ICICI Securities has maintained its BUY recommendation on Indian Hotels Company Ltd. (IHCL), projecting a robust trajectory for the hospitality major with a revised target price of Rs 941. Despite geopolitical disruptions and market volatility, IHCL turned in a resilient Q1 FY26, underpinned by strong room pricing and an ambitious growth roadmap culminating in 2030. Investors are encouraged by IHCL’s upward-trending revenues, margin improvements, and a dynamic expansion plan—poised to double revenue by the end of the decade.

ICICI Securities Maintains BUY: Upgraded Target at Rs 941

ICICI Securities stands firm on its bullish call, signaling strong investor confidence in Indian Hotels with a BUY rating and a target price of Rs 941. The recommendation, coming on the back of Q1 FY26 results, reflects optimism about IHCL’s growth and earnings dynamics, alongside manageable downside risks. The target factors a minor EBITDA haircut at the subsidiary level but preserves the premium 33x Mar’27 EV/EBITDA multiple—testament to sector leadership and capital discipline.

Financial Resilience: Robust Q1 FY26 Amid Headwinds

Indian Hotels posted a Q1 FY26 consolidated revenue of Rs 20.4 billion, up 32% year-over-year, and EBITDA of Rs 5.8 billion, exceeding expectations despite constraints from international and domestic geopolitical turbulence. Standalone average room rates (ARR) soared to Rs 14,552, reflecting a 12% YoY growth. This revenue uptick was achieved even as demand softened in certain periods, evidencing IHCL’s ability to maneuver through external shocks and sustain top-line momentum.

Strategic Roadmap: Doubling Revenue by 2030

The company is unwavering in its goal to double revenues by 2030, banking on strong industry tailwinds and transformative expansion—247 operational hotels as of April 2024, expected to rise to over 500 by FY30. IHCL’s execution blueprint incorporates high single-digit RevPAR growth, accelerating management fee income, and burgeoning new business revenues. The board has signaled that sustained outperformance will be catalyzed by organic and inorganic capex, digitalization, and international forays, pressing ahead with investments topping Rs 10 billion annually into renovations, greenfield developments, and digital upgrades.

Share Price Action: Levels and Investor Targets

The share trades close to Rs 754, notably down from its 52-week high of Rs 895 but up nearly 29% over the last year, offering scope for upside as per analyst consensus. ICICI Securities’ target of Rs 941 implies a projected return of 25%. Technical analysis also marks key price levels to watch for swing traders and investors alike:

Growth Drivers: Industry Tailwinds, Brand Strength, and Expansion

IHCL benefits from a potent confluence of demand consistently outpacing supply in India’s hotel industry, with sector demand expected to maintain a 9-11% CAGR through FY29 versus 6-7% supply CAGR. The company’s flagship ‘Accelerate 2030’ strategy leverages its Taj, Vivanta, SeleQtions, and Ginger brands, tapping untapped micro-markets, catering to diverse customer archetypes, and scaling its F&B and management contract businesses. Management reiterates double-digit revenue growth guidance for FY26, bolstered by stability in July bookings and recovery from recent external shocks.

Profitability Surge: Margins and Return Ratios on Uptrend

Forecasts see EBITDA margins expanding from 33.3% in FY25 to 35.6% in FY27, with consolidated net profit estimated at Rs 23 billion by FY27. Return on equity and capital employed are projected to climb to nearly 17% by FY27, underscoring IHCL’s operational efficiency. The company’s prudent cost optimization, incremental F&B, and management fee revenue bolster bottom-line growth in tandem with room rate hikes.

Key Risks: Monitoring Occupancy and Consumption Trends

Investment headwinds exist, notably the risk of declining occupancies or a broader slowdown in discretionary consumption. While Q1 saw some demand attenuation tied to geopolitical incidents, management asserts the impact remains transitory, with July trends pointing to normalized demand. Ongoing vigilance around macroeconomic factors and consumer sentiment remains essential for gauging realization of forward-looking targets.

Valuation: Sum-of-the-Parts Supports Premium Multiples

ICICI Securities values IHCL at 33x EV/EBITDA on estimated March 2027 numbers, yielding an equity value per share of Rs 941, including contributions from Taj GVK, Oriental Hotels, and TajSATS. The new estimate slightly reduces subsidiary FY26/FY27E EBITDA by 2–3%, but does not impact overall confidence in the aspirational growth paradigm.

Bottomline for Investors: Strong Fundamentals, Strategic Foresight—A Long-Term Compounder

With a compelling combination of sector leadership, resilience to shocks, well-articulated capital allocation, and expanding earnings, IHCL remains a marquee play in India’s booming hospitality sector. For investors with a medium- to long-term horizon, the stock offers an attractive risk-reward profile, fortified by robust balance sheet metrics, capital efficiency, and industry outperformance. Stay alert to price action near support levels for additional accumulation opportunities, but heed the dynamic nature of consumption-led and event-driven risks.