ITC Hotels Q3 Results: PAT jumps 77% YoY to ₹235 crore, revenue rises 47%

ITC Hotels ended the December quarter with a sharp improvement in both profit and revenue, supported by stronger seasonal demand and higher utilisation across its hotel portfolio, as travel activity picked up during the festive and year-end period.

Key Insights from the Financials

For the third quarter of FY26, ended 31 December 2025, ITC Hotels posted a consolidated profit after tax of ₹235.13 crore. This compares with ₹132.77 crore in the previous quarter, translating into a 77% sequential rise. On a year-on-year basis, profit increased 9.4% from ₹214.97 crore in the same quarter last year.

ITC Hotels reported a rise in revenue during the December quarter, 21.9% year-on-year to ₹1,224.27 crore in Q3FY26, compared with ₹1,004.51 crore in the same quarter of the previous financial year. On a sequential basis, revenue increased 47% from ₹832.04 crore reported in Q2FY26.

The company reported earnings per share of ₹1.13 on both a basic and a diluted basis.

Did Revenue Recovery Support Operating Performance in Q3?

Total expenses for the quarter stood at ₹870.02 crore, up 17.5% from a year earlier and 24.3% on a sequential basis. The rise in expenses reflects the larger scale of operations compared with the previous quarter. However, the company did not provide a detailed breakdown of individual cost heads in the results statement.

The company said its financial results include the impact of implementing the new Labour Codes, which resulted in a one-time exceptional cost of ₹52.53 crore.

In a filing to the BSE, ITC Hotels said the exceptional item for the quarter and the nine months ended 31 December 2025 represents the estimated one-time impact of recognising past service costs of ₹52.53 crore related to gratuity and leave with wages, following notifications issued by the Ministry of Labour and Employment.

Hotels Segment Continues to Anchor Earnings

The hotel business remained the main contributor to performance. Segment revenue rose to ₹1,132.51 crore in the December quarter, up from ₹995.49 crore in the same period last year. Earnings before interest and tax from the segment increased to ₹336.79 crore, marking a 22.96% year-on-year rise.

The real estate and other businesses segment reported revenue of ₹81.51 crore, with earnings before interest and tax of ₹26.45 crore. The segment continued to add steadily to consolidated results.

Results Out, But Why Did the Stock Slide?

Following the announcement of the December-quarter results, shares of ITC Hotels were trading about 2.4% lower during the session, in line with broader market movement. The stock movement reflected overall market conditions rather than company-specific developments, as hospitality stocks traded mixed during the session.

Key Takeaway

For investors, the sharp sequential jump hints at operating leverage kicking in, meaning profits could scale faster than revenue during strong demand cycles. Traders may note that festive-driven performance can create short-term momentum but may cool in softer quarters. The one-time labour cost masks underlying margins, so future quarters could look cleaner. Watch occupancy trends and cost control closely, as they may drive valuation re-rating more than headline growth.

Sources:

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