Jefferies sees 32% upside for ITC Hotels as asset-light expansion accelerates

Jefferies has set targets of Rs 210 for ITC Hotels and Rs 675 for Leela Hotels, implying 32% and 25% upside. ITC Hotels is targeting 22,000 rooms by FY31, with a larger managed-property mix, while Leela is building an ownership-led luxury pipeline and targeting Rs 20 billion EBITDA by FY30.

— Source publishedTue, 22 Sept, 2026, 18:25 IST·First seen Tue, 22 Sept, 2026, 18:46 IST·Source Financial Express · BrandWagon

What happened

Jefferies sees demand outpacing hotel supply in India, with ITC Hotels expanding through asset-light management contracts and Leela pursuing an ownership-led

Key facts

  • Jefferies target price: ITC Hotels Rs 210
  • Jefferies target price: Leela Hotels Rs 675
  • Implied upside: ITC Hotels 32%
  • Implied upside: Leela Hotels 25%
  • ITC Hotels room inventory target: 14,300 to 22,000
  • ITC owned rooms: 5,700 to 7,500 between FY26 and FY31
  • Managed rooms currently about 60%; target around two-thirds
  • Hotel demand growth about 10% versus supply growth 9-9.5%
  • ITC occupancy about 76% in Q1 versus 74% in FY26
  • Leela announced pipeline: about 1,100 rooms
  • Leela EBITDA target: Rs 20 billion by FY30
  • Leela EBITDA visibility: Rs 18-19 billion
  • Leela F&B share of gross revenue: 35-40%
  • Foreign guests account for 40-50% of Leela mix

Why this matters

ITC Hotels’ planned increase from 14,300 to 22,000 rooms highlights the strategic value of management contracts and selective owned assets in accelerating market coverage without proportionate capital deployment.

What to watch

  • Quarterly net room additions, signed management pipeline and conversion rate from announced properties to operational hotels.
  • Managed-room mix progressing toward roughly two-thirds of total inventory and associated growth in management-fee income.
  • RevPAR, occupancy and ADR trends relative to Indian luxury and upscale hotel peers.
  • Share of direct bookings, loyalty membership growth and OTA commission as a percentage of room revenue.
  • Capital expenditure, net debt and return on capital employed as owned rooms rise from 5,700 toward 7,500.
  • New hotel supply in key metros, leisure destinations and convention markets, especially from luxury competitors.
  • Corporate travel, inbound tourist arrivals, weddings/MICE demand and domestic leisure indicators.
  • Prioritize management and franchise agreements in high-demand micro-markets where ITC can add rooms without materially increasing capital employed.
  • Use the expanded portfolio to grow direct-booking share, loyalty enrollment and corporate-negotiated business, reducing OTA commission dependence.
  • Concentrate owned-hotel capital on flagship luxury assets and selectively recycle non-core real estate if valuations support it.
  • Build central procurement, revenue-management and shared-services capabilities ahead of room additions so margin gains scale with the managed portfolio.
  • Track Leela's ownership-led luxury pipeline as a competitive benchmark for premium ADR, talent and high-end event demand.