ITC Hotels Declares First-Ever Dividend as FY26 PAT Jumps 29%

Synopsis:-Reporting consolidated revenue from operations of Rs. 4,139 crore and a net profit of Rs. 821 crore for FY26  both meaningfully ahead of the prior year  ITC Hotels Limited has also recommended its first-ever dividend of Rs. 1 per share, with a record date of 21 May 2026, a milestone that underlines the company’s conviction in its cash generation capacity as an independently listed hospitality entity.

Quarterly results declared today  15 May 2026  alongside a first-ever dividend recommendation brought ITC Hotels Limited into sharp focus. The Board approved audited standalone and consolidated financial results for Q4 and the twelve months ended 31 March 2026 at a meeting that ran from 1:50 PM to 3:10 PM. Statutory auditors S.R. Batliboi & Co. LLP have issued unmodified opinions on both sets of results.

With a market capitalization of approximately Rs. 32,650 crore, the shares of ITC Hotels Limited were last trading at Rs.155.48, up 0.08 percent from its previous close of Rs.155.35. It is trading at a trailing P/E of 43.22 times.

On a consolidated basis, revenue from operations for FY26 came in at Rs. 4,139.40 crore, against Rs. 3,559.81 crore in FY25, a gain of 16.3 percent. Profit before exceptional items and tax rose 36.1 percent to Rs. 1,203.15 crore from Rs. 884.06 crore, a pace that outstripped revenue growth by a significant margin and reflects a combination of operating leverage in the hotel segment and a first-year revenue contribution from real estate.

Reported net profit after tax stood at Rs. 821.26 crore, up 28.8 percent from Rs. 637.64 crore. Stripping out the consolidated exceptional charge of Rs. 80.17 crore  discussed below  the underlying PAT figure is closer to Rs. 879 crore, implying growth of roughly 38 percent on the same basis.

Q4 FY26 held the momentum. Consolidated revenue came in at Rs. 1,253.70 crore, up 18.2 percent from Rs. 1,060.62 crore in the year-ago quarter, with PAT rising 23.1 percent to Rs. 317.43 crore. Operating cash flow for the full year consolidated was Rs. 1,109.85 crore, a 38.5 percent jump from Rs. 801.06 crore  comfortably ahead of reported PAT, suggesting healthy earnings quality. Capex was Rs. 410.26 crore for the year. The balance sheet remains nearly debt-free, with only Rs. 1.21 crore in current borrowings against a net worth of over Rs. 11,698 crore.

Two items sit in the FY26 consolidated exceptional line, totalling Rs. 80.17 crore. The first  Rs. 54.19 crore  relates to a one-time past service cost recognised following the Ministry of Labour & Employment’s notification in November 2025 bringing the New Labour Codes into force. This covers obligations under the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code; the company notes it will continue to monitor final rule-making before booking any further adjustments.

The second component  Rs. 25.98 crore, net of insurance claim receivable  reflects inventory and capital work-in-progress damaged by cyclone Ditwah at the company’s Sri Lanka property (WelcomHotels Lanka). Both items are non-recurring in nature, and the underlying operating trajectory is cleaner once excluded.

The Hotels segment generated consolidated revenue of Rs. 3,859.83 crore in FY26, against Rs. 3,491.95 crore in FY25  growth of 10.5 percent. The segment’s EBIT contribution was Rs. 943.33 crore, up from Rs. 802.66 crore. The more striking development is the Real Estate segment, which reported revenue of Rs. 210.89 crore in FY26 against zero in FY25. This segment  comprising branded residences  was not an operational contributor in the prior-year comparative period. Its EBIT of Rs. 63.73 crore (against a Rs. 3.92 crore loss in FY25) is a meaningful addition, though the segment’s contribution remains modest relative to the hotels business.

The Board has recommended a final dividend of Rs. 1 per equity share of Rs. 1 face value  representing a full face value payout  for FY26. The total cash outflow on this account will be Rs. 208.30 crore. The record date is Thursday, 21 May 2026, which is six days away at the time of writing, and the dividend, if approved by members at the 3rd AGM on 6 August 2026, will be paid between 10 and 14 August 2026.

No dividend was paid in FY25. For a company that demerged from ITC Limited only in January 2025, recommending a dividend in its first full operational year as an independent entity is a deliberate signalling exercise about balance sheet confidence and FCF sustainability.

Corporate Governance

The Board has also proposed the appointment of Mr. Ramakrishnan Chander as a Non-Executive Director for three years from the AGM date, to represent the Life Insurance Corporation of India. This follows the March 2026 resignation of Mr. Tablesh Pandey, ITC Hotels’ previous LIC-nominated director. LIC’s continued institutional engagement via a board seat is a standard feature of the company’s governance structure.

Separately, FII ownership fell from 25.37 percent in March 2025 to 16.10 percent by December 2025  a material reduction over three quarters that deserves investor attention as the company builds its post-demerger institutional profile.

Business Overview

ITC Hotels Limited is India’s third-largest hotel chain by scale, operating over 140 hotels across 90-plus destinations under brands including ITC Hotels, Mementos, Storii, Welcomhotel, Fortune, and WelcomHeritage. The company became an independently listed entity following NCLT Kolkata’s approval of the demerger of ITC Limited’s hotels business, with an effective date of 1 January 2025.

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