ITC Hotels Q1 FY26 Results (NSE: ITCHOTELS)
Signal: Margin expansion
The read
Q1FY26 results show healthy revenue growth (+14.8% YoY consolidated) driven by Hotels segment momentum and first-time Branded Residences revenue. Operating margin expanded ~133bps YoY through operating leverage (employee cost grew only +3.3% YoY vs revenue +14.8%). PAT growth (+36.1% YoY) benefited from higher other income and lower tax rate. Key concern: KLRPL acquisition adds ~₹80 Cr revenue but contributed a loss of ~₹16.6 Cr, depressing group PAT by ~9%. Other comprehensive income swung to -₹210 Cr (foreign currency translation loss on overseas subsidiary), producing negative total comprehensive income. Standalone performance shows 18.2% PAT growth on 8.7% revenue growth — operating leverage evident at the parent level too.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹936.02 Cr | 14.8% | -25.3% |
| Net profit | ₹181.91 Cr | 36.1% | |
| EPS | ₹0.87 | ||
| EBIT margin | 26.5% |
P&L walk
Revenue grew 14.8% YoY to ₹936 Cr, with Hotels segment up 10.1% YoY (₹881 Cr) and Branded Residences contributing ₹37.8 Cr (new segment — no YoY comp). Gross margin (rev less food/beverage) expanded ~40bps YoY to 90.5%; opex (employee+other) grew slower (+14.7%) than revenue, yielding EBITDA margin expansion of ~133bps YoY. Depreciation rose 1.8% YoY, finance cost +20.5% (low base). Other income increased to ₹58.5 Cr (+32.5% YoY). PAT ₹182 Cr (+36.1% YoY) — growth amplified by other income and lower effective tax rate (26.7% vs 29.2% YoY). Exceptional items nil. Comprehensive income swung to -₹28.5 Cr due to -₹210 Cr OCI (FX loss on overseas sub). EPS ₹0.87 in line with PAT.
Segments
Hotels segment is the primary driver (₹881 Cr revenue, +10.1% YoY; ₹176.5 Cr result, +22.9% YoY). Branded Residences (new segment after renaming from Real Estate) contributed ₹37.8 Cr revenue and ₹13.2 Cr result — profitable but down QoQ from ₹129.4 Cr/₹38 Cr in Q4. Others segment stable. Consolidated results include KLRPL (acquired May 2026) which added ~₹80 Cr revenue but had a loss of ~₹16.6 Cr, dragging group PAT.
Key positives
- Consolidated revenue grew 14.8% YoY to ₹936 Cr, with Hotels segment up 10.1% YoY.
- EBITDA margin expanded 133bps YoY to 26.5% on employee cost growing only +3.3% YoY (operating leverage).
- Consolidated PAT grew 36.1% YoY to ₹182 Cr; EPS ₹0.87 vs ₹0.64 (+35.9%).
- Branded Residences segment (renamed from Real Estate) generated ₹37.8 Cr revenue and ₹13.2 Cr segment profit in its first full quarter under new name.
- Standalone OPM expanded 227bps YoY, demonstrating strong cost control at the parent.
Key concerns
- KLRPL acquisition (May 2026) contributed ~₹80 Cr revenue but had a ~₹16.6 Cr loss, dragging group PAT by ~9%.
- Other comprehensive income swung to -₹210 Cr (primarily FX translation loss on overseas subsidiary), producing negative total comprehensive income of -₹28.5 Cr.
- Revenue sequentially declined 25.3% from Q4 peak (seasonal, but sharper than prior year's Q1 vs Q4 decline of 23.5%?).
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