The Indian Hotels Company, India’s largest listed hospitality firm, has fallen nearly 13% YTD, while EIH Ltd. is down almost 17%. Lemon Tree Hotels and Chalet Hotels have also dropped by over 10% and 7%, respectively. Notably, Praveg Ltd. has emerged as the worst performer, plunging nearly 30% in the same period.
This comes despite these companies reporting double-digit revenue growth in FY25, supported by rising Average Room Rates (ARRs), improving occupancy, and a strong wave of weddings and events.
In contrast, newly listed ITC Hotels Ltd. has bucked the trend, gaining over 21% since its listing in January.
Live Events
Positive sector outlook for FY26
Brokerage firm Motilal Oswal remains optimistic about the hospitality sector’s growth prospects heading into FY26. A strong performance in Q4FY25, which saw the sector report 19% revenue and 24% EBITDA growth, has laid the foundation for sustained momentum in the months ahead.According to Motilal’s recent channel checks, key hotel players are expected to witness 11–12% year-on-year RevPAR growth in Q1FY26, driven primarily by 10–11% ARR gains, as occupancy rates remain elevated.“The hospitality sector is expected to sustain strong momentum in Q1FY26, led by a diversified MICE mix—weddings, spiritual tourism, and a strong pipeline of large-format live events,” the report noted.
The surge in India’s live entertainment economy—alongside higher wedding muhurat days and resurgent spiritual tourism—is seen as a key structural tailwind. Large-scale concerts and sporting events have led to sharp spikes in occupancy and pricing power across key markets like Mumbai, Ahmedabad, Delhi NCR, and Hyderabad.
Valuations offer opportunity?
Despite the short-term correction in stock prices, Motilal Oswal maintains a BUY rating on Indian Hotels (target price: Rs 940) and Lemon Tree Hotels (target price: Rs 200). The brokerage believes these companies are well-positioned to benefit from long-term demand drivers, including a favourable demand-supply dynamic, corporate travel recovery, and continued infrastructure development in Tier-2 and spiritual destinations.
With a strong pipeline of events, increasing ARR trends, and easing seasonal headwinds, the broader hospitality industry could see sentiment improve. Whether this translates into a catch-up rally in underperforming hotel stocks remains to be seen—but sector tailwinds appear firmly in place.
(Data Inputs – Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
