Summary
Viceroy Hotels Limited - Q3 FY26 Earnings Call Summary Wednesday, 11th February, 2026 4:00 PM IST
Event Participants
Executives 3 Anirudh Reddy (Non-Executive & Non-Independent Director), P.V. Krishna Reddy (Chief Financial Officer), Pradyumna Kodali (Chief Operating Officer)
Analysts 4 Esha Modi (MAS Capital Investment), Jay (Star Investments), Prateek Shah (Investing Alpha), Vivek Gupta (KTS Investments)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹38.33 crores | +1.5% YoY, +24.5% QoQ; driven by stronger occupancies and ADRs despite renovation constraints. |
| EBITDA | ₹12.09 crores | +6.5% YoY, +55.9% QoQ; margins expanded to 31.5% due to cost management and operating leverage. |
| Profit After Tax (PAT) | ₹10.9 crores | +50% YoY; PAT margins expanded to 28.5% reflecting underlying operational strength. |
| Finance Costs | ₹1.15 crores | -28.6% YoY; improvement attributed to better debt servicing and balance sheet discipline. |
| ADR (Marriott) | ₹8,135 | +10.3% YoY; reflects healthy demand in the central business district. |
| ADR (Courtyard) | ₹8,386 | +11.3% YoY; premium new rooms expected to command 25-30% higher future ADRs. |
| RevPAR (Combined) | ₹5,235 | Blended rate across Marriott (₹6,200) and Courtyard (₹3,539). |
| Inventory (Current) | 538 keys | Includes 463 rooms across flagship properties + 75 newly acquired executive rooms. |
Geographic & Segment Commentary
- Hyderabad (Core Market): The city serves as the primary growth engine, benefiting from a diversified demand mix across IT, Pharma, and Life Sciences. Management highlighted the upcoming Southern high-speed rail corridor (2-3 hour connectivity to Bangalore/Chennai) and airport expansion to 80 million passengers as massive long-term catalysts for RevPAR growth.
- Premium Extended Stay: Following the ₹215 crore acquisition of Marriott Executive Apartments in Gachibowli, the company has entered the high-margin long-stay segment. This 75-key asset targets the influx of Global Capability Centers (GCCs) and corporate travelers requiring apartment-style accommodations with kitchens.
- Food & Beverage (F&B) and MICE: F&B currently contributes 45% of total revenue, with a target to reach 48% post-renovation. The expansion of the Marriott convention facility to 20,000 sq. ft. aims to capture the growing MICE (Meetings, Incentives, Conferences, and Exhibitions) demand in Hyderabad.
Company-Specific & Strategic Commentary
- Asset Acquisition: Acquired Marriott Executive Apartments for ₹215 crores; the asset delivered ₹48 crore revenue and ₹21 crore EBITDA in CY25, with financial accretion starting Q4 FY26.
- CAPEX Program: Executing a ₹120 crore phased investment plan; ₹50 crore already spent on Courtyard (completed), with the remaining ₹70 crore allocated for Marriott room refurbishments and convention center expansion by Dec 2026.
- Portfolio Expansion: Targeted growth to 1,000 keys by 2030, supported by the existing portfolio, the recent Gachibowli acquisition, and a Greenfield project in progress at Madhapur.
- Operational Turnaround: Successfully transitioned post-Resolution Plan (Oct 2023), moving toward a long-term EBITDA margin benchmark of 40% (currently 31.5%).
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | >30% (Near term) / 40% (Long term) | Expected from higher ADRs on renovated rooms and operating leverage. |
| Convention Capacity | 20,000 sq. ft. by Dec 2026 | Doubling existing capacity at Marriott to capture MICE demand. |
| F&B Revenue Share | 48% Post-Renovation | Driven by the addition of a 6th restaurant (rooftop bar) and expanded banqueting. |
| Industry Growth | 15% - 17% CAGR through 2030 | Management expects to outperform general market growth via strategic Hyderabad positioning. |
Risks & Constraints
| Risk | Context |
|---|---|
| Renovation Disruptions | 9-month revenue saw a 2.7% YoY decline due to inventory being pulled offline for upgrades; management is phasing Marriott work to mitigate this. |
| Supply Pipeline | While currently disciplined, any sudden influx of speculative premium supply in the Gachibowli/Madhapur micro-markets could pressure ADR growth. |
| Execution Risk | The Greenfield project in Madhapur is still in land conversion/design stages, making its timeline subject to regulatory approvals. |
Q&A Highlights
CAPEX Allocation
- Question: How will the remaining ₹70 crore CAPEX be deployed? (Vivek Gupta)
- Answer: ₹20-30 crore for the convention center (April-Dec), ₹40 crore for refurbishing 295 Marriott rooms, and ₹10-15 crore for Phase 3 lobby and rooftop upgrades (Anirudh Reddy).
Strategic Rationale for Acquisition
- Question: Why acquire the Marriott Executive Apartments? (Vivek Gupta)
- Answer: It fills a gap in “long-stay” inventory which is undersupplied in Hyderabad. It is a “pure room play” with high margins and immediate revenue visibility (Anirudh Reddy).
F&B Yield and Initiatives
- Question: What initiatives are driving higher yields in F&B? (Esha Modi)
- Answer: The new rooftop bar is expected to generate ₹50 lakhs/month. We are also expanding Outdoor Catering (ODC) for corporate offices near our three hotels (Pradyumna Kodali).
High-Speed Rail Impact
- Question: How will the Southern High-Speed Rail corridor impact demand? (Jay)
- Answer: The station will be near the airport, which is well-connected to our properties. It will dramatically increase corporate mobility from Bangalore and Chennai (Anirudh Reddy).
Key Takeaway
Viceroy Hotels Limited delivered a resilient Q3 FY26 performance, characterized by a 50% YoY increase in PAT and EBITDA margins expanding to 31.5%. Despite temporary revenue pressure from renovation-led inventory constraints (9-month revenue down 2.7%), the company successfully completed its ₹50 crore Courtyard upgrade, leading to a 25-30% premium in ADRs for new rooms. Strategically, the ₹215 crore acquisition of Marriott Executive Apartments adds a high-margin long-stay vertical to their portfolio, aligning with their “1,000 keys by 2030” vision. Management is now pivoting focus toward doubling Marriott’s convention capacity to 20,000 sq. ft. to capitalize on Hyderabad’s emergence as a MICE hub. Looking forward, the combination of a leaner balance sheet (finance costs down 28.6%) and a 15-17% projected industry CAGR positions Viceroy to target long-term EBITDA margins of 40%, provided they navigate the execution of their Madhapur Greenfield project and phased refurbishments without significant operational slippage.
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