Indian Hotels Co Ltd (IHCL) is reinforcing its position as a leader in the hospitality sector with a strategic pivot to an asset-light growth model and strong performance across emerging business segments, analysts said in a recent note.
The Tata Group-owned company, which owns the Taj, Vivanta, SeleQtions, and Ginger hotel brands, is expected to deliver 18% CAGR in revenue and 24% CAGR in EBITDA over FY24-27. Analysts maintain a “Buy” rating on the stock with a target price of ₹950, implying a 24% upside from the current market price of ₹768.
IHCL’s asset-light strategy has led to a sharp increase in managed hotel rooms, which posted an 18% CAGR between FY19-24, significantly outpacing the 2% growth in owned rooms. This transition, driven by management contracts offering EBITDA margins of 70–75%, has materially improved scalability and profitability.
The shift is evident across brands. As of the third quarter of FY25, managed rooms accounted for 65% of Vivanta’s total room portfolio, up from 51% in FY19. For Taj, SeleQtions, and Ginger, the share stood at 46%, 61%, and 20%, respectively—each marking significant growth from FY19 levels.
Roots Corporation Ltd (RCL), which operates Ginger Hotels, is being repositioned as a lean-luxe offering. This has resulted in a 13% CAGR in revenue and a 55% CAGR in EBITDA between FY19-24. RCL plans to add 874 rooms under the Ginger brand by FY27. Integration with IHCL’s food delivery platform, Qmin, is also expected to drive additional revenue streams and operating efficiencies.
Other emerging segments like The Chambers (exclusive business club) and TajSATS (catering services) are gaining traction, posting revenue CAGRs of 22% and 11% respectively over FY17-23. Combined, these segments are projected to contribute 12–14% of total revenue by FY30, up from just 2% currently.
IHCL is also consolidating control over key subsidiaries such as Roots Corporation, Piem Hotels, Taj Cape Town, and IHOCO BV. This is aimed at aligning strategic objectives and enhancing operational flexibility.
With India’s hospitality industry entering a high-growth phase, IHCL’s transformation journey positions it to benefit from both structural tailwinds and internal efficiencies.
