The holiday season is approaching, and Jefferies has listed out its top bets across hotel and Aviation sector stocks.
They have identified some key stocks with as much as 33% upside, though they see headwinds like capacity cuts for Air India, heavy monsoons, and slow recovery post-turbulent Q1 weighing on the travel sector.
Speaking on hotels, Jefferies said that revenue growth per available room (RevPAR) should moderate to 5-7% YoY in the second quarter.
Jefferies on Hotel stocks: ITC Hotels, IHCL, Chalet to see moderate growth
The base effect of higher marriage dates and excess monsoons affecting MICE (meetings, incentives, conferences, and events) and travel demand has hurt the industry growth for Q2.
Jefferies on The Indian Hotels Company
For The Indian Hotels Company, like-for-like revenue growth is expected to be 8% YoY for Q2. Jefferies estimates w9% EBITDA growth and 16% growth in net profit YOY in Q2. The brokerage estimated that standalone RevPAR growth will decline to 5-6% compared to 11% in Q1 FY26. The brokerage has a target price of Rs 960, implying upside of 33%.
Jefferies on ITC Hotels
For ITC Hotels, Jefferies expects the revenue growth to be 8% YoY, EBITDA at 13%, and net profit may jump 68% in Q2. However, the sharp rise in net profit is attributed to higher other income. All this will be achieved on the back of 8% YoY RevPAR growth for the company’s India-owned hotels. The brokerage has a target price of Rs 270, implying upside of 22%.
Jefferies on Chalet
The brokerage firm estimates that Chalet Hotel’s RevPAR growth to be 7% YoY, while revenue growth at 23%, EBITDA at 28%, and net profit at 25% for Q2. Jefferies has a target price of Rs 1,060, an upside of 10.4% from current levels.
Jefferies on Aviation stocks: Degrowth in Q2
India’s domestic aviation sector may see a degrowth in Q2 FY26, as against a 4% growth in Q1 FY26 on the back of continued disruption in services as well as slow recovery in travel sentiment after the unfortunate Air India crash in Q1.
Jefferies on IndiGo
The brokerage house estimates that IndiGo’s capacity per ASK (Available Seat Kilometres) is expected to grow at 7-8% YoY in Q2 FY26, amid the company’s focus on optimising domestic capacity in a seasonally soft quarter and much stronger growth on international routes. The brokerage has a target price of Rs 6,925, upside of 24%.
“We build Q2 occupancy at 83% (vs 82.7% YoY), implying 8% YoY growth for IndiGo and market share gains, as Air India remains impacted with capacity constraints.” They estimate “yields to be higher 0.6% YoY at Rs 4.57 for Q2.” Jefferies highlighted that the company may see a huge loss of forex, estimated to be Rs 2,300 crore mark-to-market in Q2, compared to Rs 240 crore of forex loss in Q2 FY26.
Jefferies on GMR Airports
Jefferies estimates overall air traffic to decline 3% YoY in Q2 for GMR Airport’s Indian airports, attributable to capacity cuts by airline companies and a 3-month runway shutdown at the Delhi Airport (estimated 7% YoY decline in traffic at Delhi International Airport in Q2). The brokerage has a target price of Rs 108, an upside of 20%.
“We expect GMR Airport Q2 EBITDA to grow 50% YoY (to Rs 1,300 crore, flat QoQ), benefiting from the full quarter impact of the new tariff at DIAL, operationalisation of Delhi Duty Free and Cargo operations at GMR Airports platform level,” said Jefferies.
Jefferies on TBO Tek
The brokerage said that TBO Tek’s revenue growth will continue to be faster than GTV (Gross Transaction Value) growth due to the increasing share of higher take-rate in the hotel business. The company’s margins are expected to remain lower. The company’s margins have been on a declining trajectory since the past few quarters, and the management has talked about margins turning positive YoY from Q4FY26. The brokerage has a target price of Rs 1,800, an upside of 18.4%.