Is ITC Hotels Overvalued or Undervalued Right Now?

ITC Hotels CMP Rs 161.36 (31 Aug 2026), up 0.79%. PE 38.43 vs industry PE 36.92. ROE 7.01%. 52W range Rs 137.30 to Rs 253.67.

Is ITC Hotels overvalued or undervalued right now is a question worth asking given how its price to earnings ratio compares with the rest of its sector. At the current market price of Rs 161.36, the stock trades roughly 36.4% below its 52 week high of Rs 253.67 and about 17.5% above its 52 week low of Rs 137.30.

ITC Hotels’s share price moved up 0.79% in Monday’s session to Rs 161.36, against a market capitalisation of Rs 33,380 Cr. This article looks at the numbers, the PE ratio, price to book, return on equity, debt levels and recent earnings trends, that determine whether the current price reflects fair value or a stretched multiple, and works through the full ITC Hotels overvalued or undervalued picture step by step.

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ITC Hotels Overvalued or Undervalued: Valuation Metrics

The headline number here is the price to earnings ratio. At 38.43, the ITC Hotels PE ratio is 1.04 times the industry average of 36.92. Measured against its hotels and hospitality sector peers, the gap widens further on other measures too: a P/B of 2.86 against a sector average of 4.08, and an ROE of 7.01% against a sector average of 13.68%. This table alone is not enough to settle whether ITC Hotels overvalued or undervalued is the fair read, but it is the starting point for the rest of this analysis.

Is ITC Hotels Overvalued or Undervalued Based on Its P/E Ratio?

Based on the P/E ratio alone, ITC Hotels looks fairly valued. The stock’s PE of 38.43 sits close to the industry average of 36.92, which suggests the market is pricing the business roughly in line with its sector rather than at a premium or a discount. That leaves the question of ITC Hotels overvalued or undervalued more dependent on its growth trajectory than on the PE ratio itself.

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ITC Hotels’s Financial Growth and Profitability

ITC Hotels’s revenue moved from Rs 3,627.84 crore in FY2025 to Rs 4,331.34 crore in FY2026, a change of 19.4%. Net profit grew from Rs 637.64 crore to Rs 821.26 crore over the same period, a swing of roughly 28.8%.

The ITC Hotels share price has moved alongside this earnings trend, which is part of why the stock now trades at 1.04 times the industry PE of 36.92 rather than a flat multiple.

These growth numbers feed directly into the ITC Hotels overvalued or undervalued question, since a rich multiple is easier to justify when profit growth is accelerating than when it is flat or falling.

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ITC Hotels Overvalued or Undervalued: The Case for Overvalued

Before getting to the bullet points, it helps to frame the ITC Hotels overvalued or undervalued question in terms of what would make the bear case right.

• Low dividend yield: At 0.00%, the stock offers little income cushion if the growth story slows.
• Limited margin of safety: At Rs 161.36, the stock is only 36.4% below its 52 week high of Rs 253.67, leaving less room for error if earnings disappoint.

ITC Hotels Overvalued or Undervalued: The Case Against It

The other side of the ITC Hotels overvalued or undervalued debate rests on the quality metrics below.

• Low leverage: A debt to equity ratio of 0.01 gives ITC Hotels a comparatively strong balance sheet.
• 52 week range context: At Rs 161.36, the stock is 17.5% above its 52 week low of Rs 137.30, showing it has already found some support at lower levels.

Verdict: Is ITC Hotels Overvalued or Undervalued Right Now?

On balance, ITC Hotels looks fairly valued rather than clearly overvalued or undervalued. Its PE of 38.43 sits close to the industry average of 36.92, and its 7.01% ROE and other ratios do not point to a significant mispricing either way. The more useful question for investors from here is less about the current multiple and more about whether earnings growth accelerates or slows. On the specific question of ITC Hotels overvalued or undervalued, the current evidence does not lean strongly either way.

What Could Change Whether ITC Hotels Is Overvalued or Undervalued?

Two broad scenarios could shift this valuation call on ITC Hotels in either direction. On the upside, an improvement in return ratios or growth that pushes the stock’s PE of 38.43 toward a premium over the industry average of 36.92. On the downside, a deterioration in the numbers that pulls the PE below the industry average of 36.92 instead. Investors watching the ITC Hotels share price over the next few quarters should track whether reported ROE holds near 7.01% and whether the PE gap versus the industry average of 36.92 widens or narrows, since both will matter more to the eventual answer on ITC Hotels overvalued or undervalued than the current price point on its own.

Conclusion

ITC Hotels’s numbers point to a stock that is fairly valued on headline multiples. Investors tracking the ITC Hotels share price should watch whether earnings growth can keep pace with the current PE of 38.43, since that gap remains the single biggest variable in whether the stock is undervalued, fairly priced, or overvalued from here. For anyone still weighing ITC Hotels overvalued or undervalued as a one-line takeaway, the multiples say fairly valued while the return ratios offer partial support for the current price. This article is for informational purposes only and is not investment advice.

ITC Hotels Overvalued or Undervalued: FAQs

Is ITC Hotels overvalued or undervalued right now?

Ans. Based on a PE ratio of 38.43 against an industry average of 36.92, ITC Hotels currently looks fairly valued on relative valuation. Its 7.01% ROE is an important part of the ITC Hotels overvalued or undervalued picture alongside the PE ratio.

What is ITC Hotels’s current PE ratio?

Ans. ITC Hotels’s price to earnings ratio stands at 38.43, compared with an industry average PE of 36.92. This PE gap is the main input into the ITC Hotels overvalued or undervalued call made in this article.

What is ITC Hotels’s return on equity?

Ans. ITC Hotels generates a return on equity of 7.01%, against a sector average of 13.68% among hotels and hospitality peers.

What is ITC Hotels’s 52 week high and low?

Ans. ITC Hotels’s 52 week high is Rs 253.67 and its 52 week low is Rs 137.30. The stock currently trades around Rs 161.36, roughly 36.4% below its high.

Does ITC Hotels have high debt?

Ans. ITC Hotels carries a debt to equity ratio of 0.01, which is low for its sector.

What is ITC Hotels’s dividend yield?

Ans. ITC Hotels offers a dividend yield of 0.00% at the current share price.

Is ITC Hotels a good stock to buy at current levels?

Ans. ITC Hotels’s current valuation suits investors who agree with the fairly valued read on its PE ratio and are comfortable with the trade-off between its return ratios and its price. This is for informational purposes only and is not investment advice.

What is ITC Hotels’s price to book ratio?

Ans. ITC Hotels trades at a price to book ratio of 2.86, compared with a sector average of 4.08 among hotels and hospitality peers.

What is the simplest way to summarise ITC Hotels overvalued or undervalued?

Ans. On PE alone, ITC Hotels is fairly valued against its industry average of 36.92. Layer in the 7.01% ROE and the answer to ITC Hotels overvalued or undervalued becomes more nuanced than the headline multiple suggests on its own.