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Informist, Friday, Oct. 24, 2025

By Avishek Rakshit

MUMBAI – The ongoing uptick in the tourism sector, increased revenue from the foods and beverages business, and a strong revenue growth owing to increase in average room rates led ITC Hotels Ltd. to report a substantial surge in its consolidated net profit for the September quarter.

The company, which was recently demerged from diversified conglomerate ITC Ltd. on Jan. 1 reported a 74% on-year increase in its consolidated net profit for the September quarter at INR 1.3 billion. The consolidated revenue increased nearly 8% on year to INR 8.4 billion during the quarter under review. ITC Hotels had reported a net profit of INR 761 million on revenues of INR 7.8 billion in the year-ago quarter. In the June quarter, its net profit was INR 1.3 billion and revenues were INR 8.1 billion.

The hotelier's revenue per available room, or RevPAR as is commonly known in the hotels industry, rose 9% on year to INR 8,100 and occupancy increased to 72% in the September quarter compared with 70% in the year-ago quarter. Average daily room rates were up at 6% on year driven by robust performance in the retail, corporate and events segments. ITC Hotels' food and beverages revenue grew 5% on a high base driven by outlets and banqueting.

The hospitality sector faced seasonal softness during the quarter, which was further impacted by heavy monsoon rains that dampened travel sentiment and leisure mobility in July and August. A lower number of auspicious dates in the quarter also affected the wedding segment, ITC Hotels said in a statement.

However, demand rebounded in September with longer weekends and early festive activity, reaffirming the sector's medium- to long-term resilience. Recent policy measures, including GST rate rationalisation and monetary policy easing, are expected to boost consumer spending going forward, the hotelier said.

The company's other expenses increased over 4% on year and other cost overheads like expenses on food and beverages procurement and depreciation and amortisation expenses rose marginally. Employee benefit expenses increased 8% on year. Effectively, total costs increased by over 4% on year to nearly INR 7 billion.

The hotels business currently accounted for the entire revenue and the company incurred some losses from the real estate business. ITC Hotels is currently constructing super premium branded residences in Colombo in Sri Lanka and the revenue from the real estate vertical will be recognised upon completion of the sale of the same. The real estate business accounts for 11% of ITC Hotels' assets and 13.5% of its total liabilities.

Although the company's net profit increased on a consolidated basis, the profit from its joint ventures and associates declined 11% on year to INR 35 million.

ITC Hotels' consolidated EBITDA for the September quarter increased 16% on year to INR 2.5 billion, up 16% on year, and the EBITDA margin increased by 215 basis points at 31% driven by growth in room and food and beverages revenue, higher management fees, structural cost interventions and operating leverage. ITC Ratnadipa in Sri Lanka turned EBITDA positive during the quarter under review.

During Apr-Sept, its consolidated net profit increased over 63% on year to INR 2.7 billion and consolidated sales increased 11.5% on year to INR 16.6 billion.

During the quarter, the company signed new hotels in Patna, Hyderabad, Tirupati, Wayanad, Nellore, and Mantralayam. During Apr-Sept, 15 hotels were signed totalling approximately 1,500 keys, while four new openings added 281 operational keys. ITC Hotels, which currently has a portfolio of 207 hotels with 146 operational and 61 in the pipeline, is targeting more than 35 signings for new hotels in 2025-26 (Apr-Mar). As of Sept. 2024, it had 201 hotels.

Supply-demand mismatch in the hospitality sector is expected to persist in the medium to long term, with demand--particularly in premium and leisure segments--outpacing available inventory. Backed by robust domestic travel, evolving consumer preferences, and continued government focus on tourism infrastructure, the sector remains well-positioned for expansion, ITC Hotels said, adding that the outlook for the second half of FY26 remains positive, with strong fundamentals and rising discretionary spending expected to drive business in the hospitality sector.

On Friday, shares of ITC closed 0.5% higher at INR 221.94 on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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