ITC's hotel business reported a 51.4% profit increase to ₹201.02 crore for Q2 FY27, led by a 25.6% revenue growth. Strong occupancy levels of 76% and rising room rates fueled this performance. While the company continues to expand its portfolio, with over 8,200 keys in the pipeline, investors should monitor the cyclical nature of travel demand and the costs associated with its ongoing property expansion projects.
ITC Limited’s hotel division posted significant financial growth in the second quarter of fiscal year 2027, as strong domestic demand and high-value business events boosted both room rates and occupancy. The company reported a net profit of ₹201.02 crore, a 51.4% increase compared to ₹132.77 crore in the same quarter last year. Revenue for the segment grew by 25.6% to reach ₹1,054.14 crore, reflecting the company’s ability to capture higher spending from travelers.
A key driver of this performance was a 21% rise in revenue per available room (RevPAR), a metric that tracks how much money the hotel makes for every room it has, regardless of whether it is occupied. This growth was supported by a 14% increase in average daily room rates and an occupancy level of 76%, which improved by 481 basis points. Management attributed some of this success to specific events like the BRICS India 2026 Summit, which drove increased activity in business travel and convention bookings in New Delhi.
The hotel division is currently in a phase of aggressive expansion, utilizing a mix of asset-light strategies and new acquisitions to grow its footprint. During the first half of FY27, the company signed 20 new properties, adding 1,600 keys to its portfolio. The total pipeline now exceeds 8,200 keys across 84 hotels. Notable recent developments include the acquisition of the 130-key Welcomhotel Ahmedabad and the securing of a 2.8-acre land parcel in Lucknow, which aims to help the company establish a presence in emerging urban business centers.
From an investor's perspective, the hospitality sector remains cyclical, meaning earnings are sensitive to changes in broader economic conditions and travel trends. While the 32% EBITDA margin indicates efficient operational performance, investors should continue to track whether the company can maintain this pricing power as the wedding season and corporate event cycle progresses. The ongoing capital spending on new properties and land acquisitions is a strategy to capture future demand, but it also increases the need for consistent operational cash flow to manage costs. The company’s ability to balance its asset-heavy expansion with high occupancy levels will be a primary indicator of long-term sustainability in the competitive luxury and upscale hotel segment.