ITC Hotels Ltd., one of India’s premier hospitality chains and a newly demerged entity from ITC Ltd., reported a stellar performance for the second quarter of FY26. The company posted its highest-ever Q2 revenue and profits, with a consolidated net profit of Rs. 133 crore, a massive 74% year-on-year (YoY) jump. This strong bottom-line growth was achieved despite a seasonally soft quarter for the travel industry, highlighting the success of the company's "asset-right" strategy and disciplined operational execution.
Revenue from operations for the quarter ending 30 September 2025, rose 8% YoY to Rs. 839.5 crore. The strong results were met with a positive market response, reaffirming investor confidence in the focused hospitality company's growth trajectory post-demerger.
Table of Contents
- How Did ITC Hotels Perform in Q2 FY26?
- What Drove the Strong Profit Surge?
- Expansion and Brand Development in Q2
- The Investor’s Bottom Line: Key Takeaways from a Record Quarter
- Frequently Asked Questions (FAQs)
How Did ITC Hotels Perform in Q2 FY26?
ITC Hotels' Q2 results demonstrate strong operational momentum and significant margin expansion. The company's EBITDA rose 16% YoY to Rs. 246 crore, with EBITDA margins expanding by 215 basis points to 31%, its highest ever for a second quarter.
Key Financial Highlights for Q2 FY26
/content-assets/82b9904ed126458fb2534ab8efd0aebb.png)
The results show that despite seasonal softness, the company was able to drive profitability through efficient cost management and strong pricing power. Average Daily Rates (ADRs) grew by 6%, and occupancy expanded by 254 basis points, leading to a robust 9% increase in standalone Revenue per Available Room (RevPAR).
What Drove the Strong Profit Surge?
The remarkable 74% YoY jump in net profit was powered by several key factors:
-
Asset-Right Strategy: The company's continued focus on expanding through management contracts and franchises, rather than owning all its properties, has significantly improved its return on capital.
-
Operational Efficiency: Structural cost-control measures have led to a leaner operation, directly contributing to the expansion of EBITDA margins.
-
Strong Brand Equity: The power of the ITC brand portfolio allowed the company to command a 40% RevPAR premium over the industry average, showcasing its strong pricing power.
-
F&B and Banquets: The Food & Beverage (F&B) vertical posted a healthy 5% YoY growth, supported by strong demand for its culinary offerings and banquet services.
Expansion and Brand Development in Q2
ITC Hotels continued to expand its footprint across India during the quarter, with a clear focus on asset-light growth. Key developments include:
-
Launch of a New Brand: The company launched the "Epiq Collection Member ITC Hotels Group," a new premium brand aimed at culturally rich destinations. Two properties are already under development in Puri and Tirupati, with plans to add around 1,000 rooms under this brand in the medium term.
-
Network Expansion: The company entered the Kerala market with a Fortune hotel in Kochi and signed a new luxury ITC Hotel in Patna. The development pipeline remains robust, with over 60 hotels and 5,900 keys under development across its various brands.
The Investor’s Bottom Line: Key Takeaways from a Record Quarter
ITC Hotels’ Q2 results reaffirm the strength of its strategic shift towards an asset-right model and its strong operational discipline.
-
Record Performance: The company delivered its highest-ever Q2 revenue and profit, a significant achievement in a seasonally weak quarter.
-
Margin Expansion: The 215 basis point expansion in EBITDA margin to 31% is a clear indicator of improving profitability and efficiency.
-
Strong Growth Pipeline: With 5,900 keys in the development pipeline and a new premium brand, the company has a clear path for future growth.
-
Demerger Paying Off: The performance post-demerger highlights the benefits of a focused management team and independent capital allocation strategy, which has been well-received by the market.
Frequently Asked Questions (FAQs)
1. What were ITC Hotels’ Q2 FY26 net profit and revenue?
ITC Hotels reported a net profit of Rs. 133 crore (up 74% YoY) and revenue from operations of Rs. 839.5 crore (up 8% YoY).
2. What was the company's EBITDA margin in Q2?
The EBITDA margin expanded significantly by 215 basis points to 31%, the highest ever for a second quarter.
3. What is the "asset-right" strategy?
This is a business model where a hotel company focuses on managing and franchising properties rather than owning them. This reduces the need for heavy capital investment and improves return on capital.
4. What new brand did ITC Hotels launch?
The company launched the "Epiq Collection," a new premium brand targeting culturally significant destinations. Projects are already underway in Puri and Tirupati.
5. How has the ITC Hotels stock performed since the demerger?
The stock has seen a positive response from the market. After the strong Q2 results, brokerages like Elara Capital upgraded the stock to a 'BUY' rating with a target price of Rs. 266, reflecting confidence in its growth story.