ITC Hotels profit surges 36%, buys GHK Hospitality for Rs 155 crore
ITC Hotels reported a 36% rise in first-quarter profit driven by strong revenue growth and improved operating leverage, alongside a targeted acquisition to expand its footprint.
ITC Hotels posted a consolidated net profit of Rs 181.91 crore for the first quarter, a 36% increase from Rs 133.71 crore in the corresponding period of the last fiscal. Consolidated revenue from operations rose to Rs 936.02 crore, up from Rs 815.54 crore a year earlier, according to a regulatory filing.
The significant bottom-line growth substantially outpaced the top-line increase, pointing to improved operating leverage during the quarter. Total expenses reached Rs 750 crore compared to Rs 674.9 crore in the same period a year prior. This roughly 11% rise in operating costs was comfortably absorbed by the nearly 15% jump in revenue, allowing the company to convert higher sales into outsized profit growth.
Breaking down the top line, the core hotel business drove the bulk of the quarterly performance. The hotel segment generated Rs 881.06 crore in revenue, up from Rs 800.57 crore in the year-ago period. Beyond traditional hospitality, the company's newly launched branded residences vertical also made a notable debut, contributing Rs 37.77 crore in revenue during the quarter.
Alongside the earnings release, the ITC Hotels board approved the acquisition of GHK Hospitality & Infrastructures Ltd at an enterprise value of Rs 155 crore. The investment will be structured through a combination of a primary subscription and a secondary purchase of GHK's equity shares.
For market professionals, the GHK purchase signals a focused expansion strategy rather than a sprawling diversification. At an enterprise value of Rs 155 crore, the deal represents a calculated bolt-on acquisition for a company generating close to a billion rupees in quarterly revenue. The combination of expanding margins in the core hospitality segment and targeted acquisitions indicates that ITC Hotels is actively consolidating its market position in India. Furthermore, the early revenue contribution from the branded residences vertical provides investors with a tangible data point on the company's ability to successfully monetize its real estate assets beyond standard hotel room rates.
