Indian Hotels Company Ltd (IHCL) delivered exceptional Q2-FY27 results, with consolidated revenue reaching ₹2,484 crore, up 22% year-on-year, topping analyst estimates by a wide margin. According to reports from Business Standard, the hotel segment was the primary driver of this strong performance, with consolidated operating profit growing 24% and margins expanding by 50 basis points YoY to 28.4%. The company's diversified revenue streams and rapidly expanding select-service portfolio are positioned to drive sustained, double-digit earnings growth and cash generation.
The hotel segment's exceptional performance was underpinned by robust operational metrics, with Domestic RevPAR recording a remarkable 27% YoY growth, driven by a 700-basis-point expansion in occupancy from 75% to 82% and 17% growth in average room rates. As reported by Business Standard, this growth was supported by strong demand from large MICE events including the BRICS Summit, revenue and occupancy boosts from renovations at marquee hotels, and a 16% YoY growth in management fees. The strong rise in room rates was largely attributed to robust demand, major events, and property upgrades that led to stronger pricing power.
Reflecting sustained momentum, IHCL management upgraded its full-year FY27 revenue growth guidance to 15-17% (and 17-19% for the hotel segment). According to Business Standard, this upgrade factors in ongoing ARR expansion and market share gains in top-tier cities, with revenue growth visibility in the seasonally strong quarters of H2FY27. Management remains highly confident about H2FY27, supported by a strong domestic consumption cycle, a packed schedule of MICE/corporate events, and 30 planned new hotel openings. The company's diversified revenue streams and rapidly expanding select-service portfolio are well-positioned to capitalize on these growth opportunities.
Following the robust earnings performance, multiple brokerages have maintained positive ratings with significant target price revisions. Elara Research has upgraded its target price from ₹786 to ₹922, while 360 ONE Capital Research maintains a 'buy' rating with a revised target price of ₹920, up from ₹880. Motilal Oswal Research expects the strong momentum to continue with a 'buy' rating and target price of ₹870. The positive outlook is supported by a robust hotel pipeline with 6,650 rooms in owned and 28,150 rooms in managed hotels, strategic acquisitions, and increasing MICE activities in India. While the airline catering business TajSATS faces temporary softness due to West Asia disruptions, the company's diversified portfolio and strong domestic hospitality fundamentals remain supportive of medium-term growth.
