Brigade Hotel Ventures Q1 FY27 earnings call

Brigade Hotel Ventures Limited reported a strong Q1 FY27, with total income growing 5% year-on-year to INR131 crores. Consolidated EBITDA increased by 9% year-on-year to INR46 crores, achieving an EBITDA margin of 34.8%, despite a 1.6% impact from GST 2.0. Profit after tax saw a significant surge of 140% year-on-year, rising from INR7 crores in Q1 FY26 to INR17 crores in Q1 FY27. The company's ARR improved by 7% year-on-year to INR7,241, and occupancy increased by 2% to 75.7%, culminating in a 9% year-on-year RevPAR growth to INR5,479.

The quarter was marked by the West Asia conflict, leading to airspace disruptions, elevated fuel costs, and persistent inflationary pressures, which impacted discretionary travel and event planning. This geopolitical shock resulted in an almost INR14 crores impact on revenue, representing about 10% of the overall top line, primarily due to cancellations and postponements of large MICE events. However, the company successfully anticipated reduced foreign travel and focused on generating demand from local and domestic accounts, allowing the underlying demand from corporate travel, weddings, and social events to largely absorb the shock.

The company has a clear growth runway with an additional 1,700 keys under development, aiming to expand its portfolio to 3,300 keys by FY31. This expansion will be anchored by premium brands like Grand Hyatt, InterContinental, JW Marriott, and The Ritz-Carlton across key cities. This strategy is expected to lift the luxury and upper upscale mix from 14% today to 31% by FY29 and 38% by FY31. Of the planned INR3,600 crores capex for this expansion, INR400 crores were invested in FY26, with another INR500 crores expected in FY27.

As of June 30, 2026, Brigade Hotel Ventures Limited maintained a net cash position of INR108 crores. Post-IPO, INR468.1 crores from the proceeds were deployed towards debt repayment, effectively eliminating institutional debt from the books. This deleveraging significantly reduced finance costs, which fell by over 50% from INR18.9 crores in Q1 FY26 to INR8.7 crores in Q1 FY27, contributing substantially to the profit after tax growth. The FY27 capex of INR500 crores will be funded through a balanced mix of 60% borrowing and 40% internal accruals.

The company announced a leadership change with Mr. Vinay Gupta replacing Mr. Manoj Agarwal as the new CEO of Brigade Hotel Ventures Limited. Mr. Gupta brings extensive experience from his previous roles with Accor, SAMHI, and InterGlobe. On the sustainability front, the company now utilizes renewable energy for 61% of its total energy needs across the portfolio, with several hotels already operating above 90% renewable energy usage, demonstrating a commitment to environmental stewardship.

While the overall portfolio showed resilience, the rebranding of 'Four Points by Sheraton Kochi Infopark' to 'Courtyard by Marriott Kochi Infopark' led to a significant dip in its occupancy in Q1 FY27, although its ARR increased from INR4,200 to INR4,650. The company expects this property's occupancy to trend back to the 70s in the coming quarter, with a minimum of 10% ADR growth this year. Bangalore hotels demonstrated strong performance with a 3% ARR growth, 8% occupancy increase, and 10% RevPAR growth, driven by a focus on domestic demand and strategic positioning.