Indian Hotels share price up 2% on Morgan Stanley's 'overweight' call

IHCL's share price has tanked 13 percent since the start of the year.

Shares of Indian Hotels Company Limited or IHCL gained 2 percent to Rs 776 in morning trade on February 21, extending gains for the fifth session in a row, after Morgan Stanley retained its 'overweight' stance on the stock and assigned a target price of Rs 856.

With a price target of Rs 856, the international brokerage implies an upside potential of 12.5 percent from the last closing price of Rs 761 on the National Stock Exchange (NSE). IHCL's share price has tanked 13 percent since the start of the year.

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Morgan Stanley analysts suggest ICHL has strong support from Mumbai’s hospitality market. RevPAR or revenue per available room growth in Mumbai and Delhi stood at 21 percent each in January, compared to 18 percent and 11 percent YoY, respectively.

India’s largest hospitality company by market capitalisation reported a strong third-quarter performance for FY24-25, with a 29 percent year-on-year rise in profit, driven by robust revenue growth and expanding margins.

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For the quarter ended December 31, 2024, consolidated revenue surged 29 percent to Rs 2,592 crore, while EBITDA grew 32 percent to Rs 1,020 crore. The EBITDA margin expanded by 80 basis points to 39.4 percent. Profit after tax (PAT) stood at Rs 582 crore, reflecting a 29 percent YoY increase.

"The revenue performance was driven by a 40 percent rise in New Businesses and double-digit growth in same-store hotels," said Puneet Chhatwal, Managing Director & CEO of IHCL. He added that the sector is poised for continued demand buoyancy in the coming quarters, supported by large-scale regional events, weddings, and sustained transient travel.

At about 9:20 am, shares of the company were trading at Rs 775, higher by 1.8 percent from the last close on the NSE.

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