Why Did ITC Hotels Shares Fall 5% Despite Reporting 36% YoY Profit Growth?

Synopsis: Hotel stock falls 5 percent despite reporting 36 percent YoY profit growth in Q1 FY27, as weaker sequential performance and lower comprehensive income weighed on investor sentiment.

The shares of this company, which operates hotels across 90+ destinations under brands like ITC Hotels, Mementos, Epiq Collection Storii, Welcomhotel, Fortune, and Welcome Heritage, came under pressure after posting Q1 numbers.

With a market capitalization of Rs 36,119 crore, ITC Hotels Ltd’s share on Thursday made a day low of Rs 173.20 per share, down by 5.6 percent from its previous day’s close price of Rs 183.50 per share. The share of the company gave a negative return of 27 percent over the last year.

Results Overview

The Revenue from Operations decreased by 25 percent QoQ to Rs 936.02 crore in Q1 FY27 from Rs 1,253.70 crore in Q4 FY26. The Profit Before Exceptional Items and Tax decreased by 40 percent QoQ to Rs 248.20 crore in Q1 FY27 from Rs 414.53 crore in Q4 FY26. This resulted in a Profit for the Period decrease of 43 percent QoQ to Rs 181.91 crore in Q1 FY27 from Rs 317.43 crore in Q4 FY26.

The Revenue from Operations grew by 15 percent YoY to Rs 936.02 crore in Q1 FY27 from Rs 815.54 crore in Q1 FY26. Similarly, the Profit Before Exceptional Items and Tax grew by 31 percent YoY to Rs 248.20 crore in Q1 FY27 from Rs 188.80 crore in Q1 FY26. This was accompanied by a Profit for the Period growth of 36 percent YoY to Rs 181.91 crore in Q1 FY27 from Rs 133.71 crore in Q1 FY26.

Segment Performance

The Hotels segment remained the company’s largest business, reporting revenue of Rs 881.06 crore in Q1 FY27, compared to Rs 800.57 crore in Q1 FY26, registering a 10 percent YoY growth. The segment contributed nearly 95 percent of the company’s total segment revenue during the quarter.

The Branded Residences segment generated Rs 37.77 crore in Q1 FY27, compared to nil revenue in Q1 FY26, reflecting increased contribution from the company’s residential projects.

Others

Revenue from the Other segment increased to Rs 11.73 crore in Q1 FY27 from Rs 10.06 crore in Q1 FY26, marking a 16.6 percent YoY growth. Overall, total segment revenue rose to Rs 930.56 crore in Q1 FY27 from Rs 810.63 crore in Q1 FY26, up by 14.8 percent YoY.

Key Concerns in Q1 FY27 Results

• Revenue and profit declined QoQ: The company reported a weaker quarter compared to Q4 FY26. Revenue fell from Rs 1,253.70 crore to Rs 936.02 crore, while net profit declined from Rs 317.43 crore to Rs 181.91 crore.
• Hotel business saw slower performance: Profit from the Hotels business fell compared to the previous quarter. The Branded Residences segment also reported lower profit, which affected the company’s overall earnings.
• Comprehensive income turned into a loss: Although the company remained profitable, its total comprehensive income slipped to a loss of Rs 28.49 crore because of a large loss under Other Comprehensive Income (OCI).
• Subsidiary losses and acquisition impacted results: Two subsidiaries together reported a net loss of Rs 16.55 crore, which weighed on the overall performance. The company also completed the acquisition of Kerala Luxury Resorts Pvt. Ltd., making this quarter’s results not directly comparable with earlier quarters.

Conclusion: ITC Hotels reported strong YoY growth in revenue and profit during Q1 FY27. However, the stock might have come under pressure as investors focused on the weaker QoQ performance, lower profitability in the hotel business, negative comprehensive income, and losses from subsidiaries despite the healthy annual growth.

About the Company

Headquartered in Kolkata, ITC Hotels is a premier Indian hospitality company established in 1975. It operates over 150 properties across 90+ destinations. The company is known for its ‘Responsible Luxury’ philosophy, which focuses on combining premium hospitality with sustainability and eco-friendly practices.

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