ITC Hotels jumps 6%, hits new high on strong Q1 nos; m-cap tops ₹50,000 cr

Business Standard

2 days ago

ITC Hotels share price today
Shares of ITC Hotels rallied up to 6 per cent to hit a new high at ₹242.15 on the BSE in Wednesday's intra-day trade after the company reported strong earnings for the quarter ended June 2025 (Q1FY26).
ITC Hotels, which recently was demerged from ITC Limited, began trading in the stock markets on January 29. The stock has bounced back 53 per cent from its 52-week low of ₹158 touched on February 25, 2025.
A sharp rally in stock price has seen the market capitalisation of ITC Hotels touch ₹50,000 crore for the first-time ever today. At 02:27 PM; the company's market capitalisation stood at ₹50,011 crore, the BSE data shows. Indian Hotels Company tops the list of stocks in the hotel sector with a market capitalisation of ₹1.07 trillion.
The average trading volumes on the counter jumped over three-fold, with a combined 14.73 million shares changing hands on the NSE and BSE.
ITC Hotels today reported a healthy 53.4 per cent year-on-year (YoY) rise in consolidated net profit at ₹133.71 crore in the first quarter of financial year 2025-26 (Q1FY26). The company had posted a net profit of ₹87.16 crore in the same period last year. Its revenue from operations rose 15.5 per cent to ₹815.54 crore from ₹705.84 crore a year ago. Profit before interest, depreciation and tax (PBIDT) rose 33 per cent year-on-year to ₹296.95 crore from ₹223.18 crore.
Meanwhile, ITC Hotel's presence has expanded to Tier 2 and 3 cities, where demand for premium hospitality is rapidly increasing. The business continues to witness growing interest amongst property owners to partner with its iconic brands resulting in healthy generation of leads and pipeline of management contracts. The company has a robust pipeline of 50 hotels with over 4,500 keys with high salience of brownfield assets and targets a portfolio of 220 operational hotels with over 20,000 keys by 2030.
Industry/Company outlook
The Indian hospitality sector has started FY2026 on a strong footing, with Q1FY26 Revenue per Available Room (RevPARs) seeing double-digit growth despite the Indo-Pak conflict impacting demand for some days in May 2025.
The outlook for Q2FY26 remains positive, supported by a lineup of events and seasonal demand drivers across India. A cluster of long weekends in August (Raksha Bandhan, Independence Day, Janmashtami, and Ganesh Chaturthi) is likely to support leisure travel across leisure destinations, analysts at Elara Capital said in the quarterly preview.
ICICI Securities view on ITC Hotels
ITC Hotels has a debt free balance sheet with cash reserves of ₹1,750 crore. With efficient capital allocation, investing 8-10 per cent of revenues (₹350- 450crore) for capex on renovation/on-going projects, the cash flow generation is expected to be strong in the coming years. The company can utilise it for inorganic initiatives and reward shareholders with good dividend payout in the coming years.
ITC Hotels derives ~40 per cent of its revenues from F&B business, highest amongst the listed peers with F&B revenue contribution of 13- 35 per cent. ITC hotels F&B business revenues grew at a CAGR of 13 per cent over FY23-25 to ₹1,410.30 crore. With higher room demand, increasing footfalls in the restaurants and higher demand from conferences/events the F&B business revenues to grow at a CAGR of 19 per cent over the next three years, the brokerage firm said.
Strong portfolio brands, sturdy balance sheet and efficient capital allocation makes ITC Hotels a formidable play in the hospitality space. ICICI Securities expects its revenues/EBIDTA/PAT to grow at CAGR of 15 per cent/19 per cent/29 per cent over FY25-28E. The brokerage firm has a Buy rating on the stock with a price target of ₹261 (valued at 30x FY27E EV/EBIDTA).