The Indian Hotels Company Limited (NSE:INDHOTEL) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Indian Hotels beat revenue expectations by 5.0%, at ₹25b. Statutory earnings per share (EPS) came in at ₹2.46, some 6.6% short of analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Indian Hotels' 29 analysts is for revenues of ₹112.7b in 2027. This would reflect a credible 5.1% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 6.2% to ₹16.49. Before this earnings report, the analysts had been forecasting revenues of ₹110.4b and earnings per share (EPS) of ₹16.00 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
View our latest analysis for Indian Hotels
Despite these upgrades,the analysts have not made any major changes to their price target of ₹872, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Indian Hotels analyst has a price target of ₹966 per share, while the most pessimistic values it at ₹744. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Indian Hotels' revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2027 being well below the historical 24% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 19% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Indian Hotels.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Indian Hotels' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Indian Hotels. Long-term earnings power is much more important than next year's profits. We have forecasts for Indian Hotels going out to 2029, and you can see them free on our platform here.
Even so, be aware that Indian Hotels is showing 1 warning sign in our investment analysis , you should know about...
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