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Financial

ITDC Q3 FY26 Results: Net Profit Soars 35% to ₹283 Crore; Auditor Raises Concerns

ITDC Q3 FY26: Profit surges 35% YoY to ₹283 Crore. Auditors issue qualified report over ₹187 Cr GSA non-compliance & expired licenses. Key disinvestment updates inside.
ITDC Q3 FY26 Results: Net Profit Soars 35% to ₹283 Crore; Auditor Raises Concerns

Mumbai: The Board of Directors of India Tourism Development Corporation Limited (ITDC) approved the unaudited financial results for the quarter and nine months ended December 31, 2025. The state-owned hospitality giant reported robust profit growth, although its auditors issued a report with significant qualifications and emphasis on several operational lapses.

 

Q3 FY26 Standalone: Key Financial Highlights

  • Net Profit: Surged by 34.7% to ₹282.86 Crore, up from ₹210.01 Crore in Q3 FY25.

  • Total Income: Grew by 27.7% to ₹1,910.11 Crore.

  • Profit Before Tax (PBT): Increased by 26.8% to ₹386.95 Crore.

  • Earnings Per Share (EPS): Stood at ₹3.30 for the quarter.

  • Hotel Division: Contributed the largest share of revenue (₹968.72 Crore) and profit (₹294.84 Crore before tax & interest).

 

Also Read: SCI Q3 Results: Net Profit Surges 140% to ₹427 Cr | Declares ₹3.5/Share Dividend

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Auditor's Qualified Review Report: Key Concerns

The statutory auditor, HDSG & Associates, issued a "qualified conclusion" on the financial results, highlighting several serious issues:

  1. Ashok Tours & Travels (ATT) Delhi: Significant non-compliance with a General Sales Agent (GSA) agreement with M/s Shree Plan Your Journey Pvt. Ltd. The auditor noted:

    • Receivables of ₹187.13 Crore were not fully covered by security deposits as per agreement terms.

    • Various agreement conditions (credit limits, monthly evaluations, additional bank guarantees) were not enforced.

    • Impact: Auditor unable to comment on the final recoverability of outstanding amounts or compliance implications.

  2. Emphasis of Matter (Other Key Issues):

    • Unclaimed License Fees: ₹129.26 Crore in license fees from Hotel Ashok/Samrat not billed since FY21 due to licensee disputes.

    • Property Tax Dispute: Ongoing dispute with NDMC; ₹1.75 Crore provided in Q3 based on a settlement proposal.

    • DDA Dues: ₹98.96 Crore receivable from DDA for Commonwealth Games work for over 3 years, with no provision made.

    • Poor Record Keeping: PPE records not properly maintained or reconciled; unlinked customer receipts of ₹33.32 Crore.

    • Expired Licenses: Hotel Ashok operating based on several expired licensee agreements.

    • Maha Kumbh Project: Final reconciliation and certification by an independent CA firm for the Prayagraj project is pending.

Operational & Strategic Update

  • Disinvestment Process: The long-pending strategic disinvestment of multiple hotel properties (Ashok, Janpath, Kalinga Ashok, Pondicherry Ashok, etc.) remains in progress at various stages with DIPAM and state governments.

  • Subsidiary Share Transfers: The transfer of 51% stakes in Punjab Ashok and Ranchi Ashok hotels to respective state governments is underway, pending final approvals and settlements.

  • Audit Committee Vacancy: The company could not convene an Audit Committee meeting due to having only one Independent Director, failing the SEBI LODR quorum requirement. The results were directly placed before and approved by the Board.

 

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Outlook

ITDC's Q3 financial performance shows strong profitability growth in its core hotel operations. However, the auditor's report casts a long shadow, revealing significant governance and operational control weaknesses, particularly in its travel division and contract management. The company's future hinges on resolving these internal control issues and making progress on the long-stalled disinvestment of its non-core assets to unlock value.

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