Business Standard

Saturday, February 15, 2025 | 04:55 AM ISTEN Hindi

Notification Icon
userprofile IconSearch

ITC Hotels listing today: Shares drop 5% after debuting at Rs 188 on BSE

ITC Hotels listing today: ITC Hotels listed at Rs 188 per share on the BSE on Wednesday, January 29, 2025. On the NSE, ITC Hotels share price listed at Rs 180 per share

ITC hotels

Photo: Twitter

Nikita Vashisht New Delhi

Listen to This Article

ITC Hotels listing: ITC Hotels shares listed at Rs 188 per share on the BSE on Wednesday, January 29, 2025. On the National Stock Exchange (NSE), ITC Hotels share price listed at Rs 180 per share.
 
ITC Hotels was recently demerged from the ITC businesses, to be listed as a separate entity for value unlocking for shareholders. The stock exchanges NSE and BSE held a special session on January 6, 2025, to discover the price of ITC stock, ex-hotel business. 
The tobacco-to-FMCG conglomerate had fixed the demerger ratio at 1:10, which meant that shareholders holding 10 shares of ITC, as on January 6, 2025, would have received one share of ITC Hotels post the demerger.
 
 
At 10:01 AM, ITC Hotels share price was quoting at Rs 179 per share, down 4.79 per cent on the BSE. On the NSE, ITC Hotels share price was at Rs 179.9 per share.
 
By comparison, the benchmark BSE Sensex was up 287 points or 0.38 per cent. ITC share price, on the contrary, was 0.38 per cent lower at Rs 433.6 per share.
 
Meanwhile, Abhilash Pagaria, head of Nuvama alternative & quantitative research, believes that domestic passive mutual fund (MF) schemes will have to sell around Rs 1,500 crore worth of ITC Hotels shares as the stock will be excluded from the indices three days after its listing.
 

ITC Hotels Outlook

According to a PTI report, ITC is looking to expand its hotel business internationally, beginning with neighbouring countries and West Asia.
 
The company is targeting to grow its hotels portfolio from 140 to over 200 hotels across India.
 
At present, ITC Hotels has 140 properties with 13,000 rooms, of which 45 per cent are owned and 55 per cent are operated through management contracts. The company plans to move towards an asset-light growth model, focusing on management agreements to increase its market presence.
 
Operating under six distinct brands -- ITC Hotels, Fortune, Mementos, Storii, WelcomHeritage, and Welcomhotel -- the group in April last year opened its first hotel in Sri Lanka. 
The company differentiates itself with its luxury segment, offering a broad range of products across diverse customer segments. Strategic partnerships, including its Global Distribution Agreement with Marriott, bolster ITC Hotels' visibility among international travelers, further supporting its growth trajectory, analysts note.
 

ITC Hotels Financials

 
Over the past decade, ITC Hotels' revenue, Ebitda, and Ebit have expanded at compound annual growth rates (CAGR) of 10.0 per cent, 14.6 per cent, and 18.0 per cent, respectively. As of FY24, Ebitda margin of ITC Hotels was 34.4 per cent. The hotel business contributed 4.1 per cent of ITC's overall revenue in FY24, while Ebit contribution from the segment was 3.0 per cent.
 
With an Average Room Rate (ARR) increase from Rs 7,900 in FY19 to Rs 12,000 (CAGR growth of 8.7 per cent), ITC Hotels' Revenue Per Available Room (RevPAR) increased from Rs 5,200 in FY19 to Rs 8,200 in FY24 (CAGR growth: 9.5 per cent).
 
Going ahead, the company plans to add 5,000 additional rooms by 2030E, with approximately 500 of those rooms being company-owned and the balance under management contracts.
 
"We project a revenue/Ebitda/profit before tax CAGR of 15.0 per cent/18.3 per cent/17.2 per cent over FY24-FY27E, with an expected Ebitda margin of 36.0 per cent in FY26E and FY27E. This growth is underpinned by a strong expansion strategy and favorable trends within the hospitality sector. With a debt-free balance sheet and robust cash flow generation, ITC Hotels Ltd (ITCHL) is well-positioned to capitalise on value-accretive M&A opportunities," analysts at Deven Choksey Research.

  ITC Share Price Target

  The demerger of ITC Ltd's hotel business, according to the brokergae, unlocks value by allowing ITC to focus on its high-margin, cash-generative core segments, while the standalone hotels entity gains flexibility to capitalise on industry growth and attract strategic investors.  "This move enhances resource allocation, supports distinct growth trajectories for both entities, and is expected to improve valuation multiples. Accordingly, we upgrade our rating on ITC Ltd to 'Buy' from 'Accumulate'," it said.
   

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jan 29 2025 | 10:09 AM IST

Explore News