Overview

• The brokerage’s initiation implies roughly a 12% downside from the last close for the demerged and newly listed hospitality company.
• JM Financial highlights current pricing near 30 times FY27 earnings and sets its target by valuing ITC Hotels at 25 times June 2027 EBITDA, about a 15% discount to Indian Hotels Company.
• Near-term growth is seen as constrained because no new properties are slated for commissioning until FY28 apart from the Sri Lanka ramp-up, with portfolio occupancy already around an optimal 73%.
• The firm models an 11% revenue CAGR and 13% EBITDA CAGR over FY25–28, slower than the roughly 22% EBITDA CAGR delivered over FY23–25.
• Despite a debt-free balance sheet with about Rs 1,700 crore net cash and projected Rs 2,500 crore in free cash flow over FY26–28, JM Financial says these strengths appear priced in after a stock rise of roughly 42% since listing.