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Hotel companies had good start supported by strong domestic leisure travel

ICICIdirect Research 24 Jul 2026 DISCLAIMER

Hotel companies had a good start in Q1FY27, especially companies having good presence in the domestic leisure travel.
Indian Hotels Co (IHCL) registered 15% YoY revenue growth in its consolidated biz, driven by 18% growth in the standalone (domestic) business. Standalone Revpar grew by 14% (highest amongst large players) driven by 600bps expansion in occupancy. ITC Hotels registered 10% revenue growth with domestic hotel business growing by 9% (occupancy improving by 220bps YoY; ARR growth 4%).
Despite rising fuel prices and wage cost, hotel companies played on operating efficiencies to post decent margin performance in Q1FY27. IHCL consolidated EBIDTA margins improved by 54bps YoY to 28.8% while ITC’s (ex-residential) EBIDTA margins expanded by 130bps YoY to 31.3%.
View:  Overall, both large hotel companies had a good start to Q1FY27 with double digit revenue and PAT growth. In seasonally weak Q2, the companies are expecting growth momentum to sustain on good leisure demand and low base. H2FY27 performance will also be driven by domestic leisure & mice/event segments. However, if West-Asian uncertainties recede, improve FTA will enhance H2 outlook. India Hotels Co (Reco-Buy; PT- Rs865) and ITC Hotels (Reco – Buy; PT- Rs220) remain our picks in the hotel space.

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