Archive · 15 Jan 2026
Nomura Initiates Coverage on ITC Hotels with Buy Rating
Nomura, a foreign brokerage, has started watching ITC Hotels and thinks it's a good stock to buy.
They believe the stock could go up to Rs 230, which is 20% higher than its current price.
Nomura likes ITC Hotels because they think the company can make more money from each hotel room and improve how full their hotels are.
They also think ITC Hotels can make more money by managing more hotels without owning them.
Nomura expects the company to grow its revenue and profits over the next few years.
They also think ITC Hotels can make money from a place called Sapphire Residences starting from the fourth quarter of the next financial year.
However, Nomura warns that if hotel room prices don't go up as expected or if the company doesn't open as many new hotels, these could be risks for ITC Hotels.
Additionally, ITC Hotels' revenue is highly concentrated in a few key urban hubs, making it vulnerable to regional disruptions.
Nomura initiated coverage on ITC Hotels with a 'Buy' rating and a target price of Rs 230, implying 20% upside.
The brokerage is positive on the stock due to expected high single-digit revenue per available room growth and improved occupancy at recently opened operational assets.
Nomura expects consolidated revenue and Ebitda to grow at compound annual growth rates of 15% and 18%, respectively, over FY25 to FY28.
ITC Hotels is projected to generate annual cash flows of Rs 800-Rs 1,000 crore over FY25 to FY28, allowing focus on inorganic growth opportunities.
Nomura flagged risks including slower-than-expected average daily rate growth, weaker-than-expected expansion of the hotel portfolio, and geographical concentration of revenue.
- Who
- Nomura
- What
- Initiated coverage on ITC Hotels with a 'Buy' rating and a target price of Rs 230
- When
- Wednesday
- Where
- Not specified
- Why
- Positive outlook driven by high single-digit revenue per available room growth and improved occupancy at recently opened operational assets
Optimistic View
Pessimistic View
Growth Potential
Optimistic View
Nomura expects high single-digit revenue per available room growth and improved occupancy at recently opened operational assets.
Pessimistic View
Slower-than-expected portfolio expansion and ADR growth could negatively impact revenue and margin targets.
Geographical Concentration
Optimistic View
Not mentioned in the optimistic view.
Pessimistic View
ITC Hotels' revenue is highly concentrated in a few key urban hubs, making it vulnerable to regional disruptions.
- Brokerage
- Nomura
- Rating
- Buy
- Target Price
- Rs 230
- Current Stock Price
- Rs 192.30
- Projected Revenue Growth (FY25-FY28)
- 15% CAGR
- Projected Ebitda Growth (FY25-FY28)
- 18% CAGR
- Operational Hotels
- 146
- Hotel Keys
- 13,500
- Pipeline Hotels
- 61
- Pipeline Keys
- 5,900
- Expected Annual Cash Flow (FY25-FY28)
- Rs 800-1,000 crore
- Expected ROIC by FY28
- 11-12%
- Current ROIC (FY24)
- 8-9%
- Management Fee Route
- Over 90% of new 5,900-key pipeline
- Goal for Managed Keys by 2030
- 70%
