Shares of Indian Hotels Company Ltd (IHCL), the hospitality arm of the Taj Group, are likely to remain in focus during Wednesday’s session after global brokerage JPMorgan initiated coverage on the stock with an “Overweight” rating. The brokerage has set a price target of Rs 890, implying a potential upside of nearly 17% from Tuesday’s closing level.
As of 9:30 am the shares were trading 2.45% higher at ₹782.85 on NSE.
JPMorgan termed the stock’s recent underperformance—down 13% year-to-date—as “temporary” and expects a reversal driven by three key factors.
First, the brokerage expects better-than-anticipated RevPAR (Revenue per Available Room) for the ongoing financial year. Second, it forecasts a reversal of consensus Earnings Per Share (EPS) downgrades, which had occurred post the India-Pakistan border tensions and Operation Sindoor. Third, JPMorgan anticipates a strong Q1 performance on a low base and early signs of strong demand momentum.
Further, JPMorgan expects Indian Hotels to achieve its FY30 targets earlier than planned. The company’s Return on Capital Employed (RoCE) is projected to cross 19% by FY28, driven by aggressive additions to managed keys and a shift towards a capital-light model, which is expected to constitute 70% of the business.
Revenue growth is projected at a mid-teens CAGR over FY25-FY28, while operating margins are forecast to expand over 100 basis points to exceed 36% by FY28.
As of now, 15 out of 25 analysts tracking the stock have a “Buy” rating, while six recommend “Hold” and four suggest “Sell.”
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