ITC Hotels' Q2 profit rises 52% as operating margin expands
Revenue grew faster than costs both year on year and sequentially, but other income made up 19.85% of pre-tax profit.
Filed 26 Oct 2026, 13:31 IST · ITC Hotels Ltd (ITCHOTELS)
Key takeaways
- Consolidated revenue grew 25.57% year on year as expenses rose 20.71%, lifting operating margin by 2.74 percentage points.
- Net profit increased 52.04% year on year, helped by a 2.26-percentage-point lower tax rate and other income equal to 19.85% of pre-tax profit.
- Operating margin rose 0.78 percentage points sequentially to 32.01%, but remained below the 37.95% and 37.19% recorded in the preceding two quarters.
Price around the results
Revenue growth outpaced expense growth
ITC Hotels reported consolidated revenue of Rs 1,054.14 cr in Q2FY27, up 25.57% year on year and 12.62% sequentially. Expenses grew more slowly, at 20.71% year on year and 11.34% sequentially, which helped operating profit rise 37.31% year on year and 15.44% quarter on quarter.
Margin improved, but remains below recent peak
Operating margin rose 2.74 percentage points year on year and 0.78 percentage points sequentially because revenue growth exceeded expense growth. The 32.01% margin was below 37.95% in Q3FY26 and 37.19% in Q4FY26, though it was above 29.27% a year earlier. Among 50 Consumer Discretionary peers that have reported, ITC Hotels' margin was 19.59 percentage points above the 12.42% median.
Lower tax rate and other income lifted profit quality
Net profit grew 52.04% year on year, ahead of the 47.32% increase in pre-tax profit. The tax rate fell 2.26 percentage points year on year to 27.1%, which supported the net-profit growth, while other income contributed 19.85% of pre-tax profit. Interest expense also rose 14.66% year on year, although from a low base.
Sequential recovery follows two quarters of higher margins
Operating margin had reached 37.95% in Q3FY26 and 37.19% in Q4FY26 before falling to 31.23% in Q1FY27. Q2FY27 brought a sequential recovery to 32.01%, but the margin remains below both preceding peak quarters. The company filed consolidated results on 26 October 2026.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,054 cr | ₹936 cr | +12.62% | +25.57% |
| Other income | ₹55 cr | ₹62 cr | -11.27% | +12.75% |
| Expenses | ₹717 cr | ₹644 cr | +11.34% | +20.71% |
| Operating profit | ₹337 cr | ₹292 cr | +15.44% | +37.31% |
| Operating margin (%) | 32.01% | 31.23% | — | — |
| Interest | ₹2 cr | ₹2 cr | +9.50% | +14.66% |
| Depreciation | ₹112 cr | ₹104 cr | +7.81% | +8.04% |
| Profit before tax | ₹278 cr | ₹248 cr | +12.00% | +47.32% |
| Tax | ₹75 cr | ₹66 cr | +13.64% | +35.97% |
| Net profit | ₹203 cr | ₹182 cr | +11.40% | +52.04% |
| EPS (₹) | ₹0.97 | ₹0.87 | +11.49% | +51.56% |
Operating margin of 32.01% compares with a Consumer Discretionary sector median of 12.42% across 50 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 32.01% after the sequential recovery.
- Whether expenses continue to grow more slowly than revenue, as they did at 20.71% versus 25.57% year on year.
- Whether other income remains a material contributor after accounting for 19.85% of pre-tax profit.