ITC Hotels vs EIH Ltd: Which Hotel Stock is the Better Bet? Q1 Earnings, Growth Strategy & Valuation Battle

The Indian hospitality sector is witnessing dynamic growth, driven by rising domestic travel and increasing demand for luxury experiences. In this context, ITC Hotels vs EIH Ltd represents a fascinating comparison of two prominent players, each showcasing distinct strategies and strengths. This article delves into how ITC Hotels vs EIH Ltd are navigating the evolving market, examining their portfolios, operations, financial performance, brand positioning, growth initiatives, and risk factors. By comparing these two industry giants, we will examine how each company creates value for its stakeholders and influences the future of India’s hospitality landscape.

Table of Contents

1. Company Overview
2. Brand Landscape and Portfolio
3. Business Model & Operations
4. Financial Performance: ITC Hotels vs EIH Ltd
5. Brand Positioning & Market Strategy
6. Industry Standing & Competition
7. Growth Drivers & Opportunities
8. Risks & Challenges
9. Conclusion

Company Overview

ITC Hotels Limited is among the fastest-growing hospitality chains in India. With a portfolio of 140+ operational properties and 13,400+ rooms, the company spans six distinctive brands across the luxury to mid-market spectrum. Including its pipeline, ITC Hotels has crossed 200 hotels with nearly 19,000 keys.

EIH Limited, operating under the Oberoi Group, focuses on the premium segment. As of June 2025, it has 3,733 keys in India and 408 international keys. Its portfolio includes The Oberoi and Trident brands, with a healthy pipeline of 25 new properties (2,033 keys) scheduled by 2030.

Brand Landscape and Portfolio

ITC Hotels Portfolio:

ITC Hotels offers a diversified portfolio across luxury, premium, and mid-market segments, combining heritage, lifestyle, and modern hospitality to cater to varied guest needs.

The ITC Hotels portfolio spans across segments, balancing luxury with mid-market offerings. Its flagship ITC Hotels brand leads with 16 properties and 4,789 keys, while Welcomhotel and Fortune contribute significantly in the upscale and mid-market space with 27 hotels (3,002 keys) and 57 hotels (4,263 keys) respectively. Niche brands like Mementoes, Storii, and WelcomHeritage add lifestyle, boutique, and heritage experiences. Altogether, ITC operates 143 hotels with 13,469 keys, and with its pipeline, the portfolio will expand to 201 hotels and nearly 19,000 keys, reflecting strong growth momentum.

EIH Ltd Portfolio:

EIH Limited focuses on the premium and luxury segment through its flagship brands, The Oberoi and Trident. The company operates 3,733 keys in India across major cities and leisure destinations, and 408 keys internationally in locations like Mauritius, Bali, Marrakech, and Egypt. Its pipeline of 25 new properties (2,033 keys) includes a mix of owned and managed hotels, balancing capital investment with operational efficiency while expanding its luxury presence strategically.

Business Model & Operations

1. ITC Hotels has a distinguished legacy spanning over five decades, pioneering India’s luxury and responsible hospitality landscape. The company’s business model focuses on being a leader in Indian hospitality, delivering exceptional service, culinary excellence, and embodying Responsible Luxury. Core Revenue Streams ITC Hotels below:

• Room Operations: Forms the primary revenue source, driving the bulk of the business.
   
• Food & Beverage Services: Significant contributor, leveraging award-winning restaurant brands and high-profile event catering.
   
• Management & Operating Fees: Earned from managed hotels under an asset-light model, supporting expansion with lower capital intensity.

2. EIH Limited (Oberoi Group) employs a business model centred on maximising Average Room Rate (ARR), rather than focusing primarily on occupancy. This strategy is based on the insight that growth in ARR generates a stronger flow-through to EBITDA, enhancing overall profitability. EIH’s operations are diversified across multiple revenue streams:

• Core Hotels – encompassing rooms and food & beverage services, which form the primary revenue source.
   
• Flight Catering Services – leveraging premium catering capabilities for domestic and international flights, where margins are typically higher.
   
• Rental Income – primarily from properties like the Oberoi Centre in Gurgaon, providing a steady non-core revenue stream.

Financial Performance: ITC Hotels vs EIH Ltd

This section highlights the key financial performance of ITC Hotels and EIH Ltd, showing revenue, expenses, profitability, and earnings per share. The comparison provides a clear view of how both companies are performing operationally and financially.

