Brigade Hotel Ventures Limited

Brigade Hotel Ventures Limited delivered a solid Q3 FY26, with total income growing by 14% year-on-year to INR143 crores. This growth was primarily fueled by a 17% increase in both Average Room Rate (ARR) and Revenue Per Available Room (RevPAR), while occupancy remained healthy at 76.1%. EBITDA for the quarter rose by 17% to INR51 crores, resulting in a strong EBITDA margin of 35.9%. Profit After Tax (PAT) saw a significant surge of 126% year-on-year, reaching INR22 crores.

For the nine months ended FY26, the company's consolidated income stood at INR398 crores, marking a 19% increase from the previous year. EBITDA for this period was INR135 crores, up 17% year-on-year, with PAT at INR40 crores. The company noted a 1.6% impact on its Q3 FY26 EBITDA margin due to GST 2.0, specifically from input tax credit reversals for rooms priced below INR7,500. This impact is expected to continue until ADRs for these rooms cross the INR7,500 threshold.

Brigade Hotel Ventures plans to nearly double its portfolio by adding 1,700 new keys, bringing the total inventory to 3,300 keys by FY30, backed by an investment of INR3,600 crores. Approximately INR230 crores has been invested in the first nine months of FY26 for this pipeline, with an additional INR25-30 crores expected in Q4 FY26. The remaining INR3,200 crores will be deployed over the next four years, with an estimated INR400-500 crores for FY27. The company intends to fund a significant portion of this expansion through debt, projecting a peak net debt to EBITDA ratio of 4x-4.5x by FY29/FY30, while maintaining a healthy Debt Service Coverage Ratio (DSCR) of 4x covered until FY29.

As of December 31, 2025, the company reported a net cash position of INR132 crores. Management emphasized that there is currently no significant debt on the books, as all previous debt was repaid using IPO proceeds. The only outstanding amount is an INR148 crore loan from the parent company, which is also planned for repayment. This strong liquidity position provides a solid foundation for the planned capital-intensive expansion.

Bangalore demonstrated a very strong performance, with both ARR and RevPAR growing by 19% and an average occupancy of 76%. The company aims to increase Bangalore's occupancy to 80% or low 80s. A key strategic objective is to increase the ADR for seven of its nine hotels, which currently fall below the INR7,500 GST threshold, to mitigate the margin impact. The demand-supply dynamics in Bangalore, Chennai, and Hyderabad are favorable, with demand growth (10.1%) outpacing supply growth (7.3%) over the next five years.

While F&B growth in Q3 FY26 was 4% quarter-on-quarter, management clarified this was due to a one-off^📎 event and that, excluding this, the portfolio's F&B grew by 20%. For the nine months, F&B grew 16%, and management expects high teens growth going forward^⏳. The MICE (Meetings, Incentives, Conferences, and Exhibitions) segment also presents significant growth opportunities, with conference spaces currently operating at 40-50% occupancy, indicating clear room for expansion.

The company has several new properties in its pipeline. The Courtyard by Marriott at Chennai World Trade Centre (45 keys) is expected to become operational in FY27. For FY28, three hotels are slated to open: two Fairfield properties (construction has already commenced) and one Grand Hyatt Chennai. The Grand Hyatt Chennai, a low-rise beachfront property, is currently awaiting environmental clearance, which management hopes to secure within the current financial year.