Buy ITCHOTEL; target of Rs 210: Choice Institutional Equities

Choice Institutional Equities's report on ITCHOTEL ITCHOTEL delivered a robust operating performance in Q2FY27, with RevPAR growing 21% YoY to INR 9,700. This was driven by a sharp 520 bps YoY rise in occupancy to 76.0% and 13.3% YoY ARR growth to INR 12,800. Room revenue grew 22% YoY, outpacing F&B (+12% YoY), while the management fee income rose 25% YoY. Excluding Branded Residences, revenue increased 17% YoY to INR 9.8 Bn, while operating leverage and 'cost efficiency' expanded EBITDA margin by 274 bps YoY to 32.0%. ITCHOTEL continued to outperform average industry RevPAR by 44%. We believe sustained pricing power, stabilisation of newly-added assets and rising fee income will support earnings momentum.

Outlook Q2FY27 performance, sustained RevPAR momentum and operating leverage-led margin gains. We value the company at 22x FY28E Hospitality EBITDA of INR 18.4 Bn, retaining our TP of INR 210. Our DCF-derived valuation reaffirms our target price, providing a sanity check. Hence, we retain our 'BUY' rating on ITCHOTEL, implying an upside of 28.6%. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.