The Indian Hotels Company Limited (IHCL) has announced a strategic acquisition to strengthen its presence in the boutique hospitality segment. The company's Board of Directors approved the acquisition of a 51% stake in Brij Hospitality Private Limited for an aggregate amount not exceeding ₹225 crores on January 15, 2026.

Acquisition Structure and Investment Details

The acquisition will be executed through multiple definitive agreements including Share Subscription and Purchase Agreement, Share Purchase Agreement(s), and Shareholders' Agreement. IHCL will acquire the stake directly and through its step-down subsidiaries ANK Hotels Private Limited and Pride Hospitality Private Limited.

Target Company Profile and Performance

Brij Hospitality Private Limited, established in 2022 with its registered office in Jaipur, operates in the hospitality sector with a focus on boutique hotels. The company manages a portfolio of 22 hotels under the 'Brij' brand, including properties operating under Brij Anayra, BrijRama Palace, and Brij Bageecha. Currently, 11 hotels are operational within this portfolio.

The target company has demonstrated consistent growth in its financial performance over the past three years:

Strategic Objectives and Business Rationale

The acquisition aligns with IHCL's strategy to develop the boutique leisure segment across India while maintaining its capital-light growth approach. The transaction will add 22 hotels to IHCL's existing portfolio, with 11 properties currently operational and contributing to revenue generation.

This expansion into the boutique hospitality segment represents IHCL's continued focus on diversifying its hotel portfolio beyond traditional luxury and business hotels. The acquisition provides immediate access to established properties and the 'Brij' brand presence in the Indian hospitality market.

Related Party Transaction and Regulatory Aspects

The transaction qualifies as a related party transaction, as one of the seller shareholders of Brij Hospitality is related to a director of Pride Hospitality Private Limited, IHCL's step-down subsidiary. However, the company has confirmed that the transaction is being conducted at arm's length.

No governmental or regulatory approvals are required for completing this acquisition. The transaction is subject to fulfillment of certain condition precedents as outlined in the definitive agreements.

Timeline and Implementation

IHCL expects to complete the acquisition on or before March 31, 2026, or such other date as may be mutually agreed between the parties. The company has disclosed this acquisition under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring full compliance with regulatory disclosure requirements.

JPMorgan has adjusted its outlook on Indian Hotels Company Ltd, reducing the September 2026 price target while maintaining confidence in the hospitality major's long-term prospects. The global brokerage cut its price target to ₹805 from ₹890, citing near-term performance challenges but retained its Overweight rating on the stock.

Target Revision and Valuation Adjustments

The revised price target reflects weaker-than-expected performance in the first half of FY26 and broader valuation de-rating across the hospitality sector. Despite the reduction, the new target still implies potential upside of approximately 12.5% from current market levels.

JPMorgan has trimmed its FY26-FY28 earnings forecasts by 1-3% ahead of the company's third-quarter results. The brokerage also lowered the valuation multiple for Indian Hotels' standalone business to 30x EV/EBITDA, approximately 10% below the stock's 10-year average.

Market Leadership and Strategic Advantages

Despite the target cut, JPMorgan remains constructive on the stock, emphasizing Indian Hotels' dominant market position and strategic strengths. The company maintains its status as the largest listed player in India's hospitality sector with significant operational scale.

The brokerage highlighted that most new additions follow an asset-light approach, which supports return ratios and cash generation capabilities. This capital-efficient strategy positions the company favorably as investors increasingly value disciplined capital allocation.

Industry Dynamics and Growth Drivers

JPMorgan identified several structural tailwinds supporting Indian Hotels' medium-term growth trajectory. Low supply growth across the hotel industry, combined with steady demand patterns, continues to create a favorable operating environment.

Key growth drivers include:

• Expanding domestic tourism segment
• Rising MICE (Meetings, Incentives, Conferences, Exhibitions) demand
• Improving international operations performance
• Operating leverage benefits from scale advantages

Earnings Outlook and Performance Expectations

While JPMorgan expects some moderation in RevPAR (Revenue Per Available Room) growth following a strong performance run, the brokerage believes earnings upgrades should continue. The company's market leadership by revenue and volume share positions it well to outperform peers even as growth rates normalize.

The revised price target incorporates a sum-of-the-parts valuation methodology, with the domestic business valued at a discount to historical averages. JPMorgan noted this re-rating already accounts for softer near-term trends while maintaining upside potential as earnings visibility improves over time.