Strong pipeline and demand tailwinds to fuel growth
Q1FY27 saw Indian Hotels Co. Ltd. (IHCL) delivering resilient performance, with 15%/17% consolidated revenue/EBITDA growth (14% domestic LTL RevPAR) in spite of geopolitical disruptions. Overall, IHCL has delivered 18.6%/21% revenue/EBITDA CAGRs over FY23–26. As of Jun’26, IHCL has ~33,600 operational keys at an entity level, with a pipeline of another ~32,600 keys set to open over the next 4–5 years. With a strong net cash position of INR 44bn, as of Jun’26, we build in consolidated 12%/15% revenue/EBITDA CAGRs over FY26–29E, assuming 7% LTL RevPAR growth. Retain BUY with an unchanged TP of INR 925, valuing the company on 30x Jun’28E EV/EBITDA. Key risks: Geopolitical demand disruptions; and domestic demand slowdown.
Demand drivers intact heading into H2FY27
For FY26, IHCL delivered 16.3%/15.4% revenue/EBITDA growth, which was commendable against the backdrop of geopolitical disruptions in Q1FY26 and Mar’26. Overall, the company delivered 18.6%/21% revenue/EBITDA CAGRs over FY23–26, led by a combination of industry tailwinds, the company’s brand strength and room expansion. This performance has continued in Q1FY27 as well, with the company reporting Q1FY27 consolidated revenue of INR 23.4bn (up 15% YoY) and EBITDA of INR 6.7bn (up 17% YoY), in spite of geopolitical impact owing to standalone RevPAR growth of 14%. As per the company, business on books for Q2FY27 is robust and it remains confident of achieving double-digit revenue growth in FY27. Further, the company is looking to utilise its cash balance of INR 44bn (as of Jun’26) to continue spurring growth.
Multiple levers to drive medium-term growth
As of Jun’26, IHCL has ~33,600 operational keys at an entity level, with a pipeline of another ~32,600 keys set to open over the next 4–5 years. We believe the company’s strong keys pipeline, coupled with high single-digit RevPAR growth at an industry level and contribution from new business and management fees, could enable mid-teens revenue/EBITDA growth in the medium term. We build in a consolidated 12% revenue CAGR and a 15% EBITDA CAGR over FY26–29E, assuming 7% LTL RevPAR growth and a management fees CAGR of 19% to INR 11.6bn in FY29E.
