💰 Financial Performance

Revenue Growth by Segment

Consolidated Revenue from Operations grew 12% YoY to INR 1,655 Cr in H1 FY26. Standalone Room Revenue growth was driven by a 9% RevPAR increase, while Food & Beverage (F&B) revenue grew 5% YoY in Q2 FY26. In FY24, total revenue reached INR 3,034 Cr, a 15.4% increase from INR 2,629 Cr in FY23.

Geographic Revenue Split

The portfolio covers 140 hotels across 90+ destinations in India, with international presence via ITC Ratnadipa in Colombo, Sri Lanka. While specific % splits by city are not provided, the customer mix is 81% Retail, MICE, and Weddings as of FY24, up from 61% in FY20.

Profitability Margins

Consolidated PAT Margin for H1 FY26 stood at 15%, up 437 bps YoY. Standalone PAT for Q2 FY26 was INR 152 Cr, up 45% YoY. FY24 EBITDA margin was 33.1%, improving from 30.7% in FY23 due to higher ADRs and occupancy levels.

EBITDA Margin

Consolidated EBITDA margin was 30% in H1 FY26, up 150 bps YoY. EBITDA for H1 FY26 reached INR 490 Cr, a 17% increase YoY. On a comparable basis, Q2 FY26 EBITDA grew 22% YoY, reflecting strong operational leverage.

Capital Expenditure

Planned capital expenditure is estimated at 8-10% of annual revenue (approximately INR 240-300 Cr based on FY24 levels) to support regular maintenance and greenfield/brownfield expansions over the next 4-5 years.

Credit Rating & Borrowing

The company maintains a strong financial profile with a debt-free balance sheet post-demerger. Liquidity is supported by INR 1,500 Cr in cash and equivalents transferred from ITC Ltd. CRISIL notes a strong financial risk profile with net worth exceeding INR 10,000 Cr.

⚙️ Operational Drivers

Raw Materials

Primary operational costs include Food & Beverage (F&B) supplies (perishables, dry goods), Energy (electricity, fuel), and People Costs (contractor payments and payroll). F&B costs are managed as a % of F&B revenue, which grew 5% in Q2 FY26.

Import Sources

Sourcing is primarily domestic across 90+ destinations in India to support local supply chains, with international sourcing for specialized luxury amenities and signature cuisine ingredients for premium brands.

Key Suppliers

Not specifically named in the documents; however, the company leverages 'Institutional Synergies' with ITC Ltd for procurement and distribution efficiencies.

Capacity Expansion

Current capacity is ~13,000 keys across 140 hotels. The company plans to expand to 18,000+ keys and 200+ hotels within 5 years, and targets 20,000+ keys across 220+ hotels by 2030.

Raw Material Costs

Total operating expenses for H1 FY26 were INR 1,165 Cr, up 9% YoY. The company focuses on 'Operational Excellence' to keep cost-per-key significantly lower than peers through productivity and efficiency thrusts.

Manufacturing Efficiency

Occupancy stood at 68% in FY24 with a 254 bps expansion in Q2 FY26. The company maintains a 40% RevPAR premium over the industry, indicating high efficiency in asset monetization.

Logistics & Distribution

Distribution is driven by 'World Class Digital Infrastructure' and 'Best-in-class loyalty programs' to reduce dependency on high-cost third-party booking channels.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved through the 'Asset-Right' model, focusing on management contracts to reach 200+ hotels. The pipeline includes 61 hotels (~5,900 keys) with a focus on premium segments via the new 'Epiq Collection' brand and scaling the 'Storii' and 'Mementos' brands.

Products & Services

Luxury and mid-scale hotel stays, branded signature cuisines (F&B), MICE (Meetings, Incentives, Conferences, and Exhibitions) services, wedding hosting, and luxury residential apartments (Colombo).

Brand Portfolio

ITC Hotels, Welcomhotel, Mementos, Storii, Fortune, WelcomHeritage, Epiq Collection.

New Products/Services

Launched 'Epiq Collection – Member ITC Hotels Group' in Q2 FY26 to accelerate growth in the premium segment. Residential apartment sales at ITC Ratnadipa, Colombo, are expected to commence in 2025.

Market Expansion

Expansion into 90+ destinations with a focus on Tier I cities, metros, and key tourist hubs. International expansion is currently focused on Sri Lanka with the 352-key ITC Ratnadipa.

Market Share & Ranking

Ranked as one of the pre-eminent hotel chains in India, particularly in the luxury segment, commanding a 40% RevPAR premium over the industry average.

Strategic Alliances

Maintains a strategic relationship with ITC Ltd, which holds a 40% stake and provides brand, managerial, and governance support.

🌍 External Factors

Industry Trends

The industry is currently in an upcycle where demand growth is expected to outpace supply growth over the medium term, supporting sustained healthy operating performance and higher ARRs.

Competitive Landscape

Competes with major domestic and international luxury chains. Competitive edge is maintained through a 40% RevPAR premium and a diversified brand portfolio from mid-scale to luxury.

Competitive Moat

Durable advantages include 'Food & Beverage Supremacy' (signature cuisine brands), a strong loyalty program, and the 'ITC' brand equity. These are sustainable due to the high capital barrier for luxury assets and deep institutional expertise.

Macro Economic Sensitivity

Highly sensitive to GDP growth; RevPAR in business destinations correlates strongly with nominal GDP growth. Leisure destinations are sensitive to non-economic factors like travel warnings.

Consumer Behavior

Increasing trend toward 'discretionary spending' and 'leisure travel' is driving demand in the hospitality sector, particularly in the premium and luxury segments.

Geopolitical Risks

Operations in Sri Lanka (ITC Ratnadipa) are subject to local economic conditions and political stability, which could impact the ramp-up of occupancy and residential sales.

⚖️ Regulatory & Governance

Industry Regulations

Subject to hospitality standards, food safety regulations, and environmental norms. The demerger was sanctioned by NCLT Kolkata Bench via order dated October 04, 2024.

Environmental Compliance

Committed to 'Sustainability 2.0' agenda; recently commissioned a 3.3 MW windmill facility in Gujarat to increase renewable energy salience.

Taxation Policy Impact

Effective tax rate for H1 FY26 was approximately 29.7% (INR 110 Cr tax on INR 370 Cr PBT).

Legal Contingencies

The demerger scheme became effective January 01, 2025, following NCLT approval. No other specific pending court cases with INR values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'cyclicality' of the hospitality industry, where a downturn could compress operating margins. Another risk is the ramp-up of the Colombo asset (ITC Ratnadipa) and residential unit sales.

Geographic Concentration Risk

High concentration in India (90+ destinations), with specific exposure to metros and Tier I cities which are sensitive to corporate travel trends.

Third Party Dependencies

Increasing dependency on hotel owners for the 'managed' portfolio (targeted at 2/3rd of keys), requiring strong relationship management and brand standard enforcement.

Technology Obsolescence Risk

Mitigated by 'Digital First' strategy focusing on best-in-class guest experience applications and data automation.

Credit & Counterparty Risk

Liquidity is 'Superior' with INR 1,500 Cr cash balance; receivables quality is supported by a high salience of retail and established corporate clients.