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ITC Hotels, the standalone hospitality entity spun off from ITC Ltd., has posted an impressive set of results for the first quarter of FY 2026 (April–June 2025). Consolidated net profit surged 54 % year-on-year to ₹133 crore, up from ₹87 crore in the same period last year. Revenue climbed 15.5 % to ₹815–816 crore, driven by strong performances in room occupancy and food & beverage services.

Quarterly Highlights

  • Net profit (PAT): ₹133 crore, up 54 % YoY .
  • Revenue: ₹815–816 crore, up 15.5 % YoY .
  • EBITDA: ~₹246 crore, rising 19 % YoY; margin improved to 30 %.
  • Hotel segment revenue: ₹801 crore, up 16 % YoY.
  • Expenses: ₹672–675 crore, 13 % higher YoY but 10 % lower QoQ.

On a sequential basis, profit dropped 48 %, from ₹257 crore in Q4 FY 25, due to seasonality and a 23 % fall in revenue compared to the previous quarter’s ₹1,061 crore.

“Geopolitical developments in May temporarily disrupted business, but the sector rebounded strongly thereafter,” the company stated.

Market Reaction

Boosted by robust numbers, ITC Hotels shares rallied approximately 5–7 %, peaking around ₹244.50 on the BSE before settling near ₹239–241. The rally reflects growing investor confidence in the standalone entity’s growth trajectory.

Business Drivers

  1. Recovery in travel demand: As domestic and global travel rebounds, occupancy rates and average room revenues have surged.
  2. Higher food & beverage sales: Post-pandemic dining revival boosted revenue per guest.
  3. Operational efficiency: Margins improved through effective cost control, despite YoY expense growth.
  4. Demand resilience: Despite May setbacks from geopolitical issues, demand quickly regained momentum .

Outlook & Growth Initiatives

  • Expansion pipeline: The company plans to open 50 new hotels (4,500 keys) via brownfield and management contracts, targeting a portfolio of 220 hotels and 20,000 keys by 2030.
  • Real estate ventures: No revenue was recorded from realty this quarter, although ultra-luxury residences in Colombo are underway; income will flow once completed.
  • Industry tailwinds: With domestic travel demand expected to outpace supply and rising foreign tourist arrivals, ITC Hotels is well-positioned to capitalize.

Analyst Take

  • Room revenue strength: Room sales, contributing 52 % of total revenue, rose 16 % YoY.
  • Margin improvement: EBITDA margin uptick reflects both solid topline growth and disciplined cost control.
  • Strategic leverage: Existing brand strength, expansion plans, and cost efficiencies should support sustainable profit growth.

What to Watch Next

  • Sequential Q2 performance: Strong summer and festival travel could help recoup Q4 seasonality decline.
  • New hotel openings: Timely commissioning of under-construction properties will be key to future revenue streams.
  • Real estate development: Colombo luxury residences completion will add a new revenue dimension.
  • Macro trends: India’s overall hospitality recovery, infrastructure growth, and inbound tourism will influence future quarters.

Summary

ITC Hotels’ Q1 FY 26 financials reflect a robust rebound post its demerger. A 54 % jump in net profit and strong revenue growth underline operational strength. Investor optimism was reflected in a 5–7 % stock surge. With expansion plans, rising travel demand, and real estate diversification underway, ITC Hotels is poised for sustained growth.

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