Brigade Hotel Ventures Limited — Q2 FY26 earnings call

Call held 27 Oct 2025

Management summary

Brigade Hotel Ventures Limited reported a strong Q2 FY26, with total income growing 20% YoY to INR 130 crores and PAT surging 58% YoY to INR 11 crores. Operational EBITDA, excluding a one-time property tax impact, saw a 25% YoY growth. The company is expanding its portfolio with a planned capex of INR 3,600 crores over five years, primarily back-ended, and expects continued strong performance in H2 FY26 driven by robust demand and strategic initiatives.

Highlights

  • Total income grew 20% YoY to INR 130 crores in Q2 FY26, demonstrating strong top-line performance.

  • Profit After Tax (PAT) surged 58% YoY to INR 11 crores in Q2 FY26, indicating improved profitability.

  • Operational EBITDA, excluding a one-time property tax expense, registered a 25% YoY growth.

  • Bangalore hotels delivered a strong performance with ARR growing 19% and RevPAR up 14% YoY, maintaining 75.6% occupancy.

  • Utilities as a percentage of operating revenues decreased to 5.6% for Q2 and 5.7% for H1, down from 7% in previous quarters, reflecting effective cost control.

Concerns

  • EBITDA growth was impacted by a one-time additional property tax expense of INR 6 crores, reducing reported growth from 25% to 9%.

  • Occupancy in Bangalore hotels slightly decreased from 81% to 78%, contributing to RevPAR growing slower than room revenue.

Key financials

3 periods

Headline

  • Net Cash (Sep 30, 2025)
    ₹111 Cr
  • Adjusted ROCE
    9.9%

Q2 FY26

  • Total Income
    ₹130 Cr
    YoY +20%
  • EBITDA
    ₹41 Cr
    YoY +9%
  • PAT
    ₹11 Cr
    YoY +58%
  • ARR
    ₹7,106
    YoY +13.7%
  • Occupancy
    75.6%
  • RevPAR
    ₹5,374
    YoY +13%

H1 FY26

  • Total Income
    ₹255 Cr
    YoY +21%
  • EBITDA
    ₹83 Cr
    YoY +16%
  • PAT
    ₹18 Cr
    YoY +1,700%

What they filed

Q1 FY27: revenue up 2.4%, net profit up 142.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue108 124 134 124 126 +17%139 +12%136 +1%127 +2%
EBITDA37 43 50 41 37 +0%47 +9%49 −2%42 +2%
Net profit7 10 13 7 11 +57%22 +120%25 +92%17 +143%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹3,600 Cr
    • New hotel development (Courtyard by Marriott Chennai, Fairfield by Marriott Bangalore, Grand Hyatt Chennai, Intercontinental Hotel Hyderabad, Ritz-Carlton Wellness Resort Vaikom, JW Marriott Chennai, Marriott Thiruvananthapuram, upscale hotel near Tumkur Road Bangalore)
    Key upcoming projects include the Courtyard by Marriott in our Chennai World Trade Centre project, two Fairfield by Marriott hotels in Bangalore, the Grand Hyatt Chennai on ECR, which is a leisure five-star deluxe hotel, and the Intercontinental Hotel in Hyderabad, a landmark luxury development, as well as the Ritz-Carlton Wellness Resort in Vaikom, Kerala. We also have a JW Marriott in Chennai on Old Mahabalipuram Road and a Marriott in Thiruvananthapuram as part of our World Trade Centre Trivandrum Complex. And we have purchased the land for an upscale hotel near Tumkur Road in Bangalore. We are looking at a total capex investment of INR 3,600 crores over the next five years for these hotels.
  • Debt Debt disclosed
    • Repayment Utilized from IPO proceeds for debt repayment, resulting in significant interest savings. ₹468 Cr
    From our IPO proceeds of INR886 crores, INR468 crores was utilised in Q2 FY2026 for debt repayment resulting in significant interest savings.
  • M&A Prime land parcel Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    For future hotel development

    As of September 2025, we deployed an additional INR107 crores for the acquisition of prime land parcel from our promoter and INR17 crores towards general corporate purposes.
  • Liquidity Cash ₹111 Cr Net cash as on 30th September 2025.
    Our net cash as on 30th September 2025 stood at INR111 crores and adjusted ROCE were 9.9%.

Guidance & targets

Capacity

  • Hotel Keys Addition Capacity · next five years · High confidence 1,700 keys
    our model is a blend of asset ownership and global management partnerships with world class hospitality leaders. Continuing with our philosophy of owning quality hotel assets at the right location, we are now entering a strategic phase of expansion aiming to double our hotel portfolio by adding approximately 1,700 keys over the next five years.

