Latest news with #IndianHotels
Mint
5 days ago
- Business
- Mint
ITC Hotels soared 30% from its low. Is it still a hidden gem?
Why are hotel stocks in India riding a wave of success? The answer isn't too complicated. The Indian economy is thriving. People have more money to spend. Travel within the country keeps growing, and global tourism is bouncing back stronger than ever. These shifts have boosted the hospitality industry, pushing up bookings and earnings for hotel chains. Let's dive into ITC Hotels today. It is a big name in India's hospitality space, belonging to ITC Ltd, a large and varied business group. Its portfolio includes upscale hotels, resorts, and homestays under different brands. These offerings serve a wide range of travellers with a focus on top-notch experiences. The stock price of ITC Hotels has jumped. From its lowest point in February 2025, the stock rose by an impressive 30%. That's a steep increase in a short time. This raises an important question: Do investors still see a good balance between risk and reward with ITC Hotels? The answer isn't straightforward. ITC Hotels is a new listing, and it doesn't have much of a track record for earnings yet. This makes it hard to use the usual method of analysing its past financial data. How do we handle this? Well, we shift our focus to one of its closest competitors. Indian Hotels Company Ltd, or IHCL, which owns Taj Hotels, Resorts, and Palaces, becomes the natural choice to study. Indian Hotels has a long financial history, giving us plenty of data to study. But here's the catch. Can hotel stocks be judged just by looking at their price-to-earnings or PE ratio? We don't think so. Hotel profits swing. A pandemic economic slowdown, or even a local event can throw their yearly profits off balance. This makes figuring out the reliable earning potential of a hotel stock through the PE ratio quite tricky. So, what's a better way to value them? The usual practice for hotel properties is to focus on the worth of their assets instead. Indian Hotels has had an average price to book (PB) multiple of 5.6 times in the past decade. This raises a key question. Is using book value the best way to evaluate hotel stocks? To answer that, let's think about a basic comparison. Picture a ten-year-old car. Now, picture a ten-year-old thriving hotel property. What's the key distinction here? Cars lose their worth over time. A car bought for ₹15 lakhs, for example, might drop 90% in value over ten years. After that period, its market worth could fall to just ₹1.5 lakhs. Account books would show that decline as depreciation. Running a successful hotel is a whole different game. A hotel purchased at ₹15 crores might be valued at ₹50 crores after ten years. Its rise in value depends on location, brand popularity, and steady income flow. Here's a strange thing about accounting: Even when an asset gains value, it is often recorded in the books as if it lost value. Take this example. A property purchased for ₹15 crores might grow to be worth ₹50 crores in ten years, yet the books might still list it as being worth ₹5 crores. Let's understand this. A property bought for ₹15 crores might now be worth ₹50 crores in the market, but accounting records reduce its value to ₹5 crores due to depreciation policies. This is likely the reason high-quality hotel stocks often sell at rates far above their book value. Investors know the book value doesn't show what these properties are worth on the market. For instance, a property listed at ₹5 crores on paper might fetch ten times that in the real world because accounting rules show the depreciated value and not the current market price. On top of that, well-known hotel chains benefit from brand recognition and customer loyalty, which drives their worth even higher. Hotel stocks often show much higher prices compared to what their assets are worth on paper. In favourable times, this difference can climb up to ten times the book value. During tough periods, it can drop as low as double the book value. Take the coronavirus crash as an example. Back then, Indian Hotels' price-to-book value dropped to 2 times. Its stock hovered around ₹70 at that time. Now, it has crossed ₹750, offering eleven times the return in just five years. This highlights how undervalued stocks in this sector can grow. Over an entire market cycle, investors have paid about 5.6 times the book value to invest in Indian Hotels. On the other hand, EIH, or East India Hotels, which runs the Oberoi and Trident brands, has had a price to book ratio (PB ratio) of just three times over the past decade. This means Indian Hotels, a large and varied hotel chain holds a PB of 5.6 times. Meanwhile, EIH, a smaller, more high-end and luxury-focused brand, stands at three times. Where does ITC Hotels belong on this spectrum? Should it align more with Indian Hotels or lean toward EIH? ITC Hotels ranks as the second-largest chain after Indian Hotels and covers a wider range of offerings compared to EIH. This