India Tourism Development Corporation Ltd: Valuation Shift Signals Price Attractiveness Change

Valuation Metrics and Market Context

As of 12 February 2026, ITDC’s P/E ratio stands at 58.82, a figure that, while still elevated, marks a decrease from previous levels that had classified the stock as very expensive. The price-to-book value ratio remains high at 13.89, underscoring the premium investors are willing to pay for the company’s net assets. Other valuation multiples such as EV/EBITDA at 48.26 and EV/EBIT at 52.09 further illustrate the stretched nature of the stock’s pricing compared to earnings and operating cash flows.

These valuation levels contrast with the company’s robust return metrics, including a return on capital employed (ROCE) of 60.27% and return on equity (ROE) of 21.45%, which are indicative of strong operational efficiency and profitability. However, the dividend yield remains modest at 0.53%, suggesting limited income return for investors relative to the stock’s price.

Comparative Analysis with Sector Peers

When benchmarked against key competitors in the Hotels & Resorts industry, ITDC’s valuation remains on the higher side but shows signs of moderation. For instance, EIH Ltd trades at a P/E of 28.22 and EV/EBITDA of 19.57, while Chalet Hotels is priced at a P/E of 31.58 and EV/EBITDA of 18.44. Even the luxury segment player Leela Palaces Hotels commands a very expensive valuation with a P/E of 316.29, but with a significantly lower EV/EBITDA multiple of 26.54.

ITDC’s PEG ratio of 3.05, which adjusts the P/E for earnings growth, is higher than most peers, signalling that the stock’s price growth expectations may be ambitious relative to its earnings growth trajectory. This contrasts with Chalet Hotels’ PEG of 0.06 and Lemon Tree Hotels’ 1.15, which suggest more reasonable valuations in relation to growth.

Stock Price Performance and Market Returns

ITDC’s current share price is ₹548.15, down 1.16% on the day, with a 52-week trading range between ₹470.30 and ₹714.05. The stock has underperformed the Sensex over the year-to-date period, declining 6.32% compared to the benchmark’s 1.16% fall. Over the longer term, however, ITDC has delivered strong returns, with a 3-year gain of 61.34% and a 5-year return of 81.00%, both outperforming the Sensex’s respective 38.81% and 63.46% growth. The 10-year return of 255.71% is slightly below the Sensex’s 267.00%, reflecting the cyclical nature of the hospitality sector.

Mojo Score and Rating Dynamics

ITDC’s MarketsMOJO score currently stands at 36.0, reflecting a Sell rating that was upgraded from a Strong Sell on 15 December 2025. This upgrade signals a slight improvement in the company’s outlook, although the overall sentiment remains cautious. The market capitalisation grade is rated 3, indicating a mid-tier valuation relative to market size and liquidity considerations.

The rating adjustment aligns with the valuation grade shift from very expensive to expensive, suggesting that while the stock remains pricey, some risk premium has been alleviated. Investors should note that the downgrade in valuation severity does not imply undervaluation but rather a relative easing compared to prior extremes.

Sector Outlook and Investment Considerations

The Hotels & Resorts sector continues to face headwinds from fluctuating travel demand and macroeconomic uncertainties. ITDC’s strong ROCE and ROE metrics highlight operational resilience, yet the elevated valuation multiples imply that much of the company’s growth potential is already priced in. The modest dividend yield further emphasises the stock’s growth-oriented appeal rather than income generation.

Comparatively, peers such as Mahindra Holiday Resorts, rated as Fair with a P/E of 62.4, and Juniper Hotels, classified as Very Expensive with a P/E of 36.77, illustrate the broad valuation spectrum within the sector. ITDC’s position in this range suggests investors should weigh growth prospects against valuation risks carefully.

Investor Takeaway

For investors considering ITDC, the recent valuation adjustment offers a nuanced perspective. While the stock remains expensive on traditional metrics, the downgrade from very expensive to expensive may present a marginally improved entry point for those confident in the company’s long-term growth and sector recovery. However, the elevated P/E and P/BV ratios relative to peers and historical averages caution against aggressive positioning without a clear catalyst for earnings acceleration.

Given the company’s strong capital returns and market position, ITDC could appeal to growth-oriented investors with a tolerance for valuation risk. Conversely, value-focused investors may prefer to explore alternatives within the sector or broader market that offer more attractive multiples and dividend yields.

Ultimately, the stock’s performance will hinge on the Hotels & Resorts sector’s recovery trajectory, macroeconomic stability, and ITDC’s ability to sustain its operational efficiency amid competitive pressures.

Summary of Key Financial Metrics

To summarise, ITDC’s key valuation and performance indicators as of February 2026 are:

• P/E Ratio: 58.82 (Expensive)
• Price to Book Value: 13.89
• EV/EBITDA: 48.26
• PEG Ratio: 3.05
• Dividend Yield: 0.53%
• ROCE: 60.27%
• ROE: 21.45%
• Mojo Score: 36.0 (Sell)
• Market Cap Grade: 3

These figures reflect a company with strong profitability but stretched valuation multiples, necessitating careful consideration by investors in the current market environment.

Conclusion

India Tourism Development Corporation Ltd’s valuation shift from very expensive to expensive signals a subtle recalibration in market sentiment. While the company’s operational metrics remain robust, the premium pricing relative to peers and historical norms suggests limited margin for error. Investors should balance the company’s growth potential against valuation risks and consider sector dynamics before committing capital.

As the hospitality industry navigates ongoing challenges, ITDC’s performance and valuation will remain under close scrutiny, with future rating adjustments likely contingent on earnings delivery and broader economic conditions.

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