ITC Hotels Q4 Results: Shares down 0.5% ahead of earnings; key things you need to know

The demerged entity was listed on the stock exchanges on January 29, 2025, at a discount of 30.7% at ₹180 on the NSE. The implied price was ₹260.

On the BSE, shares were listed at ₹188 apiece. The implied price on the BSE was ₹270. Hence, this suggests that the stock was listed at a 30.3% discount on the BSE.

The demerger of ITC's hotel business came into effect on January 1, 2025, with January 6 fixed as the record date. The move separated ITC Hotel from the parent entity.

In the early trade, the stock was trading 0.54% lower at ₹200.84 on the NSE.

Q4 FY25 Earnings

Market participants will closely track the company's financial numbers, upcoming strategies, and expansion plans, among others. The Street is likely to compare numbers with those of Indian Hotels Company, the hospitality arm of the Tata Group.

For the March 2025 quarter, The Indian Hotels Company Limited (IHCL), parent of five-star hotel chain operator Taj Hotels and Resorts, reported a net profit of ₹522 crore in the January-March quarter, marking an upside of 25% from ₹418 crore in the same period last year. Its revenue from operations rose 27% to ₹2,487 crore as against ₹1,951 crore in the year-ago period.

The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA), also known as operating profit rose 30% to ₹918.74 crore in March quarter from ₹706 crore in the same period last year. For the quarter, operating profit margin (EBITDA margin) improved to 36.94% from 36.19%.

The company's board has recommended a dividend of ₹2.25 per share for the financial year 2024-25.

ITC Hotels: The Road Ahead

The company after listing on the bourses said it plans to expand its portfolio to over 200 hotels over the next five years.

The new pure-play hospitality company said it will continue to pursue its asset-right strategy to expand its footprint across India and in proximal markets.

"Debuting with a zero-debt balance sheet and a cash/cash equivalents of Rs 1,500 crore to cater to planned growth and contingency requirements, ITCHL is now listed for trading on the stock exchanges," ITC Hotels said.

Today, all eyes will be on management commentary on the said plans and other strategies going ahead.

Financial performance

In the October to December 2024 quarter, ITC Hotels reported its best-ever quarterly performance. Its revenue during the quarter stood at ₹922 crore, which grew by 14.6% year-on-year (YoY) on a high base. Profit before tax, meanwhile, stood at ₹302 crore, up 43.4% YoY, driven by the retail, wedding, and food & beverages (F&B) segments, according to a report by Jefferies.

Street highly optimistic

In its report issued in February 2025, Jefferies said that ITC Hotels is a strong number 2 business in the hotel space, fairly diversified across metrics, and slated to benefit from a cyclical recovery in the Hotel sector. Near-term growth drivers include the scale-up of recent greenfields and an increase in the share of Asset Light. “With the demerger from the parent company behind, the delivery of performance in its independent existence will rerate the stock,” Jefferies said in a report on Wednesday.

Jefferies expects increased demand for travel and tourism to sustain over FY24-FY27, and therefore, ITC Hotels is expected to report steady growth over the next few years. “We expect 15% EBITDA CAGR for Hotels business, driving total EBITDA CAGR of 16% over FY24-FY27e.”

The America-based multinational financial services company added that its profit after tax (PAT) is expected to grow faster at 19% CAGR, including slow growth in FY25, impacted by depreciation related to the commissioning of Sri Lanka assets.

ITC Hotels' stock performance

Shares of the company have gained more than 5% in the past five sessions (from May 8 to May 14). However, it remained flat in the past 30 days.