1 week ago
IHCL vs ITC Hotels: Who Wins India’s Travel Boom?
India’s hotel business is growing because more people in India are traveling.
Domestic trips, pilgrimages, weekend drives, and other stays are helping hotels earn more money.
Hotel room revenue rose 18% compared with last July.
IHCL, which owns the Taj Hotels business, has delivered many strong quarters and is preferred by Jefferies.
ITC Hotels also grew strongly and increased its profit by 35% in the latest quarter.
However, its share price has fallen more sharply than IHCL’s.
ITC Hotels is cheaper based on its reported price-to-earnings ratio.
Investors must decide whether they prefer IHCL’s stronger momentum or ITC Hotels’ lower valuation, and should conduct their own research.
India’s hotel sector recorded 18% year-on-year RevPAR growth in July, supported mainly by domestic travel demand.
IHCL reported Q1FY27 revenue growth of 14.6%, profit growth of 20.7%, and a 31.1% EBITDA margin.
ITC Hotels posted Q1FY27 revenue growth of 14.8%, profit growth of 35%, and a 31.2% EBITDA margin.
IHCL shares have outperformed ITC Hotels recently, while ITC Hotels trades at a lower reported P/E ratio of 17.07.
Jefferies remains constructive on hotels and ranks IHCL ahead of ITC Hotels and Chalet Hotels.
- Who
- Indian Hotels Company (IHCL), ITC Hotels, and Jefferies are the principal companies and analyst cited.
- What
- India’s domestic travel boom is strengthening hotel demand, while investors compare IHCL and ITC Hotels’ growth, share performance, and valuations.
- Where
- The trend is in India, with leisure markets such as Goa and Rajasthan and premium hotels in New Delhi highlighted.
- When
- The comparison covers July performance, Q1FY27 results, FY26 business figures, and the BRICS Summit scheduled for September 12–13.
- Why
- Domestic travel demand is offsetting weaker foreign tourist arrivals, while upcoming events may increase premium-hotel bookings and spending.
IHCL: Stronger momentum and scale
ITC Hotels: Lower valuation and recovery potential
Operating performance
IHCL: Stronger momentum and scale
IHCL delivered its 17th consecutive record quarter, with Q1FY27 revenue up 14.6%, profit up 20.7%, and EBITDA up 18%.
ITC Hotels: Lower valuation and recovery potential
ITC Hotels’ Q1FY27 profit rose faster, increasing 35%, while revenue grew 14.8% and EBITDA increased 19.5%.
Stock performance
IHCL: Stronger momentum and scale
IHCL gained about 8% over six months and is trading closer to its 52-week high, despite an approximately 8% one-year decline.
ITC Hotels: Lower valuation and recovery potential
ITC Hotels has declined about 9% in six months, 34% over one year, and 26% in 2026, indicating weaker market performance.
Valuation and analyst preference
IHCL: Stronger momentum and scale
Jefferies prefers IHCL first among the covered hotel stocks, reflecting its view of stronger sector positioning and demand momentum.
ITC Hotels: Lower valuation and recovery potential
ITC Hotels trades at a reported P/E of 17.07 versus IHCL’s 48.25, which may appeal to investors prioritizing a lower valuation.
Key facts
- July RevPAR growth
- Up 18% year-on-year, described as the fastest pace of the fiscal year.
- IHCL Q1FY27 revenue
- Rs 2,339 crore, up 14.6% year-on-year.
- ITC Hotels Q1FY27 revenue
- Rs 936 crore, up 14.8% year-on-year.
- IHCL Q1FY27 net profit
- Rs 357.9 crore, up 20.7% year-on-year.
- ITC Hotels Q1FY27 net profit
- Rs 180.25 crore attributable to owners, up 35% year-on-year.
- Reported P/E ratios
- IHCL: 48.25; ITC Hotels: 17.07.
- Jefferies ranking
- IHCL ahead of ITC Hotels, followed by Chalet Hotels.
Quotes
Jefferies
Global brokerage house providing analysis of hotel-sector demand and stocks.
“Strong domestic travel demand continued to offset the impact of weaker foreign tourist arrivals.”
financialexpress.com
“We remain constructive on the hotel sector, with robust demand momentum continuing.”
financialexpress.com
Sources
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