Shares of ITC Hotels Ltd. experienced a 5% decline on July 16, 2026, even as the company reported a robust 35.42% year-on-year increase in net profit for the June quarter. The market reaction followed the announcement of a significant acquisition alongside the release of its Q1 financial results.
Q1 Profit Surges, Revenue Grows
For the quarter ending June, ITC Hotels posted a net profit of Rs 180.25 crore, a substantial jump from Rs 133.10 crore recorded in the same period last year. This represents a 35.42% growth year-on-year. Revenue from operations also saw healthy growth, increasing by 14.77% to Rs 936.02 crore, up from Rs 815.54 crore in the corresponding quarter of the previous fiscal year.
Strategic Acquisition of GHK Hospitality
In a separate update to stock exchanges, ITC Hotels confirmed it has executed a share purchase and share subscription agreement to acquire 100% of the share capital of GHK Hospitality & Infrastructures Limited. The transaction is valued at an enterprise value of Rs 155 crore, on a cash-free, debt-free basis, subject to customary adjustments. This strategic move aims to expand ITC Hotels' owned asset portfolio in Ahmedabad across all market segments.
GHK Hospitality & Infrastructures Ltd. is currently operated by ITC Hotels under an existing operating services agreement. The acquisition will allow the company to capitalize on Ahmedabad's diversified year-round demand. The investment in GHK will be made through both primary subscription and secondary purchase of equity shares, with the acquisition of shares expected to be completed within the June quarter.
Market Reaction
Despite the strong financial performance, the market's immediate response saw ITC Hotels' stock drop. Investors often react to acquisition announcements, factoring in integration challenges, financing structures, and the potential impact on short-term earnings, even when long-term strategic benefits are clear.