Tag: ITCHotels

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ITC Hotels to acquire The Zuri Kumarakam for ₹205 cr

ITC Hotels has announced plans to acquire The Zuri Kumarakom, Kerala Resort & Spa for ₹205 crore, marking a major step in expanding its luxury hospitality business. The acquisition will give the company ownership of one of Kerala’s well-known premium resorts and strengthen its presence in one of the country’s most popular leisure destinations.

Located in Kumarakom on the banks of Vembanad Lake, the resort is known for its scenic backwater setting and attracts both domestic and international visitors. Spread across nearly 18 acres, the property includes rooms, villas, wellness facilities and recreational spaces designed for luxury travellers.

The acquisition is significant as it will become ITC Hotels’ first owned resort property in Kerala. The company plans to integrate the resort into its hospitality network and further improve guest experiences through its services and offerings.

ITC Hotels said the move is part of its long-term growth strategy, with a stronger focus on expanding in key tourism destinations across India. Kerala remains an important market due to its popularity among travellers seeking nature, wellness and backwater tourism experiences.

The announcement also came alongside the company’s latest financial results, where ITC Hotels reported a rise in quarterly profit. The hospitality company has been steadily expanding its footprint and aims to significantly increase the number of hotels and rooms under its portfolio over the coming years.

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ICICI Securities sees 21% upside in ITC Hotels shares

ICICI Securities, a leading brokerage firm, has recommended buying ITC Hotels shares. They have set a target price of ₹250 per share, suggesting the stock could rise about 21% from current levels. The main reasons are ITC Hotels’ good cash reserves, plans to open more hotels, and a growing number of managed properties.

Currently, ITC Hotels runs over 145 hotels with 13,600+ rooms across India. The company uses an asset-light model, meaning it focuses on managing or franchising hotels instead of owning all the properties. This helps them expand faster and use money efficiently. By 2030, ITC aims to have 220 hotels with more than 20,000 rooms, with managed hotels making up two-thirds of their properties.

The company already has 59 managed hotels in the pipeline, adding around 5,500 rooms, and is starting three new projects in Puri, Bhubaneswar, and Visakhapatnam, adding another 400+ rooms.

ICICI Securities expects ITC Hotels’ revenue to grow about 12% per year, and profits before tax and interest (EBITDA) to rise around 15% yearly until 2028. Margins are expected to improve from 34% to 37%. The company has net cash of around ₹1,700 crore, which gives it the flexibility to open new hotels and upgrade existing ones. Income from management fees is also expected to grow by 17% per year.

There are some risks. If hotel occupancy or room prices do not increase as expected, or if new hotels are delayed, growth could slow down.

Still, ICICI Securities believes ITC Hotels is a good investment, thanks to its strong balance sheet, smart expansion strategy, and efficient business model. The company is seen as one of India’s promising hotel chains with clear growth plans for the future.

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BAT trims ITC Hotels stake in major block deal

British American Tobacco (BAT) has carried out a significant stake sale in ITC Hotels, offloading around 187.5 million shares through a large block deal. The transaction raised close to ₹3,820 crore, valuing the shares at a floor price of ₹205.60 each.

With this sale, BAT’s shareholding in ITC Hotels drops sharply, from about 15.3% to nearly 6.3%. The sale was executed through an accelerated book-build process and attracted strong market interest, allowing BAT to complete the divestment quickly.

The stake sale forms part of BAT’s ongoing financial strategy. The company has stated that its direct investment in ITC Hotels is not strategically essential, especially after the hotel arm was separated from the parent company ITC Limited and listed as an independent entity earlier this year. BAT received its holding in ITC Hotels as part of that demerger.

The proceeds from the block deal will be used to reduce debt and help the company reach its targeted leverage ratio by 2026. BAT has been actively restructuring its balance sheet and has indicated that lowering borrowings is a priority.

The news created some pressure on ITC Hotels’ stock, which briefly dipped as the market absorbed the large supply of shares. Analysts, however, expect the overhang to ease now that a major stakeholder has completed its planned sale. Many also point to the company’s strong expansion pipeline and favourable hospitality sector trends as support for future performance.

The latest divestment also gives ITC Hotels more room to move forward with its long-term plans under a more diversified shareholding structure, while BAT streamlines its global portfolio and focuses on strengthening its core business.

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