Indian Hotels share price jumps over 6% to hit 1-year high. Buy, hold or sell?

Indian Hotels share price: After a softer June quarter, the Tata group's hospitality arm showed strong recovery, buoyed by wedding-driven demand in Mumbai and pent-up bookings delayed by Q1's election and weather impacts.

In Short

• IHCL shares surge 6% post-strong Q2 results beat expectations
• Robust revenue growth fueled by wedding demand, pent-up bookings
• Emkay Global sets Rs 700 target, highlights strong revenue streams

Shares of Indian Hotels Company Ltd (IHCL) surged by over 6% in early trade on Friday, driven by a robust Q2 performance that beat market expectations. At 12:17 pm, Indian Hotels share price was up 6.21% to Rs 726.05.

After a softer June quarter, the Tata group’s hospitality arm showed strong recovery, buoyed by wedding-driven demand in Mumbai and pent-up bookings delayed by Q1’s election and weather impacts.

IHCL reported a 27% rise in revenue for the September quarter, powered by healthy occupancy rates (77%) and average room rate (ARR) growth of 9% year-on-year, which pushed its revenue per available room (RevPAR) up by 12% YoY.

Operating efficiency also contributed, with EBITDA margins expanding by 270 basis points to 27.5% year-on-year.

BUY, HOLD OR SELL?

Analysts remain optimistic about IHCL’s outlook. Emkay Global noted IHCL’s diversified revenue streams, efficiency, and balance sheet strength as key growth factors, setting an “ADD” rating with a price target of Rs 700. The October growth trend and wedding bookings for the coming months could further support IHCL’s performance.

Antique Stock Broking sees strong demand continuing into H2 and revised its price target to Rs 700, up from Rs 640.

Meanwhile, HDFC Institutional Equities also highlighted IHCL’s advantage in the demand-supply mismatch in prime locations, projecting a solid RevPAR growth rate through FY27.

The brokerage upgraded IHCL’s earnings forecast for FY25 and FY26 by 7% each, maintaining a “REDUCE” rating with a target price of Rs 550.

IHCL stock has gained 22% year-to-date, reaching a high of Rs 727.75 on the BSE today. With ongoing tailwinds from the peak wedding season and rising foreign tourist arrivals, IHCL could continue to see strong demand in the quarters ahead.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)