    — Nirupa Shankar

Capex

  • Total Capex Investment Capex · next five years · High confidence INR 3,600 crores
    We are looking at a total capex investment of INR 3,600 crores over the next five years for these hotels.

    — Nirupa Shankar

Outlook

  • Growth Momentum Outlook · H2 FY26 · Medium confidence sustain
    Looking ahead, we expect this growth momentum to sustain in H2 FY26, supported by robust corporate demand, festival travel, longer leisure stays and the wedding season.

    — Nirupa Shankar

ARR Growth

  • ARR Growth Rate ARR Growth · next two quarters · Medium confidence mid-teens to high-teens
    So I would like to maintain that we can stick to mid-teens to high-teens for the next two quarters.

    — Nirupa Shankar

RevPAR

  • RevPAR for October RevPAR · October 2025 · Medium confidence mid-teens
    In terms of RevPAR, we expect to keep it in the mid-teens.

    — Nirupa Shankar

What to watch in Q3 FY26

Progress on new hotel development (capex phasing)

Next quarter / H2 FY26
Current Design development, excavation for Intercontinental Hyderabad
Target Commencement of construction for specific projects, particularly the mall/WTC in Hyderabad

Why it matters

Tracks the execution of the significant INR 3,600 crore capex plan and the expansion pipeline, which are key to future growth.

when it comes to our hotels, we have started some construction but mostly under design development. And in this year, we have a cash balance of about INR350 odd crores, Overall IPO proceeds and internal accruals, but we may not land up using all of it just yet. So, like I said, it will be phased over five years and primarily back-ended.

Risks & concerns

  • Impact of one-time property tax expense on EBITDA

    medium

    INR 6 crores property tax expense impacted Q2 FY26 EBITDA, reducing reported growth from 25% to 9%.

    Management acknowledged

Q&A highlights

8 direct
Capex phasing for the INR 3,600 crores planned over the next five years. Direct
most of the capex is usually back-ended in the design development phase and very initial amount for approval... Maybe 60% could be coming in the third year and maybe even in the fourth year.

Clarifies the capital expenditure timeline, indicating that the majority of the spend will occur in later years, which impacts cash flow and project completion timelines.

Asked by Adhidev Chattopadhyay

Timeline for the Intercontinental Hotel Hyderabad project within the overall capex plan. Direct
first the excavation is under progress and we should be starting with the mall initially, then the WTC, Hyderabad and only then will the hotel come up. However, some of the structural costs are common. So, our part will begin only after a year and a half or so.

Provides specific sequencing and timeline for a key luxury development, indicating that the hotel component is still some time away and will not contribute to revenue in the immediate future.

Asked by Adhidev Chattopadhyay

Business outlook for H2 FY26, specifically October, November, and December. Direct
October is a little bit on the slower side as expected and it's been budgeted already because of Diwali festivals and some long weekends. But we should be able to make it up between November and December which are clean months and those two months are looking extremely strong. So, nothing of concern for us in Q3 and Q4.

Gives short-term guidance on demand trends, reassuring investors about the overall strength of the second half despite a slower October due to festive holidays.

Asked by Adhidev Chattopadhyay

Explanation for the INR 45 crores movement from changes in working capital in H1 FY26. Direct
the INR45 crores consist of, there is a movement of trade payable because of provisioning for the bankers' payment for issue expenses we have provided, which is around INR20 crores. And there is a reduction in other assets, which is, we have kept whatever was last year paid towards issue expenses, we kept as a prepaid, which has moved. That is around INR13 crores.

Provides a detailed breakdown of a significant cash flow item, clarifying that it's largely due to non-operational, one-off adjustments related to IPO expenses rather than core operational working capital.

Asked by Murtuza Arshiwalla

Factors contributing to the 'extremely strong' ARR performance. Direct
revenue management teams are always figuring out how to best balance between rate and occupancy. Wherever possible, we do try to see for rate enhancement as possible while keeping occupancy levels high... It's more of a revenue management play based on how we see the trends and the high demand dates. And of course, our hotels have also had a good number of large conferences.

Explains the strategy behind the strong ARR growth, highlighting active revenue management and the benefit from high-demand events and large conferences.

Asked by Murtuza Arshiwalla

Discrepancy between 18% room revenue growth and 14% RevPAR growth, and the impact of Mysore hotel. Direct
the RevPAR grew by lower because the occupancy also came down a little bit. Because the Mysore hotels, of course, have a lot lower occupancy. So that also reduces the RevPAR. But overall, I would say, it's basically the fact that occupancy came down insane in some of the hotels. And for instance, in Bangalore hotels, we were at 81% occupancy. And that has actually come down to 78%.

