JPMorgan Is 'Overweight' On Indian Hotels Company Despite A Target Cut — Here's Why

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&ndash;FY28 earnings forecasts by 1&ndash;3% ahead of the company&#039;s third-quarter results. It has also lowered the valuation multiple for Indian Hotels&#039; standalone business to 30x EV/EBITDA, around 10% below the stock&#039;s 10-year average and down from 33.5x previously.Despite the downgrade, the brokerage remains constructive on the stock, pointing to Indian Hotels&#039; scale, balance sheet strength and favourable industry dynamics.Kaynes Tech: JP Morgan Cautions Investors After Kotak&#039;s Critical ReportScale, Pipeline and Balance SheetIndian Hotels remains the largest listed play on India&#039;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&#039; growth trajectory.Earnings Momentum IntactJPMorgan 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.&ldquo;Being the largest by revenue and volume share positions the company well to outperform peers even as growth normalises,&rdquo; 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.Indian Hotels Secures BMC Approval For Upcoming Hotel &#039;Taj Bandstand&#039;

JPMorgan Is 'Overweight' On Indian Hotels Company Despite A Target Cut — Here's Why

Despite the downgrade, the brokerage remains constructive on the stock, pointing to Indian Hotels’ scale, balance sheet strength and favourable industry dynamics.

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