ICICI Securities, through its ICICI Direct retail research desk, has kept its BUY rating on ITC Hotels and left its sum-of-the-parts target at Rs 220. In a result update dated Oct. 27, 2026, the brokerage described the first half of FY27 as "good" and said momentum should hold through the second half. The country's second-largest hotel company now runs 14,326 keys across more than 90 destinations.

The stock, at Rs 170, sits well below its 52-week high of Rs 261, a gap the brokerage regards as the opportunity.

The Night Audit: How the Second Quarter Closed

Consolidated hotel revenue, excluding the residential project, rose 17.4% year on year to Rs 976.6 crore. The standalone domestic business grew 16.5% to Rs 878.7 crore, and ICICI Securities estimates that ITC Ratnadipa in Colombo grew about 12% and turned EBITDA-positive. Operating EBITDA climbed 25.1% to Rs 307.6 crore, and profit after tax jumped 34% to Rs 180 crore.

The quarter's signature was that occupancy and pricing rose together, which is the most profitable combination a hotelier can have. Average daily rate climbed 13.3% to about Rs 12,800, while occupancy expanded 520 basis points. The brokerage attributes much of the lift to MICE business, notably the BRICS summit in New Delhi, layered on top of resilient domestic travel.

The Lobby Directory: Where the Revenue Came From

Management fees deserve attention because they are the asset-light engine. They rose on like-for-like growth and a steadily larger managed portfolio. Across the first half, fees grew 30% to Rs 92 crore, outpacing every other revenue line.

The Sapphire Residences project in Colombo continued its gradual handover. Four apartments covering 20,000 sq ft changed hands during the quarter, taking the cumulative tally to 20 of 132 units, or 1.01 lakh sq ft, at an average realisation above Rs 31,600 per sq ft. Including this income, consolidated EBITDA rose 37.3% to Rs 337.5 crore and adjusted PAT surged about 54% to Rs 199.4 crore.

The Key Rack: A Dual-Engine Portfolio

ITC Hotels is pursuing what the brokerage calls a dual-engine strategy, targeting an operating footprint of more than 22,000 keys by FY31. Owned inventory is set to rise from 5,841 keys to about 7,500, while managed keys are targeted to climb from 8,485 to about 15,000.

Signings have gathered pace, with 20 managed hotels added in H1FY27 against 15 a year earlier, and more than 60% of the 68 managed hotels signed in the past 24 months sit in the premium segment. Recent purchases of the 72-key ITC Kumarakom and the 130-key Welcomhotel Ahmedabad bolster the owned book, and a Dubai subsidiary, seeded with about Rs 20 crore, will operate hotels in the Gulf. The five owned projects under way carry their own luggage tags:

Crucially, a cash pile of about Rs 1,590 crore against debt of roughly Rs 262 crore means the company can fund acquisitions and room additions without stretching its balance sheet.

The Forecast Ledger

ICICI Securities has broadly held its estimates. It trimmed FY27E revenue by 1.2% while nudging EBITDA up 1.1%, and pared FY28E profit by 1.9%. It expects H2FY27 hotel revenue to grow in the high teens, helped by Welcomhotel Ahmedabad and other new openings.

Building the Rs 220 Target, Floor by Floor

The target rests on a sum-of-the-parts valuation. ICICI Securities applies 21 times EV/EBITDA to average FY28-29E EBITDA, then adds the residential project and net cash.

Net cash of Rs 1,330 crore equals FY26 cash of about Rs 1,591 crore less debt of about Rs 262 crore. On the brokerage's own table, the stock trades at 20.5 times FY27E and 17.2 times FY28E EV/EBITDA, comfortably below the 21-times multiple used for the target.

Please Do Not Disturb: The Risks

A further sensitivity is the base effect. Part of Q2's surge came from one-off MICE events such as the BRICS summit, which the next year's comparison quarter will not enjoy.