Key Points:
- ITC Hotels reported a 9% rise in Q3 net profit to Rs 235 crore, driven by higher room rates and occupancy.
- The company is expanding via an asset-light model, with new properties in key destinations.
- Its Sri Lanka hotel turned EBITDA positive, boosting overall profitability.
JM Financial on Tuesday said ITC Hotels posted a steady operating performance in the December quarter, driven by strong room metrics, resilient demand and improving profitability, and reiterated a Buy rating with a March 2027 target price of Rs 235
The domestic brokerage said the hotel chain’s third-quarter results were broadly in line with expectations, supported by higher average room rates, improved occupancy and healthy revenue growth across its consolidated portfolio.
JM Financial said ITC Hotels recorded a nine percent year-on-year increase in average room rates during the quarter, alongside a 290-basis-point expansion in occupancy. These factors led to a thirteen percent rise in revenue per available room at the consolidated level.
“Performance in the December quarter reflects healthy demand across segments and continued strength in pricing,” JM Financial said in a research note. “Room metrics remain supportive of margin expansion.”
The brokerage highlighted that ITC Ratnadipa, the company’s Sri Lanka property, maintained its market leadership position in terms of revenue per available room. The asset turned EBITDA positive on a nine-month FY26 basis, marking a key improvement in overseas operations.
JM Financial said the turnaround at the Sri Lanka asset enhances overall profitability and strengthens the investment case, particularly as international travel and events demand stabilizes.
Profit Growth, Revenue Gains Support Valuation
For the December quarter, ITC Hotels reported a nine percent increase in consolidated net profit to Rs 235 crore, compared with Rs 215 crore a year earlier. Consolidated revenue rose twenty-one percent year on year to Rs 1,231 crore, up from Rs 1,015 crore in the same period last year.
JM Financial said the earnings growth was underpinned by operating leverage and improved cost efficiencies, alongside higher room yields.
“Going forward, we expect ITC Hotels to report eleven percent and fourteen percent compound annual growth in revenue and EBITDA over FY25 to FY28,” the brokerage said. “This will be aided by steady growth in average daily rates and the continued ramp-up of the Sri Lanka asset.”
The brokerage said it values the stock at twenty-five times enterprise value to EBITDA based on March 2028 estimates and maintained its Buy recommendation with a target price of Rs 235.
An ITC Hotels spokesperson said the company remains focused on disciplined growth and margin improvement. “Our strategy emphasizes asset-light expansion, operational efficiency and strengthening our presence in high-growth markets,” the spokesperson said.
Expansion Strategy Focuses on Asset-Light Model
JM Financial said ITC Hotels currently operates a portfolio of 213 hotels, with 152 properties operational and sixty-one in the development pipeline. The company continues to pursue an asset-light strategy by partnering with property owners, particularly in Tier Two and Tier Three cities.
During the December quarter, ITC Hotels opened new properties in Bodh Gaya, Rishikesh, Siliguri, Sirmaur, Dungarpur and Jaipur, expanding its footprint across key leisure and pilgrimage destinations.
In a significant development, India International Convention and Exhibition Centre Ltd. allotted a zero point nine acre land parcel at Yashobhumi in Dwarka, New Delhi, to ITC Hotels on a ninety-one-year lease. The site will be used to develop a premium five-star hotel, with construction expected to be completed by 2030.
JM Financial said the addition improves visibility into the company’s owned asset portfolio, which now includes four upcoming properties. While managed hotels remain central to the growth strategy, the brokerage noted that selective ownership enhances long-term value and brand positioning.
“The Dwarka project strengthens the owned portfolio and complements the managed pipeline,” JM Financial said. “It provides long-term earnings visibility and supports premium brand expansion.”
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