The Indian Hotels Company‘s share price saw a sharp 4% cut in Tuesday’s trade. However, brokerages are positive on the stock after IHCL 14% year-on-year growth in Q4 revenue even as the West Asia conflict resulted in cancellations worth Rs 400-500 crore at the consolidated level.
Following the Q4 results, brokerage Nuvama upgraded the stock to Hold from Reduce and raised its target price to Rs 676 from Rs 636 earlier, implying an upside of around 2% from current levels.
Nuvama stated, “The recent correction, along with higher visibility of non-LFL growth, has prompted us to upgrade the stock from Reduce to Hold.”
How IHCL performed in Q4FY26
Consolidated revenue for the quarter came in at Rs 2,765 crore, up 14% year-on-year. EBITDA grew at a similar pace to Rs973 crore, with margins at 35.2%. Adjusted PAT stood at Rs 600 crore, up nearly 15%.
Growth was running at 15% year-on-year in January and February before moderating to 11% in March, when the impact of West Asia-related cancellations began showing up. At an enterprise level, IHCL’s management indicated the revenue impact was closer to Rs 1,000 crore.
Standalone revenue grew 12% to Rs 1,660 crore, while EBITDA and PAT, excluding exceptional items, rose 17% and 24% respectively. Domestic same-store RevPAR was up 11.6% year-on-year, driven by a 15% jump in room revenue.
Domestic demand remains the key support
The company noted that domestic demand remained resilient through the quarter and into April, even as international markets stayed subdued. As per the report, leisure travel held up, business travel showed gradual recovery across urban markets, and Goa reported around 25% growth in March-April.
The report further added that Mumbai properties continued to operate at over 90% occupancy. The foreign guest mix stayed broadly stable at around 30% for standalone operations through FY26, with IHCL’s management stating there was no material change during the year.
TajSATS, the company’s air catering joint venture, delivered 13% growth with an EBITDA margin of 22.8%. Management fees for the full year crossed Rs 685 crore, up 22% year-on-year, reflecting both like-for-like growth and new hotel openings.
New businesses clock 25% growth
IHCL’s newer verticals, which include Ginger, Qmin, ama Stays & Trails and Tree of Life, reported 25% revenue growth in FY26, with combined revenue at Rs 753 crore, the report noted.
Ginger’s consolidated revenue crossed Rs 709 crore for the year. The Ginger Mumbai Airport property alone crossed Rs 100 crore in revenue while delivering a 56% EBITDA margin. Qmin expanded to over 100 outlets with gross merchandise value nearing Rs 200 crore.
The company also mentioned that these newer brands now contribute around 10% of enterprise revenues, with expectations of a higher share as scale improves.
Why Nuvama upgraded the stock
According to Nuvama, IHCL’s current operational portfolio stands at 375 hotels with over 33,000 keys, with a pipeline of 254 hotels adding another 31,300 keys, largely under asset-light or managed formats.
For FY27, IHCL’s management has guided for 12-14% revenue growth, supported by 60-plus hotel openings and room additions across Taj Ganges, Vivanta Ekta Nagar and Ginger Ekta Nagar, among others, as per the report.
The report also noted that of the guided growth, around 4-5% is expected from non-like-for-like contributions, with the balance driven by rate-led growth, given already high occupancies. Like-for-like ARR and RevPAR growth is expected in the 7-9% range.
Nuvama also flagged India’s BRICS presidency in CY26 as an additional tailwind, likely to drive diplomatic travel.
The brokerage revised its FY27 and FY28 revenue estimates upward by 1.7% and 1.9% respectively, and adjusted profit estimates by 7.1% and 5%.
IHCL: Key near-term risk
Despite the upgrade, Nuvama stopped short of a Buy rating. The brokerage flagged the Prime Minister’s austerity announcement as an overhang on domestic travel spending.
It also noted that non-like-for-like growth, which is expected to drive around a third of incremental revenues, depends on timely hotel launches, which have historically seen delays. The Taj Frankfurt opening, for instance, was pushed from FY26 to FY27.
The brokerage firm added that IHCL’s commentary was notably more cautious than its usual tone. At the current price, the stock trades at 27x and 23x its FY27 and FY28 EV/EBITDA estimates, respectively.
Disclaimer: The analysis of IHCL’s financial performance and specific brokerage price targets is intended for informational purposes and does not constitute an offer, solicitation, or recommendation to buy, sell, or hold any security. While these insights reflect current market sentiments and institutional analysis, individual financial goals and risk appetites vary; readers are encouraged to consult with a SEBI-registered investment advisor before making any market-related decisions. Past performance and brokerage upgrades are not guaranteed indicators of future results.
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