- JPMorgan cut Indian Hotels' 2026 price target to Rs 805 but kept Overweight rating
- Earnings forecasts for FY26-FY28 trimmed by 1-3% before Q3 results
- Indian Hotels has 27,000 rooms and a similar asset-light development pipeline
JPMorgan has lowered its price target on Indian Hotels Ltd while retaining an Overweight rating, signalling near-term moderation but continued confidence in the long-term hospitality cycle.
In an update, the brokerage has cut its September 2026 price target to Rs 805 from Rs 890, citing weaker-than-expected performance in the first half of FY26 and a broader de-rating in valuations across the sector. The revised target still implies a potential upside of around 12.5% from current levels.
JPMorgan said it has trimmed its FY26–FY28 earnings forecasts by 1–3% ahead of the company's third-quarter results. It has also lowered the valuation multiple for Indian Hotels' standalone business to 30x EV/EBITDA, around 10% below the stock's 10-year average and down from 33.5x previously.
Despite the downgrade, the brokerage remains constructive on the stock, pointing to Indian Hotels' scale, balance sheet strength and favourable industry dynamics.
Scale, Pipeline and Balance Sheet
Indian Hotels remains the largest listed play on India's hospitality sector, with an inventory of around 27,000 rooms and a development pipeline of similar size, JPMorgan noted. Crucially, most new additions are asset-light, supporting return ratios and cash generation.
The brokerage expects the company to remain net debt-free going forward, a key differentiator at a time when capital discipline is increasingly valued by investors.
Low supply growth across the hotel industry, combined with steady demand, continues to support the medium-term outlook. JPMorgan highlighted domestic tourism, rising MICE demand and improving international operations as structural tailwinds for Indian Hotels' growth trajectory.
Earnings Momentum Intact
JPMorgan does expect some moderation in RevPAR growth after a strong run, reflecting a more normalised demand environment. However, it believes earnings upgrades should continue, supported by operating leverage, scale benefits and better-than-peer execution.
“Being the largest by revenue and volume share positions the company well to outperform peers even as growth normalises,” the brokerage said.
The revised price target is based on a sum-of-the-parts valuation, with the domestic business valued at a discount to historical averages. JPMorgan said this re-rating already factors in softer near-term trends, while leaving room for upside as earnings visibility improves.
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