ITC Hotels (ITCHOTELS) | News Based Sentiment Analysis

• On September 26, 2025, ITC Hotels announced its Q1FY26 results, reporting Total Revenue of Rs 860 crore, a 20% increase compared to Rs 716 crore in Q1FY25. This strong revenue growth, coupled with a 53% surge in Profit After Tax (PAT) to Rs 134 crore, demonstrates positive momentum in the company’s core business. However, alternative reports indicated varying revenue figures (₹815.54 crore and ₹863.77 crore) and net profit (₹129.66 crore and ₹133.71 crore), suggesting some inconsistencies in reporting.
• Despite the overall positive Q1FY26 results, a closer look reveals a quarter-on-quarter decline. Revenue decreased by 5.2% and net profit fell by 27.2% compared to the March '25 quarter, with earnings per share (EPS) at 0.6. This QoQ decrease, alongside a more substantial -21.71% revenue decline and -48.14% net profit drop according to another source, raises concerns about short-term performance.
• JM Financial issued a 'sell' recommendation on September 26, 2025, citing limited near-term asset commissioning and current overvaluation. The company’s P/E ratio currently stands at 72.55, with an EV to EBITDA ratio of 41.40 and a Price to Book Value of 4.59 – significantly higher than peers like Indian Hotels Co (P/E of 62.97) and EIH (P/E of 31.5).
• Earlier in the month, on September 19, 2025, ITC Hotels reported a closing price of ₹236.95, a 1.82% decrease from ₹241.35, with a market capitalization of ₹49,347 crore. This price decrease followed the strong Q1 FY26 performance, indicating that the market may have already factored in the positive results or is reacting to the analyst downgrade.
• The company continued to focus on investor relations, participating in an investor conference on September 16, 2025, demonstrating a commitment to transparency. Simultaneously, shareholding patterns shifted as of June 30, 2025 (reported September 22, 2025), with promoter holding decreasing slightly to 39.87% and Indian Public holding increasing to 11.49%, alongside a rise in FII holding to 10.07%.
• A significant regulatory change took effect on September 22, 2025, with the GST Council reducing rates on hotel rooms with tariffs up to ₹7,500 from 12% to 5% without input tax credit. This is expected to lower room prices by up to ₹525 and act as a catalyst for the hospitality industry.
• On September 26, 2025, ITC Hotels Limited announced the closure of its trading window in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015, a standard compliance procedure.
• Keenan McKenzie was appointed as Area Manager – Sri Lanka and General Manager of ITC Ratnadipa, Colombo on September 19, 2025, bringing over two decades of experience, signaling continued expansion in international markets.

The Investment Story: September was a month of contrasts for ITC Hotels, marked by strong Q1FY26 results offset by quarter-over-quarter declines and a 'sell' recommendation from JM Financial. Regulatory tailwinds from the GST reduction offer a potential boost, but investor sentiment appears cautious.

What It Means for Investors: Investors should carefully weigh the positive earnings growth against the QoQ performance dip and the analyst's concerns about overvaluation. The GST rate reduction is a positive catalyst, but its impact needs to be monitored. The shifting shareholding patterns suggest evolving investor positioning.

Looking Ahead: Investors should watch for the impact of the GST rate reduction on Q2 FY26 earnings and monitor the company’s response to the analyst downgrade. Further developments in shareholding patterns and the outcomes of investor conferences will also be key.

The Bottom Line: ITC Hotels presents a mixed investment picture. While the company demonstrates strong financial performance, concerns about valuation and short-term trends warrant caution. Investors should closely monitor key performance indicators and industry dynamics before making investment decisions.