ITC Hotels:

Want to analyse how investors have responded to ITC Hotels’ expansion strategy and quarterly earnings? Review the latest ITC Hotels share price with updated charts and valuation ratios.

EIH Limited:

To assess EIH Ltd’s current market sentiment and performance, check the latest EIH share price with updated charts and valuation ratios.

1. Revenue Growth:

• ITC Hotels: Revenue from operations grew +15.6% YoY, indicating strong top-line growth driven by expanding operations and higher occupancy.
• EIH Ltd: Revenue grew +8.9% YoY, showing moderate top-line expansion compared to ITC Hotels.

2. Expense Management:

• ITC Hotels: Total expenses increased by +13.2%, slightly lower than revenue growth, contributing to margin expansion.
• EIH Ltd: Total expenses rose +5.3%, lower than revenue growth, indicating operational efficiency.

3. Profitability (EBITDA & PAT):

• ITC Hotels: EBITDA rose +18.9%, and PAT increased +54.0%, showing strong operational leverage and efficient cost management.
• EIH Ltd: EBITDA grew +16.1%, but PAT fell -61.9%, largely due to a one-time exceptional charge affecting the bottom line.

4. Profit Before Tax (PBT):

• ITC Hotels: PBT increased +53.7%, reflecting both strong revenue growth and disciplined expense control.
• EIH Ltd: PBT declined -59.7%, highlighting the impact of non-recurring items despite healthy EBITDA growth.

5. Earnings Per Share (EPS):

• ITC Hotels: EPS rose +56.1%, mirroring the substantial improvement in profitability.
• EIH Ltd: EPS dropped -63.3%, reflecting the impact of exceptional items on shareholder returns.

ITC Hotels demonstrates strong, balanced growth across revenue, profitability, and EPS, indicating robust operational performance and effective scaling.

EIH Ltd shows solid revenue and EBITDA growth, but bottom-line performance is volatile, affected by exceptional charges, highlighting sensitivity to one-off events.

Overall, ITC Hotels appears better positioned for capital-efficient expansion and sustainable profitability, while EIH Ltd continues to dominate the luxury segment but faces short-term pressure on its bottom line.

Brand Positioning & Market Strategy

ITC Hotels:

• Loyalty & customer engagement: Refreshed Club ITC programme offering tier-based benefits, instant rewards, and integrated F&B perks to enhance guest loyalty.
   
• F&B recognition: Signature brand Avartana gained international acclaim through a pop-up in France, showcasing culinary excellence.
   
• Responsible luxury: Positions itself as a sustainable luxury leader, holding the largest number of LEED Platinum® certifications globally, reinforcing brand differentiation.

EIH Ltd.:

• Premium pricing strategy: Focused on ARR maximisation, with domestic ARR rising from ₹13,772 to ₹16,268 YoY, while owned hotels achieved ₹17,941 ARR, demonstrating strong pricing power.
   
• Global brand recognition: Received #2 Best Hotel Brand in the World (Travel + Leisure, USA) and Best Hotel Group (Telegraph UK) in 2025, underlining its leadership in the luxury segment.
   
• Luxury positioning: Continues to emphasise exceptional guest experiences, premium offerings, and global brand equity.

Industry Standing & Competition

ITC Hotels:

• Commands a 34% RevPAR premium over the industry across Luxury, Upper-Upscale, and Upscale segments, reflecting strong pricing power and brand preference.
• Recognised as #5 in India’s Great Places to Work 2025, the only hotel company in the Top 10, highlighting strong employee engagement and organisational culture.

EIH Ltd.:

• Maintains a 20% RevPAR lead over competitors, with Q1 FY26 RevPAR at ₹11,350, up 16% YoY, demonstrating resilience and operational efficiency.
• The Oberoi brand led growth with a 21% RevPAR increase, outperforming the industry average of 12%, reinforcing its dominance in the luxury segment.

Want to trace how the stock has evolved since its market debut? Read ITC Hotels share price history for a detailed look at its listing-day performance, post-demerger momentum, and valuation re-rating.

Growth Drivers & Opportunities

ITC Hotels:

• Aggressive domestic expansion: Signed 8 new hotels (700 keys) in Q1 FY26, targeting Tier 2 & 3 cities where rising disposable incomes and domestic travel are creating strong demand.
   
