The new target price implies an upside potential of 29% from the last closing price of Rs 621 on the BSE. The brokerage highlighted two key takeaways. First, it expects a limited impact in 4QFY26F, with EBITDA growth projected at 11% year-on-year, compared with its earlier estimate of 13% and around 3% below consensus. Second, while near-term visibility remains low, the revised estimates assume conditions will normalise over the next two to three months. Based on this, Nomura now expects an EBITDA CAGR of 13-14% for FY26 to FY28, slightly lower than its earlier estimate of 14-15%.
IHCL shares have declined 21% over the past six months, underperforming the Nifty 50, which is down 8%, amid heightened volatility linked to the Middle East conflict.
According to management, bookings in January and February remained strong, supported by events such as the ICC World Cup in Mumbai and the AI Summit in Delhi. While some cancellations were seen in March, the overall impact on the fourth quarter is expected to be limited.
For the standalone business, ADR or average daily rate is estimated to grow 4% quarter-on-quarter and 8% year-on-year in Q4. With occupancy likely to remain flat on a yearly basis, this is expected to result in mid to high single-digit RevPAR growth. On the management fee front, the company anticipates some impact from its three managed hotels in Dubai. However, given that Indian Hotels Company Limited has around 200 hotels under management contracts, management fee growth is expected to remain moderate, compared with earlier expectations of high-teen growth.
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The brokerage has moderately trimmed its FY27F RevPAR or revenue per available room growth estimate to 7% from 8%, factoring in the impact of the ongoing conflict. However, it expects some offset from a favourable base, as FY27F will include several low-base quarters due to geopolitical disruptions in FY26, including Operation Sindoor and the Air India airline crash.
It also expects a 200 to 300 bps contribution to topline growth from new acquisitions, along with a similar 200 to 300 bps boost from room additions at Taj Frankfurt, Varanasi and Ekta Nagar. Management fee growth is projected in the mid to high teens, supported by new unit additions.For FY28F, the brokerage has maintained its RevPAR growth estimate at 9%, remaining positive on the luxury segment and corporate travel demand over the medium term. It also expects operating leverage and strong flow-through from management fees to support margin expansion.
Overall, consolidated revenue and EBITDA are projected to grow 11% and 12% year-on-year, respectively, in Q4 FY26.
IHCL is South Asia’s largest hospitality company, renowned for over 120 years in the industry. The company is primarily engaged in the business of owning, operating and managing hotels and resorts primarily under various brands including, flagship brand Taj.
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