Summary
Apeejay Surrendra Park Hotels Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026 14:00 PM
Event Participants
Executives 2 Atul Khosla (SVP Finance and CFO), Vijay Dewan (Managing Director)
Analysts 4 Archana Gude (IDBI Capital), Jinesh Joshi (PL Capital), Madhav Agarwal (SKP Securities), Vaibhav Muley (Haitong Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹200 crores | +15.3% YoY (9M); first time crossing ₹200 crores in a single quarter. |
| EBITDA | ₹71 crores | 35.3% Margin; driven by pricing discipline and resilient demand. |
| Occupancy | 90% | Sustained leadership; The Park Kolkata achieved 100% benchmark occupancy. |
| Average Room Rate (ARR) | ₹13,376 - ₹31,967 | +11% YoY; premium luxury properties like Ran Baas seeing significant traction. |
| RevPAR | Various | +9% YoY; growth supported by corporate, wedding, and leisure segments. |
| Flurys Revenue | ₹1 crore (Daily Peak) | +19% YoY for Q3; 104 operational outlets currently active. |
| Net Worth | ₹1,329 crores | Strong capital base supporting both organic and inorganic expansion. |
| Net Debt | ₹154 crores | Gross debt of ₹236 crores offset by ₹58 crores in mutual fund investments. |
| Net Debt/Equity | 0.11x | Management targets a range of 0.1x to 0.2x through the growth cycle. |
Geographic & Segment Commentary
- Kolkata: The Park Kolkata continues as the flagship, maintaining 100% occupancy with an 11% growth in ARR. The upcoming EM Bypass project (The Park Unizen) will feature 218 rooms and 69 luxury serviced residences, expected to generate ₹300-350 crore in cash flow over three years.
- Mumbai & Pune: Completed 76% stake acquisition in Juhu, Mumbai, with plans to open an 88-key boutique hotel by March 2027. In Pune, FSI has increased significantly to 6.72 lakh sq. ft. due to the metro corridor, leading to a project reassessment for a potential residential/IT park cum hotel mix.
- Kerala (Luxury Leisure): Entered the market via the acquisition of Malabar House (Fort Kochi) and Purity (Vembanad Lake) for ₹64 crores. These properties currently command ARRs of ₹14,000-15,000 with significant potential for occupancy improvement and inventory expansion.
- Flurys (F&B): Revenue grew 19% in Q3 and 33% over 9M FY26. While store additions slowed in Q3 due to capital allocation toward hotel acquisitions, management plans to reach 120 stores by Q4 and 160 by FY27, shifting focus toward the cafe format.
Company-Specific & Strategic Commentary
- Asset Monetization: The Park Unizen serviced residences in Kolkata will be sold over the next three years, with 30% of the ₹350 crore expected in the first year to fund hotel construction.
- Digital & AI Integration: Launched “Nor1,” an AI-based upselling platform, alongside digital check-ins and intelligent guest engagement tools to improve monetization and operational efficiency.
- Portfolio Expansion: Plans to add 17 hotels (672 keys) over the next 14 months, targeting a total of 3,219 keys across 56 hotels by the end of FY27.
- Refurbishment Strategy: Approximately 10% of owned inventory (100 rooms/year) undergoes renovation at a cost of ₹25 lakh per room to maintain upper-upscale positioning.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Room Count | 3,219 keys by FY27 | Includes 17 new hotels; mix of managed, leased, and owned properties. |
| Flurys Revenue | ₹500 crores (3-4 years) | Driven by accelerated cafe expansion and high same-store growth (9%). |
| Debt/EBITDA | < 2.0x | Internal ceiling maintained to ensure sufficient financial cushion. |
| Capital Expenditure | ₹1,570 crores (Total Plan) | Covers Pune, Mumbai, Vizag, EM Bypass, and operational refurbishments. |
Risks & Constraints
| Risk | Context |
|---|---|
| Project Execution Delays | Shift in timelines for EM Bypass and Pune due to design reconfiguration and FSI changes; may impact near-term capacity growth. |
| F&B Retail Slowdown | Strategic slowdown in Flurys store additions in Q3 due to broader market softness in the F&B retail segment. |
| High Occupancy Constraints | 90%+ occupancy levels limit the ability to shut down rooms for larger renovation projects beyond 10% of inventory. |
Q&A Highlights
The Park Pune Reconfiguration
- Question: How does the increased FSI in Pune translate to room count or value? (Archana Gude)
- Answer: FSI increased from 2.5 lakh to 6.72 lakh sq. ft. (potentially 8 lakh for IT). We are reassessing the model to include residential or commercial components to maximize shareholder value (Vijay Dewan).
Flurys Strategy
- Question: Why was the addition of Flurys outlets subdued in Q3? (Archana Gude)
- Answer: Capital was prioritized for Juhu and Kerala acquisitions. We also recalibrated due to a general retail slowdown, focusing on revenue growth (19%) over store count (Vijay Dewan).
EM Bypass Changes
- Question: Why did the EM Bypass room/apartment count change? (Jinesh Joshi)
- Answer: Total FSI (600k sq. ft.) remains the same. We increased banqueting space for the hotel and reconfigured apartments to 4,000 sq. ft. units to maximize revenue (Vijay Dewan).
Capital Allocation & Debt
- Question: Will net debt rise significantly before project monetization? (Madhav Agarwal)
- Answer: No. Cash flows from Kolkata residence sales (₹350cr) start this year (30% in year one). We aim for Net Debt/EBITDA below 2.0x (Atul Khosla).
Key Takeaway
ASPHL delivered a record Q3 FY26, with consolidated revenues reaching ₹200 crores for the first time and maintaining industry-leading occupancy of 90%. The company is executing a dual-track strategy of aggressive inorganic expansion—highlighted by the Mumbai and Kerala acquisitions—and the monetization of high-value land parcels in Kolkata and Pune. Management is leveraging increased FSI in Pune and the sale of serviced residences at The Park Unizen to fund a ₹1,570 crore capex cycle while maintaining a conservative Net Debt/Equity ratio of 0.11x. Despite minor delays in project timelines and a tactical slowdown in Flurys store openings, the company remains committed to reaching 3,219 keys by FY27 and a ₹500 crore revenue target for Flurys. ASPHL’s focus on AI-driven upselling and high-margin experiential luxury (Ran Baas) positions it to capitalize on sustained demand in the upper-upscale segment.
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