Shares of Indian Hotels Company Ltd (IHCL) declined 2.66% to Rs 723.40 in Thursday’s trade, reacting to the company’s weaker-than-expected Q2 FY26 results, where profits fell sharply despite healthy revenue growth. The Tata Group–owned hospitality major reported a 48.6% year-on-year (YoY) decline in consolidated net profit to Rs 284.92 crore for the quarter ended September 2025, compared to Rs 554.58 crore in the same period last year.
Q2 FY26 performance highlights
During the quarter, IHCL’s revenue from operations rose 11.7% YoY to Rs 2,040.89 crore, up from Rs 1,826.12 crore in Q2 FY25, supported by robust demand across hotel and catering segments. However, rising expenses and higher operational costs weighed on profitability, with total expenses climbing to Rs 1,671.54 crore, compared to Rs 1,502.01 crore in the year-ago period.
At the operating level, the company posted an EBITDA of Rs 565 crore, up 16% YoY, while EBITDA margin expanded to 30.8% from 29.9% a year earlier — indicating efficiency improvement despite higher input costs.
Management commentary and outlook
Commenting on the results, Puneet Chhatwal, Managing Director and CEO of IHCL, said the company sustained its growth momentum with 46 new signings, expanding its portfolio to 570 hotels and crossing a milestone of 250 operating properties in India with over 25,000 rooms.
Chhatwal also highlighted the ongoing construction of Taj Bandstand in Mumbai, calling it an iconic project for the company. He added that the outlook for the second half of FY26 remains positive, supported by the recovery in corporate travel, wedding season demand, and global conventions.
Stock market reaction
Despite the operational improvement and steady growth outlook, investors reacted negatively to the sharp decline in net profit, leading to a sell-off in Thursday’s trade. IHCL shares dropped 2.66% to Rs 723.40 against the previous close of Rs 743.20, with an intraday low of Rs 715 on the NSE. The company’s market capitalization currently stands at Rs 1.03 lakh crore.
Market experts attributed the decline to margin concerns and rising costs, which overshadowed the top-line growth and management’s expansion commentary.
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