ITC Hotels proved the scepticsim over the hospitality industry wrong by recording an over 95% rise in profits in the fourth quarter of 2002-03.
The sterling results brought in solid gains of 5.74% (to Rs 48.85) for the scrip of the hospitality company by 9:58 IST today. Just 100 shares were traded on the counter by then, though. ITC Hotels has now risen 17.2% from Rs 41.70 on 13 May 2003.
For Q4 ended 31 March 2003, ITC Hotels posted a massive 95.5% rise in net profit to Rs 4.32 crore (Rs 2.21 crore) on a 21.6% increase in total income to Rs 39.23 crore (Rs 32.27 crore).
For FY 2002-03, the company bounced back into the black by recording a net profit of Rs 0.57 crore compared to a net loss of Rs 3.12 crore in the year ended 31 March 2002. Total income increased by 8% to Rs 122.63 crore from Rs 113.41 crore in FY 2001-02.
ITC Hotels, a 72% owned subsidiary of tobacco major ITC, and which manages many of the hotels of the Welcom group, said it was able to turn around due to the rise in occupancy rates. This, despite the fact that recent government figures suggested that tourist arrivals into the country fell in 2002. Besides, anxiety over the prospects of the hospitality industry ran high all through last year (over the global economic recession) and the beginning of this year (over tensions in West Asia, terrorism and the incidence of SARS in Asia).
ITC group, which has 44 properties around the country, is all set to unveil a new state-of-the-art corporate headquarters in Gurgaon. The new premises, over a sprawling one lakh square feet at the ITC Centre in Gurgaon, will be the hub of India's third largest hotel chain. The group plans to invest Rs 35 crore in its new office as part of ITC Welcomgroup's Rs 1,500-crore expansion plan (which includes many new high end business hotels). The roll-out is primarily focused on positioning ITC Hotels as the logical destination for the upmarket business traveller in the six key metro cities.
The shift to the new headquarters by 2004 is part of the plan to become a high end player in the hospitality business.
The group which had unveiled the five-star deluxe property Grand Maratha (390 rooms) in Mumbai a year back is set to open its second property Grand Central in Mumbai by 2004. The Kolkata property, Sonar Bangla (240 rooms), was inaugurated on the last day of 2002.
The company can also look forward to benefits from incentives in the Union Budget 2003-04. These include the abolition of expenditure tax in hotels, the exemption of luxury tax by the Centre (which has been maintained) and the exemption or reduction of luxury tax levied by state governments.
