ITC Hotels Gets 'Buy' Rating As ICICI Securities Initiates Coverage Amid Expansion Plans; Sees 21% Upside

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ICICI Securities Report

ICICI Securities initiates coverage of ITC Hotels Ltd. with a Buy rating with a target price of Rs 250, implying a 21% upside from the current market price of Rs 206, based on a 27x Dec’27E EV/Ebitda for its hotels business and a 1x NAV for its Sri Lanka residential project.

Backed by a strong net cash balance of ~Rs 17 billion, as of Mar’25, ITC Hotels is set to expand its footprint from ~13,600 operational keys, as of Sep’25, to over 20,000 operational keys by 2030 through its ‘asset-right’ strategy.

The brokerage models for a 9% RevPAR CAGR over FY25–28E, with management fees CAGR of 17% over FY25–28E led by new hotel openings. Hence, estimate a 12% revenue CAGR on a consolidated basis over FY25–28, with a 15% Ebitda CAGR over the same period, estimating Ebitda margins to rise by 300 bps over FY25–28 (100 bps annually) to 37% in FY28.

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