Archive · 22 Sep 2026
Jefferies Sees Higher Upside Potential in ITC Hotels
Jefferies compared two Indian hotel companies, ITC Hotels and Leela Hotels.
It believes hotel demand is growing faster than the number of new rooms.
This can help hotels keep rooms fuller and charge better prices.
ITC Hotels wants to add more rooms through management agreements, which require less money to build.
It plans to increase its total rooms from about 14,300 to 22,000.
Leela Hotels is planning about 1,100 new rooms, with more ownership and joint ventures.
Leela also earns money from restaurants, wellness facilities and clubs.
Jefferies believes both companies could benefit from strong domestic travel and limited hotel supply.
Jefferies assigned target prices of Rs 210 for ITC Hotels and Rs 675 for Leela Hotels.
The targets imply potential upside of about 32% for ITC Hotels and 25% for Leela Hotels.
ITC Hotels plans to expand toward 22,000 rooms, increasingly through management contracts.
Leela Hotels has an announced 1,100-room pipeline focused more on owned assets and joint ventures.
Jefferies said hotel demand is growing faster than supply, supporting occupancy, room rates and revenue.
- Who
- Jefferies, ITC Hotels and Leela Hotels.
- What
- Jefferies reviewed the two hotel companies and assigned target prices implying potential upside for both.
- When
- The report discusses targets and business plans through FY30 and FY31; the article does not provide a publication date.
- Where
- India, including hotel markets and projects in Bengaluru and Coorg.
- Why
- Hotel demand is estimated to be growing faster than supply, while both companies are expanding their room portfolios and related businesses.
Asset-Light Expansion
Ownership-Led Expansion
Room-development strategy
Asset-Light Expansion
ITC Hotels is moving toward a larger managed-room portfolio, allowing it to add rooms with less capital and earn management fees.
Ownership-Led Expansion
Leela Hotels is pursuing a more ownership-led pipeline supported by owned assets and joint ventures.
Capital and returns
Asset-Light Expansion
Jefferies said managed properties require minimal capital and can support higher margins and superior return on capital employed.
Ownership-Led Expansion
Leela Hotels is committing more directly to luxury hotel assets while targeting about Rs 20 billion in EBITDA by FY30.
Growth drivers
Asset-Light Expansion
ITC Hotels is relying on management contracts, selective ownership and demand from leisure, weddings and corporate travel.
Ownership-Led Expansion
Leela Hotels is expanding its luxury presence and emphasizing food and beverage, wellness, clubs and other non-room revenue.
- ITC Hotels target price
- Rs 210, implying about 32% potential upside.
- Leela Hotels target price
- Rs 675, implying about 25% potential upside.
- ITC Hotels current room inventory
- Approximately 14,300 rooms.
- ITC Hotels planned room inventory
- Approximately 22,000 rooms, with managed rooms expected to comprise about two-thirds of the portfolio.
- Leela Hotels announced pipeline
- Approximately 1,100 rooms, with a larger portion linked to owned assets and joint ventures.
- Estimated industry demand growth
- About 10%, compared with supply growth of approximately 9% to 9.5%.
- Leela Hotels non-room revenue
- Food and beverage contributes approximately 35% to 40% of gross revenue.