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Hotel stocks could remain in focus ahead of the Diwali and holiday season, with JM Financial maintaining a constructive view on the sector on the back of resilient domestic travel demand, favourable demand-supply dynamics and sustained pricing power. According to the brokerage, the hotel industry’s RevPAR (revenue per available room) is expected to grow 12–13% year-on-year in Q2 FY27, extending the momentum seen in the previous quarter. The growth is expected to be driven by resilient discretionary spending on leisure, staycations and social events, along with robust MICE demand and sustained corporate travel. JM Financial’s channel checks suggest that Delhi-NCR could emerge as the standout market in Q2 FY27, supported by an uptick in demand around the 2026 BRICS summit. Mumbai, meanwhile, is expected to benefit from robust corporate and event-led demand, including GFF 2026. The brokerage said business on the books for October 2026 remains healthy, setting the sector up for a seasonally strong second half of FY27. Demand momentum is expected to remain firm through the rest of the year, supported by a strong events pipeline, a favourable wedding season and resilient domestic leisure demand. JM Financial noted that the number of auspicious wedding dates is expected to be higher this year, with more than 90 days in FY27 compared with around 70 days in FY26. Among the companies under its coverage, JM Financial expects Leela Hotels to post the highest same-store RevPAR growth of 15–16% in Q2 FY27, followed by IHCL at around 14%. The brokerage expects Leela to remain a clear outperformer, with revenue growth of 22% YoY, supported by industry-leading RevPAR growth of around 16% and a 13% rise in average room rates (ARR). For Leela Hotels, JM Financial has rolled forward its valuation to September 2027 while retaining its target multiple of 20x. This has resulted in a revised target price of ₹685, up from ₹610, with the brokerage maintaining its ‘Buy’ rating. JM Financial expects ITC Hotels to report revenue and EBITDA growth of around 15% and 18%, respectively, supported by the ramp-up of newer properties. Domestic RevPAR is expected to grow around 10% YoY. For Lemon Tree Hotels, the brokerage expects occupancy to improve by around 370 basis points YoY, while ARR is estimated to rise 6%. Revenue and EBITDA are expected to grow 14% and 16%, respectively. “Our preferred picks in the space are Leela, Lemon Tree and ITC Hotels,” JM Financial said, citing healthy domestic travel demand, favourable demand-supply dynamics and sustained pricing power. The brokerage expects most companies under its coverage to report year-on-year EBITDA margin expansion in Q2 FY27, supported by a favourable revenue mix. Brigade Hotels is expected to see the strongest margin expansion of 345 basis points, while Chalet Hotels could see margins improve by 189 basis points, according to JM Financial. For the broader sector, the brokerage remains positive on the demand outlook, although it flagged some risks. JM Financial said a moderation in ARR growth could pose a risk, particularly as room rates are already 40–45% above pre-Covid levels. An unexpected sharp slowdown in the economy and renewed geopolitical escalation that affects domestic or inbound travel demand are other key risks to its outlook. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. 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