Clarifies that lower occupancy, particularly from newer/lower-occupancy hotels like Mysore and a slight dip in Bangalore, diluted the overall RevPAR growth despite strong ARR.

Asked by Sumit Kumar

Nature and recurrence of the INR 6 crores property tax impact. Direct
this was only for the Grand Mercure Bangalore. It seems to be a one-time expense. And it was basically how the property tax was assessed. So, there's a difference in the way it was assessed and hence we paid it off.

Confirms the one-time nature and specific property for the INR 6 crore property tax expense, alleviating concerns about recurring impacts or broader issues.

Asked by Sumit Kumar

Long-term impact of new luxury/upper upscale additions on average ARR. Direct
once the luxury properties come within the portfolio then at least a third of our portfolio will be in the 5-star luxury deluxe category and we will have about 6 of the 18 hotels in the 5-star luxury deluxe category. So you should see a significant uptake in the ARR. But just to clarify that these will come only towards the end of FY28 and some in FY29.

Provides a clear long-term vision for portfolio premiumization and its positive impact on ARR, while also setting realistic expectations for the timeline of these benefits.

Asked by Raghav Malik

3 min read 7 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Brigade Hotel Ventures Limited reported a robust Q2 FY26, with total income increasing by 20% year-on-year to INR 130 crores, up from INR 108 crores in Q2 FY25. EBITDA for the quarter rose 9% year-on-year to INR 41 crores, despite being impacted by a one-time property tax expense of INR 6 crores. Excluding this impact, operational EBITDA would have grown by 25% year-on-year. The company's profit after tax (PAT) saw a significant jump of 58% year-on-year, reaching INR 11 crores compared to INR 7 crores in the prior year.

H1 FY26 Consolidated Performance

For the first half of FY26, Brigade Hotel Ventures Limited recorded a total income of INR 255 crores, marking a 21% increase from INR 211 crores in H1 FY25. EBITDA for the period grew 16% year-on-year to INR 83 crores, up from INR 72 crores. The company's PAT for H1 FY26 stood at INR 18 crores, a substantial improvement from INR 1 crore in H1 FY25, reflecting strong operational leverage and reduced interest costs.

Operational Metrics and Market Performance

In Q2 FY26, the company achieved an Average Room Rate (ARR) of INR 7,106, a notable increase from INR 6,247 in Q2 FY25. Occupancy for the quarter was 75.6%, leading to a RevPAR of INR 5,374, which represents a 13% year-on-year growth. Bangalore hotels demonstrated strong performance with ARR growing 19% and RevPAR up 14%, despite a slight dip in occupancy from 81% to 78%. The newly launched ibis Styles Mysuru achieved 61% occupancy in its fourth quarter of operations, contributing to the overall portfolio.

Strategic Expansion and Capex Plans

Brigade Hotel Ventures Limited is embarking on a strategic expansion phase, aiming to double its hotel portfolio by adding approximately 1,700 keys over the next five years. This expansion involves a total capex investment of INR 3,600 crores. Key upcoming projects include multiple Marriott brands, Grand Hyatt Chennai, Intercontinental Hotel Hyderabad, and Ritz-Carlton Wellness Resort in Vaikom. The capex is primarily back-ended, with significant spending expected in the third and fourth years of the five-year plan.

IPO Proceeds Utilization and Financial Health

Out of the INR 886 crores raised from the IPO, INR 592 crores have been deployed by September 2025. This includes INR 468 crores utilized in Q2 FY26 for debt repayment, resulting in significant interest savings. An additional INR 107 crores was deployed for the acquisition of a prime land parcel, and INR 17 crores for general corporate purposes. As of September 30, 2025, the company maintained a net cash position of INR 111 crores, with an adjusted ROCE of 9.9%.

Cost Management and Sustainability Initiatives

The company has made concerted efforts in cost control, with utilities as a percentage of operating revenues reducing to 5.6% for Q2 and 5.7% for H1, down from 7% in previous quarters. Interest costs have also decreased due to debt repayments. Furthermore, Brigade Hotel Ventures is actively advancing renewable energy adoption, with close to 60% of its energy needs met by renewable sources, and some hotels exceeding 90%.

Outlook for H2 FY26

Management expressed confidence in sustaining the growth momentum into H2 FY26, anticipating strong performance driven by robust corporate demand, festival travel, longer leisure stays, and the wedding season. While October was budgeted to be slightly slower due to Diwali and long weekends, November and December are expected to be 'extremely strong.' The company aims to maintain ARR growth in the mid-teens to high-teens for the next two quarters.

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