Summary
Mahindra Holidays & Resorts India Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026 5:30 p.m. IST
Event Participants
Executives 2 Manoj Bhat (MD & CEO), Vimal Agarwal (CFO)
Analysts 6 Dhvaneet Savla (Savla Family Office), Krish Shewani (Crosseas Capital), Lokesh Srinivas (Aionion Capital), Navin (ithought PMS), Pankaj Kumar (Kotak Securities), Prashant Kshirsagar (Unived Corporate Research), Preeti Agarwal (SK Associates), Rama Krishna Nethi (Zen Wealth Management), Senthil Kumar (Joindre Capital Services), Shreyans Gathani (SG Securities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (Standalone) | ₹415 crores | +6% YoY; driven by a 14% growth in resort income. |
| Total Income (Consolidated) | ₹783 crores | +10% YoY; impacted by European macro headwinds and weather. |
| Resort Income (Standalone) | ₹145 crores | +16% YoY; reflects strong occupancy and higher ARR in the industry. |
| EBITDA (Standalone) | ₹149 crores | +17% YoY; margins expanded by 350 bps to 36% due to structural interventions. |
| PAT (Standalone) | ₹55 crores | +8% YoY; adjusted PAT is ₹61 crores (+17%) excluding forensics and labor code impact. |
| PAT (Consolidated) | ₹1.4 crores | Significant YoY decline; includes ₹11cr labor code impact and ₹6cr FOREX loss. |
| Total Member Additions | 1,493 count | Steady state QoQ; focus shifted toward high-value leads and digital sales. |
| Average Unit Realization (AUR) | ₹9.7 lakhs | +58% YoY; driven by higher value product mix and robust upgrade trends. |
| Room Inventory (Total) | 6,015 keys | 273 keys added in Q3; net addition slowed by planned exit of 450 keys YTD. |
| Occupancy | 81.5% | Strong performance on a larger inventory base despite December disruptions. |
| Cash Position | ₹1,470 crores | Healthy liquidity maintained as of Dec 31, 2025. |
Geographic & Segment Commentary
- Domestic (Club Mahindra): Performance remains robust with 81.5% occupancy and a 16% rise in resort revenue. The company is transitioning to a “partner-led” capital-light model for 70% of new additions while focusing on “Keystone” premium memberships.
- Holiday Club Resorts (HCR) - Finland: Performance was disappointing with a negative PAT of ₹3.8 crores due to lack of snow in December and the permanent loss of high-spending Russian tourists. Management expects an EBIT-level break-even for FY26 as Q4 is seasonally the strongest.
- New Growth (Signature Resorts): Strategic focus on launching the high-end “Mahindra Signature Resorts” brand, with the first greenfield project in Theog expected to be operational by the end of the financial year.
Company-Specific & Strategic Commentary
- Keystone Membership Launch: Introduced on Dec 17, 2025, simplifying 27 plans into 12 with added features like included breakfast and a buyback option; early data shows a 15-20% increase in AUR.
- Inventory Rationalization: Exited 7 underperforming resorts (approx. 450 keys) to elevate portfolio quality; management expects the relinquishing process to conclude by H1 FY27.
- Digital Sales (DigiSales): Adopted a completely digital assisted-selling model to optimize sales quality and reduce early-stage delinquency by cutting 40-50% of high-cost/low-quality market access points.
- Asset-Light Strategy: Targetting 1,000 gross keys annually with a 70:30 split between partner-led (leased/managed) and owned (greenfield) capital expenditure.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Gross Inventory Addition | 1,000 keys (FY26) | Expecting to reach gross target; net addition will be 450-500 keys after exits. |
| Long-term Inventory | 12,000 keys (FY30) | Split into 10,000 keys for Club Mahindra and 2,000 keys for Signature Resorts. |
| HCR EBIT | Break-even (FY26) | Based on normal weather returning in Jan and seasonally strong Q4. |
| Strategic Review (HCR) | FY27 Timeframe | Management will evaluate the future of the Finnish business given geopolitical shifts. |
Risks & Constraints
| Risk | Context |
|---|---|
| Geopolitical/Macro (Europe) | The Russia-Ukraine war has permanently removed 20-30% of high-spending demand in Finland, delaying HCR’s recovery. |
| Execution Delays | Partner-led projects currently face delays of 150-200 keys due to third-party construction timelines. |
| Regulatory (Labor Code) | New labor code implementation resulted in a ₹11 crore one-time provision; recurring impacts are expected but at much lower levels. |
| Seasonal Weather | Q3 performance in Finland was severely hit by a lack of snow, impacting timeshare and hotel revenue streams. |
Q&A Highlights
Inventory & Growth
- Question: What is the visibility on the room inventory funnel? (Navin, ithought PMS)
- Answer: Current funnel stands at 3,600 keys to be added over the next few years; 70-80% visibility for next year’s 1,000-key gross target (Manoj Bhat).
New Product (Keystone)
- Question: What makes Keystone different from previous plans? (Shreyans Gathani, SG Securities)
- Answer: It includes breakfast, a concierge service, fewer restrictions, and a buyback option. Early indicators show 15-20% higher AUR compared to old plans (Manoj Bhat).
European Operations
- Question: Why not divest the offshore business like the group did with SsangYong? (Senthil Kumar, Joindre Capital)
- Answer: The Finnish business was hit by a “perfect storm” of COVID, war, and weather. A strategic review is planned for FY27 after the business stabilizes (Manoj Bhat).
Sales Strategy
- Question: Why have sales and marketing expenses declined? (Preeti Agarwal, SK Associates)
- Answer: We proactively cut 40-50% of the market where cost of acquisition was high and member delinquency was early; focus is now on digital and referral sales (Manoj Bhat).
Key Takeaway
Mahindra Holidays delivered a resilient standalone performance in Q3 FY26, characterized by a 17% growth in Standalone EBITDA and a significant 58% jump in Average Unit Realization (AUR) to ₹9.7 lakhs. The strategic shift toward the “Keystone” premium membership and a digital-first sales model has successfully improved margins, even as the company aggressively pruned 450 underperforming keys from its portfolio to enhance quality. However, consolidated results were weighed down by the Finnish subsidiary (HCR), which suffered from geopolitical tensions and unseasonal weather, leading to a near-break-even consolidated PAT. Looking ahead, the company is focused on its “12,000 keys by 2030” vision, backed by a 3,600-key pipeline and the upcoming launch of the luxury Signature brand. While domestic leisure demand remains at record highs, the primary watch point remains the stabilization and potential strategic review of the European business in FY27.
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