suggests to me that its valuations should be nearer to Indian Hotels than EIH. This places it around a PB multiple of between 3 and 5.6. Taking the average of these figures gives us a PB multiple of 4.5. If you multiply the current book value of ITC Hotels with this figure, you get around ₹225 per share. ITC Hotels at present trades close to ₹220 per share. This means it is at a small discount for an investor who thinks its price-to-book ratio should be somewhere between Indian Hotels and EIH. Now some might argue it deserves a higher PB ratio if there's confidence in a brighter future for ITC Hotels compared to its past. Take Indian Hotels as an example. Its current PB ratio is 10 times, which stands way above its long-term average of 5.6 times. Could we think of something similar with ITC Hotels? Maybe we can use a multiple like 8 times instead of the 4.5 times we calculated earlier? If you value a conservative investing approach, avoid paying heavy premiums just to bet on future growth. Instead, value a business closer to its ten-year average multiple. We hope this breakdown helps you in taking an informed decision about ITC Hotels. Happy Investing. Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. This article is syndicated from
Hospitality Net
30-05-2025
- Business
- Hospitality Net
HVS ANAROCK MONITOR, May 2025
Read the latest edition of the HVS ANAROCK monthly industry update, MONITOR (Monthly Overview of National Industry Trends and Hospitality Report), for the key trends in the Indian hospitality industry. Key highlights include: May 2025: In April 2025, the Indian hotel sector continued to post strong year-on-year growth across all major performance indicators. Occupancy rate saw a marginal uptick over March 2025, even as average rates softened during the same period. Mumbai (79–81%) and New Delhi (78–80%) registered the highest occupancy levels during the month, reaffirming their position as the country's top-performing hotel markets. Mumbai and New Delhi recorded the highest average rates during the month, exceeding ₹11,500 and ₹10,500, respectively. Dipti Mohan Senior Manager - Research HVS View source
Skift
21-05-2025
- Business
- Skift
Indian Hotel Industry to Reach $13 Billion by 2027: What's Driving This Growth
Domestic and inbound tourism, along with a growing MICE segment, are the Indian hotel industry's biggest bets, as demand continues to outpace supply. The Indian hotel sector is expected to cross INR 1 trillion ($11.7 billion) by the end of the current financial year and touch INR 1.1 trillion ($13 billion) by 2026-27, according to risk management and monitoring platform Rubix Data Sciences. This figure stood at INR 820 billion ($9.6 billion) at the end of the 2024 fiscal year. In its recent industry report, the firm projected that the country's hospitality sector will grow 10.5% annually till March 2027. Three key factors are expected to drive this growth: domestic travelers, foreign arrivals, and MICE (meetings, incentives, conferences, and exhibitions) segment. Rubix estimates that domestic travelers will contribute 50% of the incremental growth in revenue, while foreign tourists are projected to account for a 30% revenue share. The MICE segment is expected to account for the remaining 20% increase in revenue, the report said. 'These drivers are expected to remain sustainable over the next three years and will significantly fuel the sector's expansion,' it said. On foreign tourist arrivals (FTAs), the report said that there was a positive correlation between foreign tourists and the average daily rates (ADRs) in the premium hotel segment. 'For businesses like Chalet Hotels, which derive 35%-40% of their revenue from foreign guests, FTAs are a key driver of ADR performance. Foreign tourists, with higher spending power and a preference for luxury services, are vital contributors to the demand for premium rooms.' It added that by 2028, foreign tourist arrivals in India are expected to reach nearly 30.5 million, up from 9.6 million in 2024. However, India is still struggling with low inbound numbers exacerbated by a low global tourism promotion budget. Growing Occupancy: According to the report, the occupancy rates of hotels is expected to reach 73% by 2026-27, up from 68% in 2024 financial year and the all-time low of 35% during the pandemic. This is expected as demand is projected to continue outstripping supply. 