ITC Hotels shares extend rally for second day, rise 6% post-strong Q2; brokerages bullish, check share price targets

Shares of ITC Hotels, one of India's largest hospitality chains, jumped nearly 6 percent, extending their rally for the second day on Tuesday, 27 October, after the company reported strong earnings for the July-September quarter (Q2FY27), driven by robust revenue growth across its hotels and branded residences segments. Meanwhile, brokerages remained positive on the stock, citing strong demand, improving margins and an expanding hotel portfolio.

ITC Hotels shares opened at Rs 168.65 and rallied 5.67 percent to an intraday high of Rs 174.30, compared with previous closing of Rs 164.40, on the BSE. The stock, at around 11.21 am, was trading 1.76 percent higher at Rs 167.30.

Shares of ITC Hotels jumped as much as 7.8 percent to Rs 168.5 after the results announcement on Monday, before trimming some gains to trade 5 percent higher.

ITC Hotels Q2FY27 results: Net profit rises 52% YoY

ITC Hotels Ltd reported a 52.03 percent rise in its consolidated net profit to Rs 202.65 crore for the quarter ended September. The hospitality sector player had posted a net profit of Rs 133.29 crore during the corresponding July-September (Q2) period of the previous financial year.

During the reporting quarter, ITC Hotels' revenue from operations increased to Rs 1,054.14 crore from Rs 839.48 crore a year ago. The company's total expenses also rose to Rs 831.33 crore from Rs 699.72 crore a year ago.

"Aligned with its 'Asset-Right' growth strategy, the company completed the acquisition of the 130-key Welcomhotel Ahmedabad, which is now operated as an owned hotel with effect from September 1, 2026. The company also renovated over 200 keys in H1 FY27 (April-September) across its owned hotels in Kolkata, Bengaluru, Chennai and Delhi," ITC Hotels said in a statement.

Brokerages on ITC Hotels

Jefferies on ITC Hotels: Buy, target price Rs 220

Jefferies maintained a 'Buy' rating on ITC Hotels with a target price of Rs 220 per share. The brokerage highlighted the strong Q2 performance by the company, noting that excluding Sri Lanka residences, hotel revenue and EBITDA grew 17 percent and 28 percent YoY, respectively. Margins expanded by 270 basis points.

RevPAR rose 21 percent YoY, mirroring strong sector trends while management fee income grew 25 percent.

Jefferies also highlighted the company's expansion plans, including the completion of the Welcomhotel Ahmedabad conversion and the addition of a land parcel in Lucknow. ITC Hotels is targeting a 10 percent compound annual growth rate (CAGR) in room keys between FY26 and FY31, including 3-4 percent CAGR in owned keys.

The brokerage also raised its EBITDA estimates by 3-5 percent and estimates EBITDA to grow at a 14 percent CAGR between FY26 and FY29.

HSBC on ITC Hotels: Buy, target price Rs 205

HSBC retained a 'Buy' rating on ITC Hotels with a target price of Rs 205 per share. The brokerage stated that Q2FY27 EBITDA beat consensus estimates by 6 percent, while margins expanded by 200 basis points. RevPAR rose 21 percent YoY.

Although the company did not provide guidance for FY27, management indicated that earnings could grow at a low-double-digit to mid-teen rate over the next three to four years.

HSBC also noted that while the domestic operating portfolio delivered a return on capital employed (RoCE) of 19.5 percent, the group's overall RoCE is still low due to its Colombo assets and substantial treasury income.

JM Financial on ITC Hotels: Buy, target price raised to Rs 235

JM Financial maintained its 'Buy' rating on ITC Hotels and raised its target price to Rs 235 from Rs 225, after the company posted better-than-expected Q2 earnings. The brokerage stated performance was supported by healthy transient demand across key markets and buoyancy in the MICE business, aided by the BRICS Summit in New Delhi.

“Adjusted revenue (excluding residential) grew 17% YoY to INR 9.8bn (in line with JMFe) driven by a 14% YoY increase in ARR to around Rs 12,800 and a 481bps YoY improvement in occupancy to 76%, taking (consolidated LfL) RevPAR up 21% YoY to around Rs 9,700,” the brokerage said.

During the quarter, the company signed 12 hotels, completed the acquisition of Welcomhotel Ahmedabad and added a 2.8-acre land parcel in Lucknow to its land bank. The asset-light strategy continues to enhance return profile with H1FY27 RoCE (for the domestic operational portfolio) approaching c. 20%, it added.

The brokerage raised its FY27 and FY28 EBITDA estimates by 3 percent and 4 percent, respectively, and expects revenue and EBITDA to grow at CAGRs of 11 percent and 14 percent between FY26 and FY29.

ICICI Securities on ITC Hotels: Buy, target price Rs 235

Brokerage firm ICICI Securities retained its 'Buy' rating on ITC Hotels with an unchanged target price of Rs 235 per share. The brokerage highlighted 17 percent YoY growth in hotel revenue and 26 percent in hotel EBITDA during Q2FY27.

“ITCHL’s performance was propelled by a 21% YoY uptick in RevPAR (ARR up 14% YoY; occupancy up 500bps) and room/F&B revenue accelerating 22%/12% YoY, with management fees up 25% Yo,” it stated.

The brokerage said the company is confident of demand remaining buoyant in H2FY27 and estimate a 9 percent RevPAR CAGR with a management fees CAGR of 16 percent, over FY26-29, led by new hotel openings.

The brokerage estimates an 11 percent revenue CAGRs on a consolidated basis and 14 percent EBITDA CAGR over FY26-29.

Expansion plans: New hotels and Dubai subsidiary

In the quarterly results, ITC Hotels also informed that it has been allotted a 2.8-acre land parcel by Lucknow Development Authority, which would be utilised for developing a 200-plus-key luxury hotel.

During H1 FY27, the Group signed 20 hotels with over 1,600 keys, expanding its managed pipeline to 84 hotels with nearly 8,200 keys.

Besides, the Board of ITC Hotels approved the incorporation of a wholly owned subsidiary of the company in Dubai, United Arab Emirates, subject to receipt of the necessary regulatory approvals.

The proposed entity will be incorporated as a wholly-owned subsidiary of ITC Hotels and will be engaged in the business of operating hotels and restaurants, and other related activities.

"Necessary approvals for the incorporation of the proposed entity will be obtained from the concerned regulatory authorities in Dubai. Upon incorporation of the Proposed Entity, ITCHL shall subscribe 100 per cent of its share capital at face value, for an amount not exceeding Rs 20 crore, to be infused in tranches," a separate regulatory filing said.