ITC Hotels Reports Stellar 54% Profit Jump in Q1 2025 Amid Strategic Expansion Drive

Strong Q1 Performance Driven by Premium Pricing Strategy

ITC Hotels demonstrated exceptional financial performance in the first quarter of 2025, with the hospitality chain reporting that its revenue from operations reached ₹816 crore for the quarter ending in June, marking a substantial 16% year-on-year increase. The company's profit soared to ₹134 crore during the same period, representing an impressive 54% growth compared to the previous year.

The hotels business underwent a significant structural transformation when ITC Hotels was demerged from its parent company with effect from January 1, 2025. Following this strategic move, the company's equity shares commenced trading on both the National Stock Exchange (NSE) and BSE on January 29 this year.

Seasonal Performance Comparison Shows Resilience

Industry analysts noted that the April to June quarter typically represents a leaner period for hotel chains across India. Despite this seasonal challenge, ITC Hotels' performance remained robust. In the preceding quarter ending March 31, the company had reported higher revenue from operations of ₹1,061 crore and a profit of ₹258 crore, establishing a strong foundation for the year.

Aggressive Expansion Strategy Signals Growth Ambitions

The hospitality chain announced significant expansion initiatives during the quarter ended June 30, 2025. The board approved a substantial capital expenditure of ₹328 crore specifically allocated for constructing a new hotel facility in Visakhapatnam, Andhra Pradesh. This strategic investment demonstrates the company's confidence in emerging markets and real estate opportunities in Andhra Pradesh.

The company's expansion momentum continued with the signing of 8 new hotels during the quarter, collectively offering approximately 700 keys. These strategic additions span diverse locations including Bodhgaya, Dehradun, Goa, Lucknow, Manesar, Mysore, Ranthambore, and Vrindavan, showcasing the brand's commitment to penetrating both leisure and business travel markets.

Revenue Per Available Room Growth Outpaces Industry

ITC Hotels' financial metrics revealed exceptional operational efficiency improvements. The company reported that average daily rates increased by 9% during the quarter, while occupancy rates improved by 275 basis points. This combination resulted in an overall revenue per available room growth of 13%, significantly outperforming industry benchmarks.

Management emphasized the company's market leadership position, stating that it commanded a revenue per available room premium of 34% over the industry average. This premium positioning reflects the brand's successful focus on luxury hospitality segments and premium service offerings.

Operational Efficiency Drives Margin Expansion

The hospitality chain achieved remarkable operational improvements, with its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin reaching 32%. This represented an expansion of 130 basis points on a comparable basis, driven by multiple factors including higher revenue per available room, growth in Food & Beverages (F&B) revenue, increased management fees, structural cost interventions, and operating leverage benefits.

On a standalone basis, ITC Hotels reported revenue from operations of ₹744 crore for the quarter ended June, up 15% year-on-year. The standalone profit reached ₹150 crore for the same period, marking a 47% year-on-year increase.

Food & Beverage Segment Shows Strong Recovery

The company's food and beverages division demonstrated robust performance with revenue recording 13% growth. This expansion was primarily driven by increased banqueting activities and outdoor catering services, indicating a recovery in corporate events and social gatherings that had been impacted by previous market conditions.

Future Growth Trajectory and Market Position

ITC Hotels currently operates over 140 hotels with more than 13,400 keys across India. The company maintains a strategic mix of owned and managed properties, with 42% owned and 58% managed respectively. This asset-light approach allows for scalable growth while maintaining operational control.

Looking ahead to 2030, the chain has ambitious expansion plans targeting 220 hotels with over 20,000 keys. The company aims to adjust its ownership structure to achieve a 30% owned and 70% managed keys mix, further optimizing its capital allocation strategy.

The hospitality group maintains a robust development pipeline consisting of 58 hotels with over 5,300 keys, with particular emphasis on brownfield assets that offer quicker market entry and established infrastructure advantages.

Market Challenges and Recovery Trends

ITC Hotels acknowledged that geopolitical developments in May 2025 temporarily affected business operations in certain locations. However, management noted that the hospitality sector demonstrated resilience and bounced back progressively thereafter, indicating the industry's adaptability to external challenges.

This recovery pattern aligns with broader trends observed across India's hospitality and real estate sectors, where premium properties continue to command strong demand despite periodic market volatility.