Indian Hotels shares fall 3%, hit near two-month low after Morgan Stanley downgrade

IHCL share price

• IHCL shares dropped over 3 percent after Morgan Stanley downgraded the stock
• Morgan Stanley cut IHCL's target price to Rs 780 from Rs 811 per share
• IHCL's Q2 net profit fell 49% YoY, revenue increased 12% YoY.

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The shares of Indian Hotels Company (IHCL) dropped more than 3 percent on January 7 after Morgan Stanley downgraded the stock and cut its target price.

The shares of the company dropped to a near two-month low of Rs 703.30 apiece in the morning trading hours of Wednesday.

Morgan Stanley on IHCL:

Morgan Stanley has downgraded the shares of IHCL to 'equal-weight' from its earlier 'overweight' rating, and cut its target price to Rs 780 per share from Rs 811 apiece. The latest target price implies a upside potential of more than 7 percent from the stock's previous closing price of Rs 726.40 apiece.

By leveraging the Taj brand, IHCL has created a hospitality ecosystem that delivers industry-leading return ratios and free cash flow, CNBC-TV18 quoted Morgan Stanley as saying. It added that while the industry revenue per available room cycle is strong, it may see limited upside surprises.

The brokerage sees domestic hotel RevPAR growth of 9-10 percent in Q3 FY26; EBITDA up approximately 10 percent YOY. However, it cut FY26-28 EPS outlook by 2-3 percent due to slightly lower RevPAR estimates and margins.

The international brokerage added that the enterprise value (EV)/earnings before interest tax depreciation and amortisation (EBITDA) of 27.5x for FY27, properly captures the risk-reward.

IHCL Q2 Results:

The Indian Hotels Company (IHCL) on November 4 reported a consolidated net profit of Rs 285 crore for the July-September quarter of the financial year 2026. This marks a 49 percent YoY decrease from the Rs 554.58 crore net profit reported in the same period last year, including a one-time gain.

The firm's revenue from operations meanwhile rose nearly 12 percent YoY to Rs 2,041 crore.

IHCL share price:

IHCL shares fell more than 4 percent in the past five days, and around 2 percent in the past one month. The stock fell 17 percent in the past one year.

The company's market capitalization of Rs 1,00,437.38 crore.

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