India's hospitality sector is entering a 'golden cycle' characterized by significant growth in average daily rates (ADR) and attractive investment returns, according to Nomura Asian Equity Research. The report highlights that while the supply of luxury hotels in key cities like Delhi NCR, Mumbai, and Bengaluru is projected to grow at only 6-7% annually due to high entry barriers, demand is likely to expand at a high-single to low-double-digit pace, fueled by increased spending from affluent Indians and corporate travel. The depreciation of the Indian rupee is further enhancing the appeal of Indian hotels to international travelers. Nomura's analysis indicates that Indian hotels remain under-penetrated compared to other Asia-Pacific cities, presenting a strong investment case. The brokerage estimates internal rates of return (IRR) for hotels in India to be attractive at mid-teen levels, supported by improving demand-supply dynamics and pricing power. Current sector valuations have cooled to 18x EV/EBITDA for FY27 and 15x for FY28 estimates, comparable to levels seen during previous industry downcycles. This stabilization, along with a projected 15% compound annual growth rate for EBITDA over FY26-28, indicates a promising outlook for investors in the hospitality sector.