25 Jun , 2025 By : Debdeep Gupta
Shares of Indian Hotels Company Limited (IHCL) rose 3 percent to Rs 786 in morning trade on Wednesday, June 25, after JPMorgan initiated coverage on the stock with an overweight rating on strong growth prospects.
The international brokerage has set a target price of Rs 890, suggesting an upside potential of 16.5 percent from the last close of Rs 764 on the NSE. The brokerage is betting on a sharp turnaround for the stock, which has slipped 13 percent so far in 2025, calling the underperformance temporary.
The firm sees multiple tailwinds driving a recovery. These include stronger-than-expected RevPAR (Revenue per Available Room) growth in the current fiscal, a potential upward revision in consensus EPS estimates—especially after the recent impact of geopolitical tensions including the India-Pakistan border flare-up and Operation Sindoor—and robust Q1 performance aided by a low base and encouraging early trends in room demand.
JPMorgan believes Indian Hotels could achieve its FY30 targets ahead of schedule. The company’s Return on Capital Employed is projected to cross 19 percent by FY28, supported by a rising share of capital-light business and a significant jump in managed hotel keys.
Revenue is expected to grow at a mid-teens CAGR between FY25 and FY28, with EBITDA margins expanding by over 100 basis points to more than 36 percent by FY28, the brokerage noted.
Last week, Jefferies maintained its buy rating as analysts said that long-term targets remain intact, with Indian Hotels aiming to double its portfolio and consolidated revenues by FY30. The company is also expanding new and reimagined businesses while targeting an asset-light model with 75 percent of the portfolio.
The company reported a strong performance in the January-March quarter of 2025 (Q4FY25), with revenue rising 27.3 percent year-on-year (YoY) to Rs 2,425 crore from Rs 1,905 crore. earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 29.9 percent to Rs 857 crore, while margins expanded slightly to 35.3 percent from 34.6 percent. Profit after tax (PAT) increased by 28.4 percent to Rs 563 crore compared to Rs 438 crore in the same quarter last year.
At 10 am, shares of the company were trading at Rs 783, higher by 2.5 percent from the last close on the NSE. IHCL share price is down 11 percent since the beginning of the year.
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