ITC Hotels stock falls 5.11% despite 36.05% profit growth
Revenue growth outpaced expenses and widened margin, but other income contributed 25.05% of pre-tax profit and the stock saw an unusually sharp decline.
Filed 16 Jul 2026, 14:04 IST · ITC Hotels Ltd (ITCHOTELS)
Key takeaways
- Consolidated net profit rose 36.05% year on year to Rs 181.91 cr, helped by a 2.47 percentage-point decline in the tax rate.
- Revenue grew 14.77% while expenses rose 12.76%, lifting operating margin by 1.23 percentage points to 31.23%.
- The stock fell 5.11% on the results day, an unusually large move against its 0.85% median reaction after the past five results.
Price around the results
Revenue growth translated into faster profit growth
Consolidated revenue increased 14.77% year on year to Rs 936.02 cr, while operating profit grew 19.48% to Rs 292.32 cr. Since expenses rose more slowly than revenue, operating margin expanded 1.23 percentage points. Net profit growth was faster at 36.05%, also reflecting the lower tax rate.
Lower tax helped, while other income remained material
The tax rate fell 2.47 percentage points year on year to 26.71%, which supported the larger increase in net profit than in operating profit. Other income was 25.05% of pre-tax profit, so a meaningful part of reported earnings came below operating profit. Interest rose 20.48%, but depreciation increased only 1.82%.
Margin recovered from Q2 but remains below the Q3 peak
Operating margin improved from 29.27% in Q2FY26 to 37.95% in Q3FY26 before settling at 31.23% in Q1FY27. This is above the 30.00% recorded in Q1FY26, but below the recent Q3 peak. Among 22 Consumer Discretionary peers that have reported, the company's margin was 16.49 percentage points above the sector median of 14.74%.
Market reaction was far weaker than the stock's usual results response
The stock opened 0.82% higher but closed 5.11% lower on the results day and was down 6.04% on the following session. That contrasts with four rises and one fall across the past five results reactions, where the median absolute move was 0.85%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | YoY |
|---|---|---|
| Revenue | ₹936 cr | +14.77% |
| Other income | ₹62 cr | +28.92% |
| Expenses | ₹644 cr | +12.76% |
| Operating profit | ₹292 cr | +19.48% |
| Operating margin (%) | 31.23% | — |
| Interest | ₹2 cr | +20.48% |
| Depreciation | ₹104 cr | +1.82% |
| Profit before tax | ₹248 cr | +31.46% |
| Tax | ₹66 cr | +20.33% |
| Net profit | ₹182 cr | +36.05% |
| EPS (₹) | ₹0.87 | +35.94% |
Operating margin of 31.23% compares with a Consumer Discretionary sector median of 14.74% across 22 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -5.11% | -5.08% |
| Next session | -6.04% | — |
| 5 sessions | -11.75% | -10.88% |
Volume on the results session was 2.27× its 20-day average.
What to watch
- Whether expense growth remains below the 14.77% revenue growth rate.
- Whether operating margin holds above 31.23% after the move from 37.95% in Q3FY26.
- Whether other income remains a material contributor relative to its 25.05% share of pre-tax profit.