'Demand is projected to grow at a 10.5% annual rate, while supply is expected to increase by only 8% annually. This supply-demand imbalance is likely to reduce vacancy rates and drive higher occupancy levels, as hotels face increased pressure to meet the rising demand,' it said. This higher demand is driving more hotel companies into India. In April, six international hotel brands announced deals in India within a span of four days. Singapore-based The Ascott Limited announced its expansion plans with a focus on Tier-2 and 3 cities. Its Chief Operating Officer for EMEA & South Asia, Lee Ngor Houai said that there is a 'significant under-penetration of branded hotels' in smaller cities. For Accor's chairman and CEO Sébastien Bazin, India is 'one of the world's most exciting travel markets.' India also continues to be a cornerstone of Marriott International's future growth, with the company projecting that the country will become its third-largest market. Inside Radisson's Expansion Plans, Marketing Strategy Radisson Hotel Group's portfolio in India has expanded to 200 operational and developing properties. The chain has been present in the country for 26 years. Indians relate to Radisson as an Indian brand, Nikhil Sharma, managing director and chief operating officer for South Asia at Radisson Hotel Group told Skift. 'As an international brand, we are very local and nationalistic in our approach. We continue to grow because more than 50% of our portfolio is in smaller cities.' He said that over the next 5-7 years, India could go from 185,000 branded hotel rooms to 1 million operating rooms. The company is working on a program that aims to prepare its properties across the world for Indian travelers. The program, called Welcome India, is currently in the works, he said. Competition is intensifying in India as the brands present in India are increasing their inventory and more brands are entering. He said Radisson is counting on word of mouth and loyalty to help distinguish itself among an increasingly discerning customer base. Radisson is also upping its experiential offerings for sports enthusiasts, readers, and couples looking to get married soon. Indian Railways Unveils its SuperApp The Indian Railway Catering and Tourism Corporation (IRCTC) has unveiled its new mobile application SwaRail. The app is meant to be a unified platform for all railway-related services. SwaRail allows users to check their booking status, book meals, explore facilities on stations, and access tourist services. It also provides real-time train tracking service and eliminates the need for frequent logins. Last November, a report by Accenture revealed that Indians are dissatisfied with the existing travel planning options and are seeking a travel superapp. It added that travelers feel the booking process is the most complicated stage of a journey. Indian online travel agency MakeMyTrip is eventually planning to launch a travel superapp, while Skyscanner is also preparing to launch a new marketplace within its app offering a range of additional services. U.S. Imposes Restrictions on Indian Travel Agents The U.S. on Monday said it was imposing restrictions on the owners, executives, and senior officials of India-based travel agencies for knowingly facilitating illegal immigrants to the North American nation. It added that its India Mission was working 'actively' to identify and target individuals and agencies involved in facilitating illegal immigration and human smuggling operations. 'Our immigration policy aims not only to inform foreign nationals about the dangers of illegal immigration to the United States but also to hold accountable individuals who violate our laws, including facilitators of illegal immigration,' the U.S. Mission in India said in a statement. This comes just days after the U.S. warned Indian citizens against overstaying in the country. 'If you remain in the United States beyond your authorized period of stay, you could be deported and could face a permanent ban on traveling to the United States in the future,' the India mission of the U.S. said on Saturday. Delhi Airport Operator Divests in Aviation Services Company for $1.5 Million Delhi Airport operator DIAL has sold its entire 50% stake in Delhi Aviation Services (DASPL) for INR 130 million ($1.5 million). The stake has been sold to Bird Flight Services, which already held a 25% share in the company. Delhi Aviation Services was given the concession to run the operations of bridge-mounted equipment, including ground power units, pre-conditioned air units and supply of potable water to aircraft at Terminal 3 of the Delhi Airport. However, according to a regulatory filing, the company is currently not carrying any business operations. Evoke Experiences Announces New Experiential Hotels Experiential hotels company Evoke Experiences is undertaking a strategic expansion to grow its presence in the hospitality landscape. The company said Monday that the expansion would mark a shift in its operating model, which currently focused on immersive glamping retreats and cultural tent cities. Now, the company will widen its experiential properties portfolio and will look for asset leasing and management collaborations. Currently, it operates 750 keys and plans to expand this figure to 1,000 by the end of the year. It also said that while it has a property coming up in Ayodhya, the company is preparing to launch a new site in Gujarat's Gir.
Time of India
12-05-2025
- Business
- Time of India
Tensions, turmoil and a ceasefire: Tourism stocks just dodged a Pakistan bullet. Should you buy?
