ITC Hotels Limited DCF Valuation
ITCHOTELS · Consumer Services · Current price ₹162.34
ITC Hotels Limited cash-flow valuation
Our discounted cash flow (2-stage) values ITC Hotels Limited at ₹40 per share. Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path. It carries 60% of the weight in our published estimate of ₹115. A discounted cash flow is only as good as the cash-flow path it assumes, so the assumptions behind it are listed in full below.
Try your own assumptions
Prefer to build the discounted cash flow yourself? The DCF calculator below opens pre-filled with ITC Hotels Limited's reported free cash flow, net debt and share count, so you can set your own growth and discount rate.
How we got this fair value
Every number below is part of the same estimate for ITC Hotels Limited. Nothing here is a target price or a forecast of where the share price will go.
The inputs are thin or the models disagree sharply. This is our least reliable kind of estimate, so read the range rather than the single number.
Estimate range ₹40 – ₹126
Why this method for this business
The business is asset-light with a durable moat, making DCF and relative PE appropriate. Residual income adds a book-value lens for completeness.
The models behind the number
These methods disagree materially, so the estimate is their plain midpoint rather than a weighted blend. The disagreement is itself the finding.
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
kept despite sitting outside the ₹55-median band — ₹55 from another model is within 3.3×, so this is genuine disagreement, not a broken model; downweighted: 231% from committee consensus (₹55)
Book value plus the present value of returns earned above the 10.6% cost of equity
- Discounted cash flow (2-stage) is primary for asset-light businesses; residual income is secondary for book-value sensitivity; relative PE is used for multiple comparison
What was missing
- Lack of historical P/E data for own normalization
- Limited analyst coverage for multiple validation
What drives it
31 inputs, grouped by how strong each claim is
- FCF_0 (normalized)
- 724 ₹cr
- Net debt
- 74 ₹cr
- Sector-median P/E
- 41.46×
- Peers used
- 7
- EPS (TTM)
- 4.16 ₹/share
- ROE (normalized)
- 9.6%
- Book value / share
- 56 ₹
fcf_norm (median ≤5y positive)
gross debt (cash n/a)
peer-median
peer-median
computed
computed
reported
- Discount rate (r)
- 14.4%
- Beta
- 1
- Cost of equity
- 10.6%
COE (building-block)
bottom-up industry
building-block
- Stage-1 start growth
- 5.38%
- Fade shape
- gentle
- Terminal growth (g)
- 5.28%
- Stage-1 years
- 9 y
pat_cagr_5y
lifecycle Cash-Cow
macro terminal × quality premium
lifecycle Cash-Cow horizon
- Lifecycle stage
- Cash-Cow
- Quality premium
- 1.056×
- Term: quality
- -7.5%
- Term: growth
- -3.3%
- Term: capital_allocation
- +6.0%
- Term: financial_strength
- +10.0%
- Term: history
- +0.0%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
- Moat
- None
- Excess-return horizon
- 3 yrs
forecast engine (L20)
moat Narrow + capital allocation
quality 40/100 (weak/erratic returns) → discount
weak ~3% CAGR (ROCE 10% < 12% hurdle (growth not value-accretive)) → discount
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: effectively debt-free → premium
history: no reliable own-history P/E → not used
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
computed
computed
- Path
- FCFE
- Terminal-value fraction
- 0.474
- Premium vs sector
- +5.5%
- Fair-multiple confidence
- 39%
- Fair P/E
- 43.75×
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for ITC Hotels Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on ITC Hotels Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.