ITC Hotels target raised to Rs 205 as Nomura sees 16% hotel EBITDA CAGR

What happened

Nomura raised its target price for ITC Hotels to Rs 205 and kept its Buy rating after Q2FY27 revenue and EBITDA beat consensus estimates by 8% and 13%. Nomura also raised its FY27 and FY28 EPS estimates.

Confirmed

Global impact / market context

A higher target price means Nomura expects more value per share, so investors may review their holdings. Higher profit estimates and room-revenue assumptions signal Nomura sees stronger hotel demand, which could support the share price if results keep beating expectations.

Analyst inference

ITC Hotels is growing by adding rooms through leases and purchases, which raises capital spending but should lift future revenue. Management says room revenue growth stayed in the mid-teens even without the BRICS summit, easing concern that the beat was a one-off event.

Analyst inference

What to watch

1. Watch whether hotel-segment revenue per available room keeps growing near 10% a year, which means revenue per room adjusted for occupancy, since Nomura raised this assumption from 8%. Confirmed
2. Track new room additions from the Yashobhumi lease, ITC Kumarakom, Welcomhotel Ahmedabad and Lucknow land, because more rooms convert into revenue and profit only after opening. Proposed
3. Monitor hotel-segment profit per sale, called EBITDA margin, and food and beverage growth, since a slowdown there would weaken the earnings growth that supports Nomura's Rs 205 target. Analyst inference

Evidence

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