ITC Hotels: ICICI Direct targets ₹220, sees 45% upside

What changed after the Q4FY26 result

ICICI Direct Research maintained a ‘Buy’ rating on ITC Hotels after the company’s March-quarter (Q4FY26) results and revised its target price to ₹220. The brokerage cited “attractive valuations” and long-term growth prospects, even as quarterly performance was described as muted. The target implies an upside of about 45% over Tuesday’s NSE close of ₹155.84. In Wednesday’s trade, the stock slipped 1.6% to about ₹153.30 around 2 PM. The note comes at a time when investors are closely tracking demand signals for premium hospitality, especially with inbound travel volatility.

Stock’s journey since the demerger listing

ITC Hotels listed in January 2025 after the hotel business was demerged from ITC Limited. At the current market price, the stock is nearly 19% below its listing price of ₹188 on the NSE. After listing, it climbed to a record high of ₹261.62 in July 2025. It then saw heavy profit booking and fell below the listing price in December 2025, staying under pressure thereafter. The stock touched a 52-week low of ₹137.30 on March 30, 2026. In calendar year 2026 so far, it is down about 22%.

Q4FY26 numbers: profit up, costs also higher

For Q4FY26, ITC Hotels reported consolidated net profit of ₹317.43 crore, up 23.1% year-on-year from ₹257.85 crore. Revenue from operations rose to ₹1,253.70 crore from ₹1,060.62 crore a year ago. Total expenses increased to ₹895.35 crore from ₹749.81 crore in the year-ago period. The combination of higher revenues and higher costs is important because it frames how brokerages are reading operating leverage in the current demand environment.

Operating metrics: ADR up, occupancy down

ICICI Direct Research flagged mixed operating indicators for the March 2026 quarter. Average room rate (ARR) rose 5% year-on-year to ₹15,500 per night. Occupancy, however, declined by about 160-170 basis points to 74%, which the brokerage linked to the impact of the West Asia crisis. Revenue per available room (RevPAR) still grew 3% year-on-year to ₹11,700. The numbers reflect pricing holding up better than volumes, at least during the quarter referenced.

Geopolitical pressure and the near-term demand view

Separately, analysts commenting after the Q4 print said West Asia tensions impacted inbound travel, particularly across South India markets. In that context, Q1 is being positioned as a quarter of recovery by some brokerages, while management commentary referenced by analysts points to a stronger second half. ICICI Securities noted June is expected to be a quarter of recovery and said the company is confident of a demand bounce-back in the second half of the ongoing financial year.

Zuri Hotels acquisition: ₹205 crore enterprise value

ITC Hotels announced it will acquire Zuri Hotels and Resorts for an enterprise value of ₹205 crore. ICICI Direct Research said the acquisition should strengthen ITC Hotels’ presence in the luxury leisure and wellness segment, supporting revenue growth and margin expansion in the coming years. The property is spread across 18 acres with 72 rooms, and is expected to be repositioned under the luxury ITC Hotels brand after renovation. The deal is being read by analysts as consistent with the company’s broader expansion and brand positioning strategy.

Cash, capex plans, and valuation multiples cited by ICICI Direct

ICICI Direct Research pointed to ITC Hotels’ strong cash position as a growth enabler. Cash and cash equivalents stood at ₹1,600 crore in FY26, according to the brokerage. Management has set a target of about 8-10% of revenues for capital investments such as renovations and greenfield projects, the note said. The brokerage added that the company continues to add strategic land bank for future greenfield projects while also evaluating inorganic opportunities such as M&A. It also said the stock trades at 18x and 15x its FY27E and FY28E EV/Ebitda, respectively.

Dividend update and portfolio expansion targets

Along with Q4 results, the board declared ITC Hotels’ first-ever dividend since the demerger. The company recommended a final dividend of ₹1 per share for FY26, with May 21 as the record date. ITC Hotels, established in 1975, described itself as the second largest hotel company in India and said it recorded its highest-ever signings during FY26, adding 33 hotels with over 3,300 keys. Aligned to its ‘Asset-Right’ strategy, it aims to scale to 250 operational hotels with more than 22,000 keys by 2031.

What other brokerages are saying on targets

Post Q4 results, a set of brokerages published targets in the range of ₹190-229, with a consensus target reported at ₹207.87. Ambit Capital suggested ‘Buy’ with a target of ₹225, Jefferies pegged value at ₹205, and Axis Capital and PhillipCapital suggested targets of ₹217 and ₹200, respectively. Choice Institutional Equities cut its FY27 revenue estimate by 7.8% and expects Ebitda margin to contract 157 bps, while maintaining ‘Buy’ with a target of ₹190. Nomura said Q4 results were in-line but ADR growth of 5% year-on-year was below its expectation of 8%, and it lowered its target price to ₹195. Elara Securities maintained ‘Buy’ with a target of ₹197, and JM Financial suggested ₹225.

Key numbers at a glance

Analysis: why the valuation debate is central now

The ICICI Direct call is anchored on valuation comfort at a time when travel sentiment has been affected by geopolitical developments, according to broker commentary in the reports cited. The Q4 operating picture shows modest pricing improvement, but occupancy softness, suggesting demand disruptions have been more visible in volumes than in rates. The acquisition of Zuri Hotels and Resorts adds a clear expansion lever in luxury leisure and wellness, with a defined asset profile of 18 acres and 72 rooms. Meanwhile, the stated capex intent of allocating about 8-10% of revenues to renovations and greenfield projects, backed by FY26 cash and cash equivalents of ₹1,600 crore, provides a framework investors can track across quarters.

Conclusion

ICICI Direct’s ₹220 target and ‘Buy’ rating place the focus on whether near-term travel headwinds ease and whether room metrics recover from the March-quarter softness. Investors also have defined near-term milestones in the form of the May 21 dividend record date and updates on the Zuri Hotels repositioning after renovation. Broker targets cited after Q4 results cluster around ₹190-229, highlighting that the market is still balancing demand uncertainty against longer-term expansion plans and the company’s asset strategy.