Indian Hotels hits new high

Indian Hotels Company (IHCL) is among the top gainers on the BSE today, rising 4.67% to Rs. 787.15. The stock opened at Rs. 761.30 against its previous close of Rs. 752 and touched a fresh 52-week high of Rs. 788.60. Trading activity surged, with 22.13 lakh shares changing hands against a two-week average of 4.82 lakh shares, while turnover stood at Rs. 170.74 crore.

Trigger

• Q2 FY27 revenue from operations rose 21.7% YoY to Rs. 2,484.32 crore.
• Operating EBITDA increased 24% YoY to Rs. 706 crore, with margins expanding 50 bps to 28.4%.
• Consolidated reported PAT rose 19.4% YoY to Rs. 379.85 crore, while profit attributable to shareholders grew 23% to around Rs. 349 crore.
• Domestic same-store RevPAR grew 25% YoY, indicating stronger room rates and occupancy.
• Management fee income increased 25%, supported by new hotel openings.
• FY27 consolidated revenue growth guidance upgraded to 15–17% from 12–14%.
• Hotel segment revenue growth expected at 17–19% for FY27.

The biggest positive is that IHCL is delivering growth across occupancy, room rates and management fees, rather than relying solely on new hotel additions. This was its 18th consecutive record quarter, while the standalone hotel business reported 26% revenue growth and 40% operating EBITDA growth, with margins expanding 400 bps to 38.9%. Stronger pricing power, renovated properties and healthy demand for premium hospitality are translating into better operating leverage.

The second major sentiment driver is the upward revision in FY27 guidance. With the wedding season, corporate travel and MICE (meetings, incentives, conferences and exhibitions) demand expected to support H2 FY27, management sees stronger revenue visibility. IHCL signed 47 hotels in H1 FY27, taking its portfolio to 670 hotels, including 280 in the pipeline. Its asset-light expansion strategy should support management fee growth without requiring proportionate capital investment.

Another important development is the proposed all-stock merger of Oriental Hotels with IHCL. The merger, subject to approvals, will simplify the group structure and bring premium assets such as Taj Coromandel Chennai, Taj Fisherman's Cove and Taj Malabar more directly into IHCL's portfolio. This could improve capital allocation, operational integration and long-term earnings visibility.

At Rs. 787.15, IHCL trades at approximately 47x consolidated PE, with a price-to-book ratio of 10.79. The stock is already pricing in sustained double-digit growth and healthy margins.