Indian Hotels Company shares surged over 5% on October 22, trading at ₹782 apiece following the release of strong Q2 FY27 results. The positive market response was driven by brokerages retaining 'Buy' ratings and projecting significant upside potential. As per The Financial Express, Jefferies has a target price of ₹900, implying 15% upside, while Motilal Oswal maintains a target price of ₹870, implying over 11% upside. The stock has risen 19.4% in the last six months and 6.7% this year, with the stock touching a year's low of ₹565 per unit on April 2, 2026. The positive market response was driven by brokerages raising earnings estimates and target prices following the company's robust financial performance.
Indian Hotels Company delivered robust financial performance in the September quarter, with consolidated net profit rising 19.5% year-on-year to ₹380 crore compared with the previous year. According to The Financial Express, the company reported revenue from operations rose 22% to ₹2,484 crore from ₹2,041 crore a year ago. The Tata Group company achieved the eighteenth consecutive record quarter, marking a significant milestone in its operational excellence. The company's EBITDA increased nearly 24% to ₹706 crore, though EBITDA margin contracted to 19.95% from 27.9% a year earlier, indicating some margin pressure despite strong absolute growth.
The company's EBITDA grew 23.9% YoY with EBITDA margin at 30.7% in Q2, indicating strong operational efficiency despite the margin contraction noted in the latest results. According to The Financial Express, the earnings before interest, tax, depreciation and amortisation (EBITDA) saw significant growth, with the company maintaining over ₹4,369 crore of free cash flow available for deployment, even after putting in a record capex of ₹500 crore in the first half of FY27. The strong performance was driven by robust domestic demand, marquee events in Delhi and improved performance of renovated assets in key markets, as noted by 360 One Capital. The company's revenue per available room (RevPAR) increased 25% from domestic same store hotels, contributing significantly to the overall profitability.
The company has raised its FY27 revenue growth guidance by 300 basis points to 15-17% from 12-14%, driven by 17-19% growth in hotel segment revenue, seasonally strong upcoming quarters, robust demand for social and MICE events, and non-like-for-like growth. According to The Financial Express, Jefferies raised its FY27 EBITDA/EPS estimate by 1.2-1.5% and Nomura raised FY27 RevPAR growth to 15% from 10%. The brokerages expect standalone revenue growth of 14% CAGR over FY26 to FY28 and EBITDA and adjusted profit after tax to rise 15% and 19% CAGR respectively over the same period. As per The Financial Express, Jefferies expects the opportunity in social MICE to remain significant in next year, with 95 wedding dates in CY27 versus a typical 60-65, providing a sustained demand tailwind.
Building on its strong performance, IHCL is achieving its 700-hotel milestone ahead of its 2030 target, with the company set to reach this milestone in FY27 itself. The company has signed 47 hotels in the first half of FY27, reaching a portfolio of 670 hotels with a pipeline of 280 hotels totaling more than 32,000 rooms. According to The Financial Express, IHCL targets to open 50 new hotels in FY27, including 30 in the second half of the year, with its pipeline remaining capital-light, with 94% of hotels under this model and 81% under management contracts. The company maintains an industry-leading pipeline of 280 hotels totalling more than 32,000 rooms, with 390 operational hotels, the company is on track to crossing the 400-hotel milestone in the third quarter of this fiscal. As per Goldman Sachs, the company is likely to provide detailed long-term guidance for hotel additions in November, with the earlier guidance of 700 portfolio hotels by FY30 being completed well ahead of schedule.
The company maintains a strong financial position with over ₹4,369 crore of free cash flow available for deployment, even after putting in a record capex of ₹500 crore in the first half of FY27. During the quarter, IHCL recorded strong segment-wise performance with room revenue growing 22% YoY to ₹1,115 crore, food and beverages segment growing 20% YoY to ₹686 crore, and revenue from management fees rising 25% YoY to ₹156 crore. The growth in the standalone business was led by room revenue (RevPAR up 28% YoY, led by ARR/OR growth of 19%/700bp), followed by F&B revenue (up 20%), other services (up 49%), and management fees (up 16%). As per The Financial Express, of the 31 analysts who have coverage on the IHCL stock, 25 have a 'buy' rating and five have a 'hold' rating. The company witnessed strong growth in revenue per available room (RevPAR) across all brands, with Taj brand's RevPAR surging 28% YoY to ₹14,500, followed by IHCL's domestic hotel brands whose RevPAR rose 25% YoY to ₹8,220.
