ITC Hotels debuts at Rs 188/share, charts growth path as standalone entity
ITC Hotels lists in line with market expectations at Rs 188 per share on BSE, following its demerger from ITC Ltd.
![ITC Hotels debuts at Rs 188/share, charts growth path as standalone entity](https://cdn.zeebiz.com/sites/default/files/2025/01/29/348644-realty.png?im=FitAndFill=(1200,900))
ITC Hotels begins independent journey on exchanges ITC Hotels officially debuted on the stock exchanges after its demerger from ITC Ltd., marking a new phase for the hospitality business. The demerger, announced earlier in 2024, resulted in ITC retaining a 40 per cent stake, while the remaining 60 per cent was distributed to ITC shareholders in a 1:10 ratio. This strategic move aims to unlock greater value for the hotel business, allowing it to pursue independent growth strategies.
Expanding presence and brand portfolio With a robust expansion plan, ITC Hotels currently operates 140 properties across India. Its portfolio is diversified across six brands:
- ITC Hotels
- WelcomHeritage
- Mementos
- WelcomHotel
- Storii
- Fortune
The company follows an asset-light strategy, with a 45:55 owned-to-managed room ratio. By FY30, ITC Hotels aims to grow its portfolio to over 200 properties with 18,000+ keys, shifting its owned-to-managed ratio to 35:65.
Financial performance and key metrics In FY24, ITC Hotels contributed 4.1 per cent to ITC Ltd.’s overall revenue, with an EBIT share of 3 per cent. The Average Room Rate (ARR) saw a significant rise from Rs 7,900 in FY19 to Rs 12,000 in FY24, reflecting a 51.9 per cent increase. Meanwhile, Revenue per Available Room (RevPAR) improved from Rs 5,200 to Rs 8,200 in the same period, driven by strong occupancy levels, which stood at 69% in FY24. Room sales contributed 52 per cent to total revenue, while food and beverage accounted for 40 per cent.
Strategic growth pillars ITC Hotels has outlined five key strategic pillars to drive its independent growth:
- Equity: Continued investment in brand equity
- Asset Right: Target to achieve a two-thirds managed portfolio within five years
- Digital First: Smart revenue management and operational efficiency
- Capital Productivity: Focus on cost optimization and new revenue streams
- Employer of Choice: Strengthening workforce development and leadership programs
Strong balance sheet to support growth A major advantage for ITC Hotels is its zero-debt balance sheet, allowing it to reinvest in growth without financial strain. The company has earmarked 8-10% of revenue for capital expenditure, covering renovations, ongoing projects, and new Greenfield properties. Additionally, value-accretive M&A opportunities remain a key focus area.
Outlook and way forward With India’s hospitality sector poised for strong growth, ITC Hotels is well-positioned to capitalize on rising demand. Its expansion strategy, combined with a strong brand portfolio and financial stability, provides a solid foundation for long-term success. As the company embarks on its independent journey, investors will closely watch how it navigates the evolving market landscape.
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