Thu Jan 02 04:03:29 UTC 2025: ## ITC Hotels Demerger: Centrum Broking Maintains ‘Buy’ Rating on ITC Ltd.

**MUMBAI, Jan 2, 2024** – Following the effective demerger of ITC Hotels on January 1st, Centrum Broking has reaffirmed its “Buy” rating for ITC Ltd. The brokerage firm believes the reorganization will allow ITC Hotels to attract investors and strategic partners better aligned with the hospitality industry, leading to a sharper focus and improved cost structure.

Centrum projects strong growth for ITC Hotels, forecasting a 13.8% revenue CAGR (compound annual growth rate) between FY24 and FY27, with a 35% EBITDA margin driven by increasing domestic demand. They estimate the value of ITC Hotels at Rs 36 per share, leading to a Rs 17 per share adjustment for ITC Ltd. This, combined with a positive outlook on the demerger, results in a revised target price of Rs 583 for ITC Ltd.

ITC Hotels currently operates 140 properties with over 13,000 rooms and aims to expand to over 200 hotels and 18,000 rooms by 2030. Centrum estimates ITC Hotels’ equity value at around Rs 200 per share, although other brokerages predict a price discovery between Rs 150-175 per share in the special pre-open session on January 6th.

While Centrum acknowledges a potential risk stemming from British American Tobacco’s (BAT) 15% holding in ITC Hotels, they remain optimistic about the demerger’s long-term benefits. Other brokerages, such as Systematix, hold a more neutral stance, maintaining a “Hold” rating on ITC with a target price of Rs 500, pending further company disclosures. Antique Stock Broking also issued a “Buy” recommendation with a target price of Rs 563 before the demerger.

Read More