Summary
Chalet Hotels Limited - Q3 FY26 Earnings Call Summary Tuesday, February 03, 2026 11:00 AM
Event Participants
Executives 3 Gaurav Singh (COO), Nitin Khanna (CFO), Shwetank Singh (MD & CEO)
Analysts 8 Abhay Khaitan, Adhidev, Awais Bakshi, Dipak Saha, Harshit Mantri, Jinesh Joshi, Karan Khanna, Rahul Jain, Prateek Kumar, Sameet Sinha, Vaibhav Malik
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹589.2 crores | +27% YoY; includes contribution from residential business. |
| Revenue (Ex-Residential) | ₹572.6 crores | +23% YoY; driven by strong RevPAR and inventory additions. |
| Consolidated EBITDA | ₹272.6 crores | +29% YoY; margins expanded 76 bps to 46.3%. |
| Hospitality RevPAR | ₹11,320 (approx.) | +12% YoY; driven primarily by 16% growth in ADRs. |
| Hospitality Occupancy | 71% | -230 bps YoY; impacted by inventory ramp-up in Bangalore/Khandala and renovations at Vashi/Powai. |
| Commercial Revenue | ₹74.4 crores | +29% YoY; EBITDA grew 37% with 83.5% margin. |
| Net Debt | ₹2,000 crores | Average cost of finance reduced 14 bps QoQ to 7.48%. |
| Residential Revenue | ₹16.6 crores | Recognized for 2 units handed over; 3 units sold at ₹20,500/sq. ft. |
Geographic & Segment Commentary
- Hospitality Segment: Revenue grew 23% YoY to ₹491.3 crores. Performance was bolstered by strong growth in Hyderabad, Pune, and Bangalore, while Mumbai (MMR) outperformed its broader market RevPAR despite temporary construction disruptions. The segment absorbed one-off costs of ₹2.5-3 crores related to excise licenses and property tax settlements.
- Commercial Real Estate (CRE): Currently at 83% occupancy with a December exit run rate of ₹25 crores monthly. Management expects to reach 90% occupancy at the Powai asset in the near term and targets a monthly rental run rate of ₹28-30 crores across the portfolio by FY27.
- Residential: Phase 1 of the Koramangala project is near completion with 152 units handed over. Phase 2 (168 units) is under development with handovers expected in FY27; the company is evaluating strata sale vs. leasing for the 160,000 sq. ft. commercial tower at this site.
Company-Specific & Strategic Commentary
- Brand Transition: The Aravali resort was rebranded to Aravali Marriott Resort & Spa following upgrades. The Vashi hotel is scheduled for rebranding to the homegrown “Athiva” brand in Q4 FY26.
- Strategic Acquisitions: The company is conducting due diligence for a resort asset in Udaipur and has submitted a bid for the JW Marriott Bangalore. Management intends to maintain a 20% leisure vs. 80% business mix.
- Asset Monetization & Liquidity: Raised ₹100 crores via Commercial Paper at a 6.3% rate. The CRE business now generates ₹300-400 crores in annual free cash flow, supporting future capex.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capex Outlay | ₹2,500 crores (FY27-FY29) | Planned for hospitality and CRE expansions, funded via internal accruals. |
| DIAL Taj Project | Partial launch Q4 FY27 | Delayed due to pollution-related construction stoppages; 150 rooms initially, reaching 380 by Q1 FY28. |
| Hyatt Regency Airoli | 36 months from start | Environmental clearance received; excavation to start in 2-3 months. |
| CRE Rental Income | ₹28-30 crores/month | Targeted monthly exit run rate for FY27 as new blocks stabilize. |
Risks & Constraints
| Risk | Context |
|---|---|
| Construction Disruptions | Ongoing work at CIGNUS II Powai has temporarily impacted crew business and banquet access at the adjacent hotel; expected to neutralize by FY27. |
| Regulatory Delays | The South Goa project is awaiting the formation of the local GCZMA committee for CRZ approvals, making commencement timelines uncertain. |
| Margin Dilution | Integration of leisure resorts (e.g., Himalayas, Khandala) naturally dilutes business-heavy margins as resorts typically operate at lower GOP levels. |
Q&A Highlights
Project Timelines
- Question: What is the ramp-up plan for the Delhi Airport (DIAL) hotel? (Adhidev)
- Answer: Work is now parallel rather than serial. We target 150 rooms by late FY27 and the full ~380 keys by Q1 FY28 (Shwetank Singh).
Margin Performance
- Question: What drove the Hospitality margin pressure this quarter? (Sameet Sinha)
- Answer: Impacted by ₹2.5-3 crore one-offs (excise/tax) and ramp-up costs for 129 new keys in Bangalore and 100 in Khandala. On a same-store basis, excluding one-offs, margins were flat (Nitin Khanna).
Athiva Brand Strategy
- Question: How has the Khandala property performed post-rebranding to Athiva? (Karan Khanna)
- Answer: Excellent reception with 5 full sold-out days in the first 45 days. ADRs have seen a “massive jump” and 26th Jan weekend was fully sold out via individual travelers (Shwetank Singh).
Competition & MICE
- Question: Is increased banquet competition in Mumbai affecting JW Marriott Sahar? (Vaibhav Malik)
- Answer: New inventory (like Jio Convention Centre) actually lifts the whole submarket. Our open-air venues differentiate us from competitors’ “hall-only” offerings (Gaurav Singh).
Key Takeaway
Chalet Hotels delivered a robust Q3 FY26 with a 27% YoY revenue increase, supported by strong ADR growth of 16% and the successful integration of new inventory in Bangalore and Khandala. While hospitality occupancy dipped to 71% due to asset stabilization and renovations, the Commercial RE segment reached an 83% occupancy level, providing a stable cash flow foundation with a targeted FY27 rental run rate of ₹28-30 crores monthly. Strategically, the company is pivoting toward its homegrown “Athiva” brand and upscale leisure assets, including the pending Pune/Udaipur expansions, to reach a 20% leisure mix. Looking ahead, management has committed ₹2,500 crores in capex through FY29, though the DIAL project faces a minor delay into Q4 FY27. The company remains well-positioned to benefit from recovering international travel and a young domestic population that increasingly views travel as a non-discretionary spend.
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