMLESS LINK
Motilal Oswal Financial Services' latest 'Morning India' report signals selective optimism, reinforcing 'Buy' ratings on Indian Hotels Company (IHCL), Apollo Hospitals, and Zomato (referred to as Eternal). These calls are underpinned by compelling operating metrics, projected earnings growth, and strategic expansion initiatives across their respective sectors. The brokerage's stance suggests a continued belief in the fundamental strength of these companies despite varying market dynamics.
The Sectoral Outlook and Brokerage Consensus
The Indian hospitality sector is projected for a normalized revenue growth of 6-8% in fiscal year 2026, with occupancies expected to hold at 72-74% and average room rates rising to approximately ₹8,200-₹8,500. This growth is anticipated to be driven by domestic tourism and a demand surge outpacing supply additions. The quick commerce segment, meanwhile, is experiencing rapid expansion, with its market size expected to triple by FY28, driven by convenience and speed as norms. In healthcare, strong patient volumes and a focus on complex procedures are supporting growth, with Apollo Hospitals planning significant bed capacity additions. Against this backdrop, Motilal Oswal has set a target price of ₹850 for IHCL, implying a 30% upside; ₹360 for Zomato, suggesting a 27% potential gain; and ₹9,015 for Apollo Hospitals, indicating a 32% upside.
Indian Hotels Company (IHCL): Asset-Light Growth and Market Position
Motilal Oswal reiterated a 'Buy' on Indian Hotels Company (IHCL) with a target of ₹850. The brokerage highlights IHCL's robust outlook, driven by sustained traction in its core hospitality business and newer ventures. A strategic shift towards managed hotels has demonstrably boosted profitability, with managed keys showing a CAGR of about 17.4% between FY20 and FY25, outperforming owned hotel growth and improving margins. IHCL's operational performance has been strong, with consolidated revenue, EBITDA, and adjusted PAT showing CAGRs of 13%, 23%, and 39% respectively between FY20 and FY25, alongside significant EBITDA margin expansion. The company plans to aggressively expand its Ginger brand, targeting nearly 250 hotels in 12-18 months. Recent acquisitions, including a majority stake in Brij Hospitality for approximately $25 million, further bolster its portfolio. The company's P/E ratio stands around 50.5x-61.9x as of January 2026.
Eternal (Zomato): Navigating Competition in Quick Commerce
Motilal Oswal maintains a 'Buy' rating on Eternal (Zomato) with a target price of ₹360, anticipating a 27% upside. Despite acknowledging short-term volatility from intensifying competition and potential margin pressures due to discounting and lower minimum order values, the brokerage backs Eternal due to its market leadership in food delivery and the long-term potential of Blinkit. Zomato reported a 73% rise in consolidated net profit to ₹102 crore for Q3 FY26, with revenue tripling to ₹16,315 crore, largely driven by quick commerce. A significant milestone was achieved as Blinkit and Hyperpure turned EBITDA-profitable during the quarter, attributed to an improved assortment mix and supply chain efficiencies. The company's P/E ratio remains elevated, reported around 1,153x as of January 2026, signaling high growth expectations. Investors are monitoring the leadership transition with founder Deepinder Goyal stepping down as CEO, with Blinkit CEO Albinder Dhindsa set to take over.
Apollo Hospitals: Integrated Healthcare and Future Expansion
Motilal Oswal reiterated its 'Buy' rating on Apollo Hospitals with a target of ₹9,015. The firm sees a strong hospital engine complemented by an impending inflection in the HealthCo segment. Apollo Hospitals is preparing for significant growth by enhancing its complex case mix and expanding capacity, with plans to add 3,660 beds over the next five years. Hospitals remain the primary earnings driver, contributing about 50% of revenue and 83% of EBITDA, supported by operational efficiency and an improved case mix. Apollo 24/7 is on track to achieve EBITDA breakeven by 4QFY26, with offline pharmacy expansion and diagnostics integration poised to boost earnings. In Q2FY26, Apollo Hospitals reported a 26% year-on-year rise in profit to ₹477 crore and a 13% revenue increase to ₹6,304 crore. The company's P/E ratio stands around 56.78x-65.2x as of January 2026.
Valuations and Investor Sentiment
While Motilal Oswal maintains 'Buy' ratings, the current P/E multiples for these companies reflect market expectations of sustained growth. IHCL trades at approximately 50.5x-61.9x, Apollo Hospitals at 56.78x-65.2x, and Zomato at a significantly higher 1,153x. These valuations suggest investors are pricing in considerable future expansion, aligning with the growth projections provided by the brokerage. The target prices set by Motilal Oswal indicate a belief that current market prices do not fully reflect the companies' growth potential.
Recent Developments and Forward Projections
Recent developments underscore the growth narratives. IHCL has been active with acquisitions and international expansion. Zomato's focus on Blinkit's profitability and expansion is a key driver, alongside the recent leadership transition. Apollo Hospitals continues its expansion and aims for digital health integration, with its 24/7 platform nearing EBITDA breakeven. The brokerage projects significant CAGRs for IHCL (14% revenue, 18% EBITDA, 17% PAT over FY25–FY28) and Apollo Hospitals (14% revenue, 17% EBITDA, 24% PAT over FY25–FY28), reinforcing their positive outlook.