Geopolitical tensions between India and Pakistan initially rattled tourism stocks, causing dips in aviation, hotels, and travel services due to disrupted travel plans. However, a subsequent ceasefire has shifted market sentiment towards cautious optimism. Experts suggest a selective, long-term approach, focusing on fundamentally strong companies with a robust domestic presence like Indian Hotels and Indigo. Tired of too many ads? Remove Ads The initial shock: Market's nervous reaction Tired of too many ads? Remove Ads Ceasefire changes the game Should you buy tourism stocks now? Tired of too many ads? Remove Ads Top picks in tourism sector (Collated from different analysts) The tourism and travel-related stocks in India recently faced a wave of uncertainty, driven by geopolitical tensions between India and Pakistan. Investors reacted swiftly, as disruptions such as flight cancellations, airspace restrictions, and even the suspension of high-profile events like the IPL weighed heavily on just when the market seemed poised for a prolonged slump, the news of a ceasefire between the two nations shifted the narrative. The question now is whether tourism stocks have truly dodged a bullet and if investors should consider accumulating tensions flared between India and Pakistan, tourism stocks took an immediate hit. Aviation, hotels, and travel services companies saw a marked dip as travel plans were disrupted and cautious tourists postponed their journeys. Arpit Jain, Joint MD of Arihant Capital Markets , noted that the rising geopolitical tensions led to short-term volatility, with airport closures and event suspensions dampening Jain remains optimistic that the impact would be regional and temporary, emphasizing that long-term trends remain Jinesh Joshi from PL Capital observed that while tourism stocks might remain out of favor in the near term, the situation is fluid and believes that investors should use this phase as an opportunity to accumulate quality names selectively, mentioning Indigo and Samhi Hotels as preferred picks due to their resilient business that a ceasefire has been announced, the market is reassessing its stance on tourism-related stocks. The initial panic seems to be giving way to cautious optimism. Robin Arya, Founder of GoalFi, believes that the underlying growth drivers of Indian tourism are far more resilient than short-term geopolitical pointed out that domestic travel, cultural tourism, and government-led initiatives continue to sustain the industry. The broader tourism opportunity in India, driven by domestic consumption, remains robust despite transient short-term volatility can't be ruled out, Arya emphasizes that the structural trends driving tourism -- such as increased domestic travel, religious tourism, and a cultural revival -- remain strong. He advises investors to focus on quality names that benefit from these long-term current market scenario presents a mixed bag. On one hand, geopolitical uncertainties could cause sporadic setbacks, but the ceasefire announcement has considerably reduced the perceived risk. Investors should not completely steer clear of tourism stocks but should rather adopt a selective, long-term fundamentally strong names, particularly those with a strong domestic footprint, could prove rewarding. Stocks like Indian Hotels, Lemon Tree, and Indigo appear promising, as their revenue streams are less dependent on international companies focused on domestic travel, medical tourism , and religious tourism are well-positioned to weather the tourism stocks took a hit amid the recent geopolitical scare, the ceasefire between India and Pakistan has significantly reduced immediate risks. Market experts suggest that long-term investors could use this dip as a buying opportunity. Rather than giving in to panic, focusing on resilient stocks with robust fundamentals and a strong domestic presence might be the way believe the recent correction has created buying opportunities in select tourism stocks. Indian Hotels Company (IHCL), with its iconic Taj brand, is seen as a resilient play, benefiting from robust occupancy and strong brand recognition. Lemon Tree Hotels , focusing on the mid-market segment, is another favorite, with analysts citing its asset-light model and domestic travel focus. InterGlobe Aviation (IndiGo), the market leader in aviation, remains a strong bet due to its extensive network and cost-efficient model, while Samhi Hotels offers a high-risk, high-reward play in the premium hospitality a leading online travel platform, also stands out for its asset-light approach and profitability, even during tough also favor IRCTC for its unique position in rail tourism and digital ticketing, which is largely insulated from geopolitical risks. For those seeking a luxury play, EIH Ltd (Oberoi Hotels) is recommended for its focus on premium properties, while Wonderla Holidays is seen as a niche leisure play, benefiting from a resurgence in family travel. The focus is on quality names with strong fundamentals and diversified revenue streams.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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Business Standard
