ITC Hotels Share: Zero-Debt Hotel Stock Lists At 30-31% Discount; Check Price, Fundamentals; Should You BUY?

ITC Hotels Share Price: After demerger with FMCG giant ITC, the share price of ITC Hotels has finally been listed on BSE and NSE. However, ITC Hotels' market debut was at a discount of 30% to 31% on exchanges, and the stock froze at its lower circuit. Currently, the stock is below Rs 180 levels. ITC Hotels is a debt-free company and its outlook is positive for the long-term basis.

ITC Hotels Share Price BSE:

At the time of writing, ITC Hotels' stock price was at Rs 178.60 apiece, locked at its 5% lower circuit on BSE, with market cap of around Rs 178.60 crore. The current price level is also its new 52-week low.

The stock opened at Rs 188 apiece, which was down by 30.4% from its issue price of Rs 270 apiece. Post listing, the latest 52-week high of Rs 189 apiece.

ITC Hotels is listed and admitted to dealings on the Exchange in the list of ''T'' Group Securities.

ITC Hotels Share Price NSE:

This hotel stock is listed at a 30.8% discount on NSE to Rs 180 apiece from its issue price of Rs 260 apiece. The stock's new 52-week high and low is at Rs 180 apiece and Rs 171 apiece respectively.

Currently, the stock traded lower by 4.7% to Rs 171.55 apiece with a market cap of Rs 35,702.49 crore.

Data from Trendlyne highlighted that the Debt to Equity Ratio is zero as the company is debt-free, while the Return on Equity(ROE) for the last financial year was 1.31%, less than 10%, indicating an inefficient use of shareholder's capital to generate profit.

ITC Hotels is a direct competitor to Tata Group-backed Indian Hotels which owns the brand Taj Hotel.

What Should Investors Do?

Riyank Arora technical analyst at Mehta Equities Ltd said that limited data availability on charts suggests a technical support at 167.50 and an immediate resistance at 177 mark. Overall, the trend is looking to be slightly on the negative side post-listing due to the market sentiment. If the level of 167.50 breaks then this selling can further extend towards 162.50 and 160.00 odd levels. Investors are advised to wait & watch before acting upon this stock.

Key Fundamentals Of ITC Hotels:

In its latest report, KR Choksey said, "We project a revenue/EBITDA/PBT CAGR of 15.0%/18.3%/17.2% over FY24-FY27E, with an expected EBITDA margin of 36.0% in FY26E and FY27E. This growth is underpinned by a strong expansion strategy and favourable trends within the hospitality sector. With a debt-free balance sheet and robust cash flow generation, ITC Hotels Ltd (ITCHL) is well-positioned to capitalize on value-accretive M&A opportunities."

Further, KR's note added, that comparable peers, Indian Hotels and EIH Ltd are currently trading at an FY26E EV/EBITDA multiple of 31.0x and 21.2x, respectively.

Additionally, brokerage Centrum has highlighted that ITC's hotel business has scaled up significantly in the last two decades and the last 10 years its revenues grew CAGR ~10%. Currently, ITC holds 140 properties with ~13000+ keys (45% owned) across 90+ locations under 6 brands in luxury, premium and budget segments. ITC's hotel business ranked amongst the fastest-growing hospitality chain in India with marquee brands such as 'ITC hotels, 'Mementos', Welcomhotel, Storii, Fortune and WelcomHeritage. Management has set a target to reach 200+ hotels and 18,000+ keys (35% Owned) by CY30 and cater to plan Rs15bn cash for the next leg of growth. The hotel business contributed 4.3% of ITC's overall sales in FY24 and made up an EBIT contribution of 3.1% with an EBITDA margin of 34% whereas ITC incurs >20% of total capex for the hotel business.