• Strong pipeline visibility: Currently has 58 hotels under development (5,300+ keys), ensuring steady growth momentum in the coming years.
   
• Long-term scale target: Plans to operate 220 hotels with 20,000+ keys by 2030, reflecting a capital-efficient growth strategy and broader market penetration.
   
• Revenue diversification through asset-light model: Management fees are projected to grow 2.5x by FY30, highlighting the profitability potential of its managed hotel portfolio.
   
• International foray: Began overseas expansion with ITC Ratnadipa, Colombo, signalling the start of ITC Hotels’ ambition to become a globally recognised brand.

EIH Ltd.:

• Vision 2030 pipeline: Plans to double room count via 25 new properties, balancing iconic luxury hotels and strategically chosen domestic locations.
   
• Key landmark projects: Includes Oberoi London (2028), Trident Vizag (2027), and Oberoi Hyderabad (2029), enhancing both global presence and domestic footprint.
   
• Robust financial position: Maintains ₹1,154 Cr net cash, providing strong funding capability for expansions without significant leverage.
   
• Favourable market trends: Rising UHNI population and growth in inbound tourism are expected to sustain high demand in the luxury hospitality segment.
   
• Premium positioning advantage: Focus on ARR maximisation and luxury experiences ensures strong pricing power and brand equity over time.

There’s a valuable video by Markets by Zerodha Hindi discussing the latest trends shaping India’s hotel sector — a must-watch to understand the macro tailwinds behind players like ITC Hotels and EIH Ltd.

Risks & Challenges

ITC Hotels:

• Exposed to external risks such as geopolitical tensions, adverse weather, and regulatory changes affecting travel demand and operations.
• Rising competition from global and domestic hotel chains puts pressure on market share.
• Expansion of managed hotels carries execution risks, particularly in maintaining consistent service standards across locations.

EIH Ltd.:

• Sensitive to geopolitical disruptions (e.g., Operation Sindoor, Indo-Pak tensions) impacting international guest inflows.
• Faces staffing shortages in the luxury segment, potentially affecting service quality.
• Delays in managed hotel rollouts and regulatory hurdles may slow expansion.
• Profitability is volatile, with PAT often affected by exceptional or one-off charges.

Conclusion

Both ITC Hotels and EIH Ltd showcased strong top-line growth and industry leadership in Q1 FY26.

• ITC Hotels reported record revenues, strong profitability, and a clear Asset-Right growth model with aggressive expansion into Tier 2/3 cities. Its sustainability leadership and loyalty programme strengthen customer engagement.
   
• EIH Ltd posted its highest-ever Q1 revenue and EBITDA, though the bottom line was hit by a one-time charge. Its focus remains on luxury positioning and ARR maximisation, supported by strong liquidity and a robust Vision 2030 pipeline.

In summary, ITC Hotels appears better placed for rapid, capital-efficient expansion across segments, while EIH Ltd continues to dominate the premium luxury space with global recognition and a steady expansion pipeline.

Want to understand how ITC Hotels generates its earnings across rooms, F&B, and management contracts? Read ITC Hotels revenue streams for an in-depth view of its income diversification strategy.

FAQs

1. What is the main difference in business models?
   ITC Hotels uses a mix of asset-heavy and asset-light strategies, while EIH Ltd focuses on premium luxury and maximising Average Room Rate (ARR).
    
2. How do their portfolios compare?
   ITC Hotels: 140+ hotels, 13,400+ keys, expanding to 220 hotels by 2030.
   EIH Ltd: 4,141 keys (India + international), 25 properties in pipeline, focusing on the luxury segment.
    
3. Which company shows stronger financial performance?
   ITC Hotels has robust revenue (+15.6% YoY) and profit growth (+54% PAT YoY). EIH Ltd has good revenue and EBITDA growth but volatile PAT due to exceptional items.
    
4. What are the key growth drivers?
   ITC Hotels: Domestic expansion, pipeline visibility, asset-light model, international foray.
   EIH Ltd: Vision 2030 projects, ARR maximisation, landmark luxury properties, strong cash reserves.
    
5. What are the main risks for investors?
   ITC Hotels: Execution risks in managed hotels, competition, and external disruptions.
   EIH Ltd: Geopolitical sensitivities, staffing challenges, regulatory delays, PAT volatility.