ITC Hotels grows revenue 18.20%, but margin slips on faster cost growth
Net profit rose 23.11% as the tax rate fell, while other income contributed 14.34% of pre-tax profit.
Filed 27 Jul 2026, 13:37 IST · ITC Hotels Ltd (ITCHOTELS)
Key takeaways
- Consolidated revenue grew 18.20% year on year to Rs 1,253.70 cr, but expenses rose faster at 21.45%, narrowing operating margin by 1.68 percentage points.
- Net profit rose 23.11% year on year to Rs 317.43 cr, helped by a 2.93-percentage-point reduction in the tax rate.
- Other income contributed 14.34% of pre-tax profit, making earnings quality an important consideration despite the reported profit growth.
Price around the results
Revenue growth outpaced the prior year but not costs
Consolidated revenue rose 18.20% year on year, while operating profit increased only 13.10%. Sequentially, revenue grew 1.87%, but operating profit declined 0.16% because expenses increased 3.11%, faster than revenue. The operating margin also fell 0.76 percentage points sequentially.
Lower tax rate lifted profit conversion
The tax rate fell 2.93 percentage points year on year and 3.47 percentage points sequentially, helping net profit grow faster than pre-tax profit. Other income rose to Rs 60.01 cr from Rs 42.71 cr a year earlier and swung from negative Rs 33.53 cr sequentially; it accounted for 14.34% of pre-tax profit. Interest remained small, although it rose 29.17% year on year.
Margin remains above the sector median after a mixed trend
Operating margin recovered from 29.27% in Q2FY26 to 37.95% in Q3FY26, but declined to 37.19% in Q4FY26 and remained below 38.87% in Q4FY25. Across 93 Consumer Discretionary peers that have reported, the company's margin was 22.38 percentage points above the sector median of 14.81%. The sequential decline means the recovery has not yet extended into a second consecutive quarter.
Initial stock reaction was quieter than its usual results move
The stock gained 0.08% on the immediate reaction day, then was down 0.68% after five sessions and 3.21% after 15 sessions, before reaching a 15.86% gain after 30 sessions. Its past four results reactions were positive three times and negative once, with a median absolute move of 3.06%. The immediate move was therefore smaller than its usual reaction size, and the period overlapped with a corporate action.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,254 cr | ₹1,231 cr | +1.87% | +18.20% |
| Other income | ₹60 cr | ₹-34 cr | — | +40.51% |
| Expenses | ₹787 cr | ₹764 cr | +3.11% | +21.45% |
| Operating profit | ₹466 cr | ₹467 cr | -0.16% | +13.10% |
| Operating margin (%) | 37.19% | 37.95% | — | — |
| Interest | ₹2 cr | ₹2 cr | -0.91% | +29.17% |
| Depreciation | ₹106 cr | ₹104 cr | +1.51% | +5.99% |
| Profit before tax | ₹418 cr | ₹327 cr | +27.89% | +18.34% |
| Tax | ₹101 cr | ₹90 cr | +11.77% | +5.50% |
| Net profit | ₹317 cr | ₹237 cr | +34.03% | +23.11% |
| EPS (₹) | ₹1.52 | ₹1.13 | +34.51% | +23.58% |
Operating margin of 37.19% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.08% | +0.28% |
| Next session | -1.23% | — |
| 5 sessions | -0.68% | -0.81% |
| 15 sessions | -3.21% | — |
| 30 sessions | +15.86% | — |
Volume on the results session was 1.16× its 20-day average.
What to watch
- Whether operating margin holds above 37.19% after the sequential decline.
- Whether expenses grow more slowly than revenue after rising 21.45% year on year.
- Whether other income remains below 14.34% of pre-tax profit or continues to influence earnings quality.