Morgan Stanley maintained an "overweight" call on Indian Hotels as it expects the hotelier’s margins to rise in the current market cycle. 

What The Brokerage Said: Morgan Stanley, along with their bullish call, also raised the target price to ₹759 from ₹595, indicating a 27% upside.

The research firm indicates that there are multiple tailwinds for demand while supply addition is slow. The company's share increase in capital-light businesses would also be a margin tailwind, according to the brokerage firm. 

Morgan Stanley expects the margin to remain above the management target of 33%. According to the brokerage, domestic luxury spending will rise ahead of economic growth and the number of foreign tourist arrivals should increase with new airports being built at Delhi and Mumbai. 

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Indian Hotels has a total of 340 hotels with 228 hotels in operational and 112 in the pipeline. The Taj Group with 121 hotels has the most among the subgroups. 

In FY24, Indian Hotels signed 53 hotels and opened 34 new locations. The company has signed more than 180 hotels in the last six years. 

In September, Motilal Oswal picked Indian Hotels and Lemon Tree Hotels as its preferred pick in the hospitality sector. The brokerage noted that Indian Hotels had the strongest inventory pipeline with 14,516 rooms.

Price Action: Shares of Indian Hotels rose 1.58% to ₹677.55  on Friday. 

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