ITC Hotels, the hospitality division of conglomerate ITC Ltd., announced a significant financial performance for the first quarter of the fiscal year 2023-24, ending June 30, 2023. The company reported substantial growth in both revenue and profit before tax (PBT), navigating a period characterized by broader market fluctuations. This strong showing positions the hotels business as a notable performer within its parent company's diverse portfolio.

For Q1 FY24, ITC Hotels recorded a revenue of Rs 596 crore, marking a 15% increase compared to the same period last year. Profit Before Tax (PBT) demonstrated even more robust growth, rising by 33% year-on-year to reach Rs 132 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a healthy surge of 22.4%, amounting to Rs 197 crore. This performance resulted in an improvement in the EBITDA margin by 200 basis points, reaching 33.1%, underscoring operational efficiencies achieved during the quarter.

The positive financial results are primarily attributed to several key factors within the Indian hospitality sector. A significant rebound in domestic business and leisure travel contributed substantially to the increased footfall and bookings. Furthermore, the company benefited from improved Average Room Rates (ARR) and higher occupancy levels across its properties. The Meetings, Incentives, Conferences, and Exhibitions (MICE) segment also experienced a strong recovery, further bolstering the division's revenue streams. These factors collectively highlight a robust demand environment for hospitality services in India during the reporting period.

While ITC Ltd. as a whole reported a net profit growth of 6.6% to Rs 4,903 crore for the same quarter, the hotels division's performance stood out with its accelerated growth rates. The hotels business, though a smaller component, contributed approximately 4% to ITC Ltd.'s standalone revenue and around 2.5% to its standalone PBT in Q1 FY24, underscoring its strategic importance and growth potential.

Key financial highlights for ITC Hotels in Q1 FY24 include:

  • Revenue: Rs 596 crore (up 15% year-on-year)
  • Profit Before Tax (PBT): Rs 132 crore (up 33% year-on-year)
  • EBITDA: Rs 197 crore (up 22.4% year-on-year)
  • EBITDA Margin: 33.1% (up 200 basis points)
  • Primary Growth Drivers: Strong domestic travel (business and leisure), enhanced Average Room Rates, increased occupancy, and recovery of the MICE segment.

Looking ahead, these strong Q1 results come shortly after ITC Ltd.'s board of directors, on July 24, 2023, approved the demerger of its hotels business into a new, separately listed entity, ITC Hotels Ltd. Under the proposed arrangement, ITC Ltd. will retain an approximately 40% equity stake in the new entity, with the remaining 60% to be distributed directly to ITC Ltd. shareholders. The robust financial performance in the first quarter is expected to provide a positive foundation for ITC Hotels Ltd. as it prepares for its independent listing and future growth in the competitive hospitality market.