Jefferies has expressed an optimistic outlook for ITC Hotels, which is set to demerge its hotel business in the fourth quarter of FY25. The brokerage, after meeting with management, cites strong revenue, EBITDA, and room inventory profiles that position ITC Hotels as the second-largest player in the sector.
The National Company Law Tribunal (NCLT), Kolkata Bench, has sanctioned the demerger of ITC Limited’s hotels business, paving the way for ITC Hotels to become a separate company. Post-demerger, ITC Hotels is expected to have a strong debt-free balance sheet with a net worth of nearly ₹10,000 crore, which it can leverage to raise capital from debt and/or equity markets.
Jefferies expects ITC Hotels to capitalize on greenfield projects, premiumization, and industry tailwinds. The demerger is anticipated to unlock listing opportunities, as ITC Hotels currently accounts for 4% of ITC’s Sum-of-the-Parts (SOTP) valuation.
