ITC Hotels Shares Skyrocket to 52-Week High – What’s Behind the Momentum?

With the holiday season fast approaching, stocks of companies operating in the hospitality and travel sectors—including hotels, airlines, and railways—have been witnessing increased investor interest and a surge in trading activity. This trend reflects growing optimism about rising demand for travel and accommodation during the festive period.

Among the companies benefiting from this momentum is ITC Hotels, a recently listed entity that has attracted significant attention from market participants. On Friday, shares of ITC Hotels experienced a notable rally, climbing 5.30% during intraday trading to reach ₹192.54 per share on the National Stock Exchange (NSE).

During the session, the stock touched a 52-week high of ₹193.27, marking its strongest level since listing. This upward movement has also contributed to an increase in the company’s overall market valuation, which stood at ₹40,070.87 crore, according to NSE data.

The surge in ITC Hotels’ stock price aligns with broader market enthusiasm for travel-related businesses, as investors anticipate strong earnings performance driven by increased bookings and higher occupancy rates during the holiday season.

Key Factors Driving Investor Interest in ITC Hotels Stock

ITC Hotels has been gaining significant attention in the stock market, with multiple factors contributing to its recent rally. The stock’s positive momentum is largely attributed to its inclusion in a major global index, strong industry outlook, and favorable analyst projections.

Inclusion in the FTSE All-World Index Boosts Sentiment

One of the key catalysts behind the surge in ITC Hotels’ share price is its recent inclusion in the FTSE All-World Index. According to reports, the stock has been added to this prominent global benchmark, with an estimated weightage of $52.6 million. This development is expected to bring higher capital inflows into the stock, as institutional investors and exchange-traded funds (ETFs) that track the index may allocate funds toward ITC Hotels.

Overall, the Indian equity markets are anticipated to witness inflows ranging between $1.4 billion and $1.6 billion following the index’s rebalancing, which took effect after the market closed on March 21. A total of 14 Indian companies have been included in the FTSE All-World Index as part of this update, further boosting foreign investor confidence in the country’s stock market.

Strong Growth Projections by Global Brokerage Jefferies

Adding to investor optimism, global brokerage firm Jefferies has revised its outlook for ITC Hotels, highlighting the company’s strong franchise, diversified brand portfolio, and solid financial position. In a recent report, Jefferies projected a steady improvement in occupancy rates, expecting them to rise from 69% in FY24 to approximately 75% by FY27. The firm also forecasted a Revenue Per Available Room (RevPAR) CAGR of 9% over the same period, indicating sustained growth in hotel revenues.

Additionally, Jefferies sees a positive outlook for the broader travel and tourism industry, which it expects to experience consistent demand between FY24 and FY27. As a result, the brokerage firm estimates that ITC Hotels will report steady financial growth, with EBITDA expected to grow at a CAGR of 15% for the hotel segment. This is projected to contribute to a total EBITDA CAGR of 16% for ITC Hotels between FY24 and FY27.

ITC Hotels’ Market Performance Since Listing

Since its listing, ITC Hotels has remained a stock of interest among investors, witnessing notable gains over the past month. In just over one month, the stock has surged almost 18%, reflecting strong buying interest.

The company was recently demerged from ITC Ltd., becoming an independent, publicly listed entity aimed at unlocking shareholder value. Following the demerger, ITC Hotels shares debuted on January 29, 2025, at a listing price of ₹188 per share on the BSE and ₹180 per share on the NSE. Since then, the stock has gained 12.3% as of Friday’s intraday trading session.

With increasing investor interest, strong growth expectations, and its inclusion in a globally recognized index, ITC Hotels continues to be a closely watched stock in the hospitality sector.

ITC Hotels: Ownership Structure and Strong Financial Performance in Q3 FY25

Ownership Structure Post-Demerger

Following its demerger from ITC Ltd., ITC Hotels now operates as a separate publicly listed entity. Despite the separation, ITC Ltd. retains a 40% ownership stake in ITC Hotels, maintaining a significant presence in the company’s operations. The remaining 60% of ITC Hotels’ shares were allocated to ITC Ltd. shareholders in proportion to their existing stakes in the parent company. This move was aimed at unlocking value for shareholders while allowing ITC Hotels to chart its own growth trajectory in the hospitality sector.

Record-Breaking Financial Performance in Q3 FY25

In the October to December 2024 quarter (Q3 FY25), ITC Hotels delivered its best-ever quarterly performance, demonstrating strong growth across key financial metrics.

• Revenue Growth: The company reported a total revenue of ₹922 crore, marking a 14.6% year-on-year (YoY) growth compared to the same quarter in the previous year. This growth comes on an already strong base, indicating sustained demand and operational efficiency.

• Profit Before Tax (PBT): ITC Hotels’ profit before tax (PBT) surged to ₹302 crore, reflecting an impressive 43.4% YoY increase. The significant jump in profitability highlights the company’s ability to leverage its revenue streams effectively while maintaining cost efficiencies.

Key Business Drivers

The company’s record-breaking performance was primarily driven by robust demand across multiple segments, including:

• Retail & Leisure Travel: Increased consumer spending on travel and staycations contributed to higher room occupancy and revenue.

• Wedding & Events Business: The wedding season played a crucial role in boosting hotel bookings, banquet services, and related hospitality offerings.

• Food & Beverage (F&B) Segment: Strong demand for fine dining, catering, and in-house restaurant services contributed significantly to revenue growth.

With consistent financial growth and rising consumer demand, ITC Hotels has reinforced its position as a leading player in the Indian hospitality industry.