06-05-2025
- Business
- Business Standard
Rekha Jhunjhunwala portfolio stock: Indian Hotels drops 5% post Q4 results
Indian Hotels share price today Rekha Jhunjhunwala-owned stock, Indian Hotels Company, dropped as much as 5 per cent on the BSE in Tuesday's intraday trade after the hotel stock reported its March 2025 results. Indian Hotels Company share price slipped 4.9 per cent to hit an intraday low of ₹762.4 per share on the BSE. As many as 0.26 million shares have changed hands on the counter on the exchange, as against a two-week average of 0.098 million shares. Why are Indian Hotels shares down today? Indian Hotels shares fell in the stock market today after various brokerages said that the Jhunjhunwala portfolio stock has limited upside from here, given that most of the positives are priced in. Most brokerages have maintained their ratings and share price targets on Indian Hotels stock, despite the company posting strong results for Q4FY25, given the rich valuations. Indian Hotels Q4 results 2025 (Y-o-Y). This was led by growth in the Hotels segment (13 per cent Y-o-Y with 14 per cent rise in average room rate (ARR) and 15.5 per cent Revenue per available room (RevPAR)). Further, Indian Hotels posted a consolidated Ebitda and adjusted net profit growth of 30 per cent and 26 per cent Y-o-Y, respectively, at ₹860 crore and ₹520 crore. Indian Hotels' new business verticals, comprising Ginger, Qmin, and amã Stays & Trails grew 40 per cent Y-o-Y to ₹600 crore in FY25, while TajSATs posted 17 per cent Y-o-Y growth to ₹1,050 crore. Chambers reported revenue of ₹150 crore, up 25 per cent Y-o-Y. READ MORE Rekha Jhunjhunwala Portfolio Stock At the end of the March 2025 quarter, Rekha Jhunjhunwala, wife of late ace investor Rakesh Jhunjhunwala, owned 1 per cent stake in Indian Hotels Company. Indian Hotels stock analysis, price target Elara Capital sees 7% upside in Indian Hotels stock Indian Hotels has guided for ₹1,200 crore capex in FY26. Of this, 60–65 per cent will be allocated towards major renovations and digital upgrades, while the remainder will go towards greenfield developments. Moreover, the company has 15,900 keys in the managed hotel pipeline, of which 2,959 and 3,251 keys are likely to be opened in FY26 and FY27, respectively. The brokerage expects accelerated growth in management fee to continue as new hotel openings from management contract in FY26 and FY27 are tilted towards high-end brands such as Taj, SeleQtions and Vivanta. "We have reduced Indian Hotels' Ebitda estimates by 3 per cent each for FY26 and FY27 to factor in lower margin for Taj SATS, to realign our RevPAR growth assumption. We reiterate 'Accumulate' rating with a share price target of ₹861 (unchanged)," it said. Motilal Oswal maintains 'Buy' Indian Hotels has maintained its double-digit revenue guidance, supported by strong structural tailwinds in the industry, with demand consistently outpacing supply. Growth is further driven by rising Foreign Tourist Arrivals (FTAs), increased MICE activity, expanding leisure tourism, and Indian Hotels' robust development pipeline. "We expect Indian Hotels to continue its upward trajectory, with revenue/Ebitda/adjusted PAT CAGR of 16 per cent/22 per cent/22 per cent over FY25-27E. We broadly maintain our FY26/FY27 Ebitda estimates," it said with a share price target of ₹940. Nuvama Institutional Equities maintains 'Reduce' Based on the Q4 performance, the brokerage has tweaked FY26/27 revenue and Ebitda estimates by 1 per cent and 2 per cent each, respectively. The brokerage has maintained its share price target of ₹628 and a 'Reduce' rating on the stock as its valuation has "run up much ahead of earnings". YES Securities downgrades to 'Neutral' The management has maintained its revenue growth in FY26E, driven by ARR. Generally, ARR growth results in better flow through to Ebitda, compared to occupancy-led growth, which can drive margin expansion. For FY26, the management has guided for opening of 30 new properties, of which 3-4 properties will be owned. Total pipeline consists of ~19.5K keys, including ~15.9K managed keys. However, the near-term pipeline has been trimmed by ~925 keys, including ~250 owned keys, which can hamper near-term growth outlook. "We pencil in Revenue/PAT CAGR of 16 per cent/22 per cent over FY25-27E. We value Indian Hotels Company stock at a premium to peer set, at FY27E EV/Ebitda multiple of 28x. Despite these factors, upside seems limited at 4-5 per cent," it said with a downgrade to 'Neutral' and a target price of ₹835.
