Detailed Narrative
Q1 FY26 Consolidated and Core Business Performance
Chalet Hotels reported a robust Q1 FY26, with consolidated revenue surging 146% year-on-year to INR 9.1 billion and consolidated EBITDA growing 150% to INR 3.7 billion. The consolidated EBITDA margin expanded by 70 basis points to 40.9%. Excluding the residential project, core revenues (hospitality and commercial real estate) grew 27% year-on-year to INR 4.7 billion, with core EBITDA increasing 37% to INR 2.1 billion, and core EBITDA margin expanding 330 basis points to 44.4%.
Hospitality Segment Resilience and Growth Drivers
The hospitality segment's revenue grew 18% year-on-year to INR 3.9 billion, achieving an EBITDA of INR 1.6 billion (up 20% YoY) and a margin of 41.7%. RevPAR increased by 10% to INR 8,059, primarily driven by a 17% rise in ADR to INR 12,207. Despite a 4.4 percentage point decline in overall occupancy to 66% due to new inventory and external disruption🌐s, the company maintained strong rate performance, particularly in Bengaluru and Hyderabad markets.
Commercial and Residential Real Estate Contributions
The rental and annuity portfolio demonstrated strong growth, with revenue rising 106% year-on-year to INR 732 million and EBITDA increasing 130% to INR 608 million, yielding an impressive 83.1% EBITDA margin. Committed leasing for the commercial portfolio stands at 77%, with an expectation to reach around 90% occupancy in coming quarters. The Vivarea residential project in Koramangala recognized INR 4.4 billion in revenue from the handover of 95 units, contributing INR 1.6 billion to EBITDA.
Expansion Pipeline and New Inventory Additions
Chalet Hotels added 165 keys year-to-date, expanding its inventory by 5%. This included 121 rooms at Marriott Whitefield, Bengaluru, bringing its total to 512, with a final count of 520 rooms expected shortly. The Dukes Retreat in Khandala added 44 rooms, with 30 more to be completed soon, bringing the resort to 147 keys. Construction for the Delhi Airport hotel is on track for opening next year, and the CIGNUS II office tower is scheduled for completion in FY '27.
Capital Structure and Funding Strategy
The company's net debt stood at INR 20.2 billion, with the average cost of finance contracting by 40 basis points quarter-on-quarter to 8%. Chalet maintains a healthy liquidity position of INR 3.2 billion. A planned capex of INR 20 billion by FY '27 is primarily funded through internal accruals. The management aims to keep net debt to EBITDA within a 3.5x multiple and is well-capitalized to pursue both organic and inorganic growth opportunities.
Leadership Transition and Future Outlook
Dr. Sanjay Sethi announced his decision to step down as MD & CEO by January 31, 2026, with Mr. Shwetank Singh designated as his successor. The transition is part of a meticulous succession plan aimed at preserving strategic direction while infusing fresh energy. Management expressed confidence in achieving 5,000 rooms by the current financial year and maintaining double-digit RevPAR growth for the next 3-4 years, driven by a strong travel ecosystem in India.