1. At a Glance
ITC Hotels, freshly checked-out from parent ITC Ltd., is India’s 3rd largest hotel chain with 100+ properties under brands like Welcomhotel and The Luxury Collection (via Marriott franchise). Zero debt, high capex, low dividend—this luxury guest has arrived with mixed luggage.
2. Introduction with Hook
Imagine your dad owns the hotel. One day, he hands you the keys and says, “You’re on your own, kid.” That’s ITC Hotels post-2025 demerger.
- Q1 FY26 PAT: ₹134 Cr
- Q1 FY26 Revenue: ₹816 Cr
- Inventory Days: 1,247 (Are they stocking entire bedsheets per room?)
This demerger isn’t just about listing—it’s about finally charging your own guests without your parent footing the minibar bill.
3. Business Model (WTF Do They Even Do?)
ITC Hotels Ltd operates, manages, and franchises luxury and business-class hotels across India. It includes properties under brands like:
- ITC Grand (Luxury Collection – Marriott tie-up)
- Welcomhotel (Premium)
- Fortune (Midscale)
- WelcomHeritage (Boutique)
It earns via:
- Room rentals
- Food & beverage services
- Banquets & event hosting
- Franchise and management fees
The asset-heavy model remains, but it’s blending with management contracts—less Capex, more RevPar.
4. Financials Overview
Annual Snapshot (FY25):
| Metric | Amount (₹ Cr) |
|---|---|
| Revenue | 3,560 |
| EBITDA | 1,211 |
| OPM | 34% |
| Net Profit | 638 |
| EPS | ₹3.05 |
| ROCE | ~13% (Estimated) |
Q1 FY26 keeps the trend alive with ₹816 Cr topline and ₹134 Cr profit. The EBITDA margin remains healthy at 30%.
5. Valuation
At ₹238/share and a market cap of ₹49,643 Cr, here’s the luxury math:
Valuation Multiples:
- P/E: 78.2x (say what now?)
- P/B: 4.6x
- EV/EBITDA: ~42x (based on ₹1200 Cr FY25 EBITDA)
Fair Value Range (2026E):
- Bull Case: ₹270–₹290 (assuming 25% PAT growth, 60x forward P/E)
- Base Case: ₹210–₹240 (moderate growth + 45–50x P/E)
- Bear Case: ₹180–₹200 (if room rates drop and costs rise)
Valuation is pricing in a perfect stay with no noise, no staff strikes, and constant weddings. Reality may bring room service delays.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Banger: ₹134 Cr PAT, ₹816 Cr revenue
- Capex Alert: ₹328 Cr allocated to a Visakhapatnam hotel (because who doesn’t want beach-facing EBITDA?)
- ESOP Exercise: 12 Jul 2025 – Equity shares allotted under employee scheme
- Re-Rating Buzz: Now trading independently, with analyst interest heating up
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 208 |
| Reserves | 10,484 |
| Borrowings | 73 |
| Total Liabilities | 12,476 |
| Fixed Assets | 8,191 |
| Investments | 676 |
| Other Assets | 3,453 |
Key Takeaways:
- Almost debt-free
- Solid asset base
- Large reserve war chest
- CWIP indicates future room additions brewing
8. Cash Flow – Sab Number Game Hai
| FY25 | ₹ Cr |
|---|---|
| CFO | 803 |
| CFI | -2,206 |
| CFF | 1,430 |
| Net Cash Flow | +27 |
- Major cash burn in investing (Capex-led)
- Financing includes IPO/market raise + ESOPs
- Operating cash flows healthy, driven by margin expansion
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| OPM | 34% |
| NPM | ~18% |
| ROCE | ~13% |
| Inventory Days | 1,247 (seriously?) |
| Debtor Days | 21 |
| CCC | 845 Days (Monsoon check-in, winter checkout?) |
Verdict:
Luxury margin = Sexy
Working capital cycle = Stressy AF
10. P&L Breakdown – Show Me the Money
| Item | FY25 (₹ Cr) |
|---|---|
| Revenue | 3,560 |
| Expenses | 2,349 |
| Operating Profit | 1,211 |
| Other Income | 82 |
| Depreciation | 402 |
| PBT | 884 |
| Net Profit | 638 |
- Steady revenue rise
- Leverage from scale kicking in
- Other income surprisingly large (asset sales, maybe?)
11. Peer Comparison
| Company | CMP | MCap (₹ Cr) | P/E | OPM | ROCE | PAT (₹ Cr) |
|---|---|---|---|---|---|---|
| Indian Hotels | ₹751 | 106,720 | 64.2 | 33% | 17.2% | 1,661 |
| EIH | ₹380 | 23,801 | 31.3 | 37% | 23.2% | 759 |
| Chalet Hotels | ₹890 | 19,465 | 136.6 | 43% | 11.3% | 142 |
| ITC Hotels | ₹238 | 49,643 | 78.2 | 34% | ~13% | 634 |
Key Insight:
ITC Hotels is still finding its legs—less profitable than EIH, more expensive than Indian Hotels, but benefits from ITC’s DNA.
12. Miscellaneous – Shareholding, Promoters
| Category | Stake (Mar 2025) |
|---|---|
| Promoter (ITC) | 39.88% |
| FIIs | 25.37% |
| DIIs | 21.60% |
| Public | 13.11% |
| Total Shareholders | 25.73 lakh |
Notes:
- Strong institutional support
- Almost no government presence
- Public likely to grow post IPO
13. EduInvesting Verdictâ„¢
ITC Hotels is the hospitality version of “baby’s first solo trip.” Backed by a strong promoter, armed with premium properties, and drenched in Capex, it’s got potential. But is it overvalued at 78x P/E? Oh absolutely.
Think of it like booking a ₹15,000/night room with no free breakfast. You better love the experience or it’ll burn a hole—just like this stock might if growth cools off.
Metadata
– Written by EduInvesting Analyst | 16 July 2025
– Tags: ITC Hotels, Hospitality IPO, Hotel Stocks, Luxury Travel, Spin-Off Stocks, Earnings Q1FY26
