The share price of Indian Hotels Company is in focus after Motilal Oswal reiterated its positive stance on the Tata Group hospitality company. In its report dated January 21, 2026, the brokerage retained a ‘Buy’ rating on the stock with a target price of Rs 850, indicating an upside of around 30% from current levels.
Motilal Oswal said its view is driven by IHCL’s improving profitability, rising contribution from managed hotels, steady expansion across brands, and strong balance sheet. The brokerage added that the company’s operating performance over recent years supports expectations of sustained growth.
Motilal Oswal on Indian Hotels’ business and scale
Motilal Oswal described Indian Hotels Company as India’s largest hospitality company, with a history spanning over 120 years and operations spread across four continents, 14 countries, and more than 175 locations.
The brokerage noted that IHCL’s portfolio covers over 50 spiritual destinations, 45 mountain locations, and 30 coastal destinations, providing diversification across leisure, business, and experiential travel segments.
According to the report, IHCL has moved from being a single-brand operator to a house of brands, with each brand addressing different customer segments and price points. Motilal Oswal said this structure allows sharper brand positioning and more targeted customer engagement, supporting both occupancy levels and pricing power across cycles.
Asset-light strategy and margin expansion
In its analysis, Motilal Oswal said IHCL’s continued focus on expanding its asset-light portfolio has been a key driver of margin improvement and return ratios. The brokerage pointed out that managed keys recorded a compound annual growth rate of about 17.4% during FY20–25, significantly higher than the roughly 3.6% CAGR in owned keys over the same period.
This, according to Motilal Oswal, has resulted in higher operating leverage, better cash flow generation, and improved capital efficiency.
The report stated that IHCL delivered consolidated revenue, EBITDA, and adjusted PAT CAGRs of 13%, 23%, and 39%, respectively during FY20–25, while EBITDA margins expanded from 21.7% in FY20 to 33.2% in FY25. Motilal Oswal added that return ratios have also improved steadily, with ROCE rising from 7.1% in FY20 to 17.5% in FY25.
Ginger brand remains central to growth
Motilal Oswal devoted significant focus to the Ginger brand, which it described as a major contributor to IHCL’s growth in the mid-scale segment. According to the report, following the re-imagination of Ginger in FY18–FY19, the brand reported an annualised revenue growth of about 18% between FY20–FY25
This isaccompanied by a sharp improvement in margins from around 22.9% in FY20 to approximately 34% in FY25.
The brokerage said, “Further, we expect Roots to deliver a revenue CAGR of 20% over FY25–28, with margins expanding to ~45.2% in FY28.” Motilal Oswal also highlighted the performance of Ginger’s flagship Mumbai property, which reported occupancy of about 88% and generated revenue of Rs 97 crore with EBITDA margins of around 55% in FY25.
In terms of scale, Motilal Oswal said IHCL aims to expand the Ginger network to nearly 250 hotels over the next 12–18 months, from around 108 hotels as of September 2025, including operational and pipeline properties. The brokerage noted that this expansion includes new additions as well as rebranding of acquired hotels under the Ginger brand, which is expected to support faster growth and margin expansion.
Pipeline, management fees, and future margins
Motilal Oswal said IHCL’s development pipeline of 167 hotels with around 22,000 keys is largely capital-light, with about 78% of hotels and 82% of keys under such formats.
The brokerage expects this to support further margin expansion, adding that management fees are projected to grow at a CAGR of 23% during FY25–28 and contribute around 9% of consolidated revenue in FY28, compared with 7% in FY25.
The report stated, “We expect consolidated margins to further expand to 33.7%/35.7%/36.5% in FY26/FY27/FY28 from 33.2% in FY25.” Motilal Oswal attributed this to operating efficiencies, scale benefits, and the rising share of asset-light properties within the portfolio.
Acquisitions and portfolio additions
Motilal Oswal also discussed IHCL’s recent inorganic initiatives, noting that the company has followed a disciplined approach while pursuing acquisitions to strengthen brand presence and enter adjacent segments.
The brokerage cited IHCL’s acquisition of about 55% stake in Rajasca Hotels Private in November 2024 for a cash consideration of Rs 176.6 crore, which added 18 hotels under the Tree of Life Resorts & Hotels brand.
In August 2025, IHCL acquired a 51% stake in ANK Hotels and Pride Hospitality for a total investment of Rs 2,040 crore, adding a mid-scale portfolio of 135 hotels with 6,800 keys, most of which are slated for rebranding under Ginger. Motilal Oswal noted that ANK and Pride reported revenue of Rs 33 crore and EBITDA of Rs 3 crore in FY25, with margins expected to expand further.
The brokerage also referred to IHCL’s January 2026 announcement of acquiring a 51% stake in Brij Hospitality Pvt, as well as its entry into the luxury wellness segment through the acquisition of a majority stake in Atmantan Wellness Resort.
According to Motilal Oswal, Atmantan reported EBITDA margins of around 50% and revenue CAGR of about 25% during FY19–25, supporting IHCL’s move into high-margin niche segments.
Demand outlook and valuation view
Motilal Oswal said the operating environment for the hospitality sector remains supportive, with demand growth estimated at 9–11%, continuing to outpace supply growth of around 6–7%.
The brokerage expects this demand-supply balance to aid occupancy levels and pricing across key markets.
On valuation, Motilal Oswal expects IHCL to deliver revenue, EBITDA, and adjusted PAT CAGRs of 14%, 18%, and 17%, respectively over FY25–28, with ROCE improving to about 23.9% by FY28 from 17.5% in FY25. Based on these expectations, the brokerage reiterated its BUY rating and maintained its SoTP-based target price of Rs 850 for Indian Hotels Company.
Conclusion
Motilal Oswal Financial Services said Indian Hotels Company remains well placed to sustain growth, supported by its expanding managed portfolio, strong performance of the Ginger brand, selective acquisitions, and a healthy balance sheet. With margins projected to rise further and return ratios expected to improve over the next few years, the brokerage reiterated its positive view on the stock.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.