ITC Hotels Q1 Results 2025: Net Profit Surges 54% to ₹133 Crore, Revenue Touches ₹815 Crore

In a strong start to FY2025, ITC Hotels, the hospitality arm of ITC Limited, reported a 54% year-on-year (YoY) rise in net profit to ₹133 crore for the quarter ended June 30, 2025. The robust growth was driven by sustained travel demand, improved operational efficiency, and continued premiumisation across its hotel portfolio. Revenue for the quarter rose to ₹815 crore, registering a healthy YoY growth of over 26%.

Strong Quarter Reflects Continued Hospitality Revival

ITC Hotels’ Q1FY25 performance signals a positive momentum in India’s luxury and premium hotel segment, which continues to rebound from the pandemic-era disruptions. With strong occupancy levels across major properties and a growing contribution from its managed hotels under the Welcomhotel, Fortune, and Mementos brands, the company saw double-digit growth in both Average Room Rates (ARR) and Revenue Per Available Room (RevPAR).

According to the company’s investor communication, the performance was supported by increased domestic travel, MICE (meetings, incentives, conferences, and exhibitions) demand, and festive season bookings, especially in urban and leisure destinations.

Segment-Wise Growth and Operational Insights

• Luxury Collection & Flagship Hotels: Major city-centric hotels such as ITC Maurya (Delhi), ITC Grand Chola (Chennai), and ITC Royal Bengal (Kolkata) saw strong occupancies and higher ARRs, buoyed by weddings and corporate events.

• Managed Hotels (Welcomhotel, Fortune): This segment witnessed higher growth on a lower base, with several new openings and increased brand footprint across Tier-2 and Tier-3 cities.

• Food & Beverage Revenue: The segment rebounded well with high demand in banqueting and restaurant dining, supported by curated chef-led promotions and seasonal menus across properties.

Analyst Commentary

Hospitality analysts are optimistic about ITC Hotels' performance trajectory. Rahul Bhatia, Senior Analyst at Emkay Global, stated:

“ITC Hotels has posted a stellar quarter with a strong margin profile and broad-based demand. With consistent premiumisation and the rising contribution from the managed asset-light model, profitability is expected to remain strong through FY25.”

Echoing similar views, Anita Desai, Hospitality Sector Lead at Kotak Institutional Equities, added:

“The company’s shift towards a capital-light strategy through management contracts, along with strategic repositioning of its hotel portfolio, is starting to yield visible returns. The post-demerger structure, once completed, could unlock further value.”

Market Context: Sector Continues to Outperform

India’s hospitality industry has been on a multi-quarter recovery path, aided by rising travel demand, foreign tourist arrivals, and big-ticket events. According to HVS Anarock, the Indian hotel sector’s RevPAR grew by 15-18% in Q1 2025 on a pan-India basis.

With major global events scheduled in India in the second half of the year, such as the G20 Tourism Working Group meetings and international exhibitions, hotel bookings are expected to rise further, benefiting brands like ITC Hotels with a pan-India presence.

Additionally, urban leisure and wellness tourism are becoming major demand drivers, helping hotel chains command higher ARRs and diversify revenue streams.

Demerger Progress and Long-Term Strategy

Investors are also closely tracking ITC’s strategic hotel demerger, which will carve out the hospitality business into a separate listed entity. The process, which received shareholder and regulatory approvals, is expected to be completed by Q3 FY2025.

Post-demerger, ITC Hotels aims to expand its footprint aggressively in the premium and upper-midscale segments, and the company has already signed over a dozen new management contracts in FY2025.

Investor Outlook: Room for Growth

Shares of ITC Ltd, which houses the hotels division, closed marginally higher on Tuesday following the results announcement. Investors are encouraged by the hotel division’s performance, especially in light of the upcoming structural changes and sector tailwinds.

Market participants believe the standalone listing of the hotels business will allow better benchmarking against peers like Indian Hotels Company (Taj), Lemon Tree, and Chalet Hotels, and potentially unlock hidden value for shareholders.

What Lies Ahead

Looking ahead, ITC Hotels is expected to capitalize on the robust demand outlook in both corporate and leisure segments. With a well-balanced portfolio, focus on cost control, and a scalable managed-hotel model, the brand is poised for sustainable earnings growth.

The company is also investing in digital guest experiences, ESG-driven green hotels, and culinary innovation, which are expected to drive long-term brand value.