Jefferies initiated coverage on ITC Hotels, predicting a potential 63% upside to Rs 280 per share in a bull case scenario. The brokerage expects further growth in travel and tourism to boost ITC Hotels’ prospects over FY24-FY27. ITC Hotels, a strong player in the hotel space, is poised to benefit from a sector recovery. Jefferies issued a ‘buy’ rating with a target price of Rs 240 per share, indicating a 40% upside in its base case scenario.
Jefferies estimates a 15% CAGR in revenue for ITC Hotels over FY24-27, with life-for-like hotels revenue growing at 11%. The firm has steadily grown its portfolio, adding hotels through both organic and inorganic routes. ITC Hotels has 25 owned hotels, including ITC brand hotels, WelcomHotels, and Fortune. The firm’s recent projects have temporarily depressed returns, but it is ramping up keys via management contracts. ITC Hotels aims to increase its room count from 13,000 to 18,000 by 2029/30, with premium hotel keys constituting 42% of the managed portfolio. Jefferies expects travel and tourism demand to sustain over FY24-FY27, driving steady growth for the firm.
