Chalet Hotels

Chalet Hotels launched its new premium lifestyle brand, Athiva Hotels & Resorts, built on pillars of joy, wellness, and sustainability, marking an evolution towards an integrated brand-led hospitality platform. The iconic 'The Dukes Retreat' in Khandala has been relaunched as Athiva Resorts & Spa Khandala with 147 rooms. The company has identified five additional properties with 900 keys for transition into Athiva over the next few years. Management anticipates stable occupancies in the mid-60s and high margins for Athiva within 3-4 quarters, positioning it as a 5-star and 5-star Deluxe brand akin to Marriott, Taj, and Hyatt Regency.

Chalet Hotels reported a robust Q2 FY26, with consolidated revenue surging 94% year-on-year to INR7.4 billion. Consolidated EBITDA grew by 98% year-on-year to INR3.1 billion, leading to a 75 basis points expansion in margins to 41.4%. Excluding the residential project, the core hospitality and commercial businesses demonstrated strong double-digit growth, with revenues up 20% year-on-year to INR4.6 billion and EBITDAs up 25% year-on-year to INR2 billion, achieving a robust margin of 43.4%.

The hospitality segment's revenue increased 13% year-on-year to INR3.8 billion, primarily driven by a 16% growth in average room rates (ADR) to INR12,170. However, occupancy declined by 7 percentage points year-on-year to 67%, resulting in a 5% RevPAR growth to INR8,115. This performance was impacted by disruptive weather conditions, particularly in the Himalayas, and the ramp-up of newly added inventory at Bengaluru Marriott Hotel and seasonal softness at Westin Resort & Spa Himalayas. Despite these challenges, segment EBITDA grew 10% to INR1.5 billion, with margins at 40%.

The commercial real estate business demonstrated strong growth, with revenue rising 76% year-on-year to INR738 million and EBITDA growing 88% to INR607 million, achieving an impressive 82.3% EBITDA margin. Occupancy across the commercial portfolio stood at 77%, with committed occupancy at 79%, and a September exit run rate of INR245 million per month. The residential project, Vivarea in Bangalore, recognized INR2.8 billion in revenue from the sale of 55 apartments during the quarter at an average rate of INR21,300 per square foot. Cumulatively, 314 out of 321 units have been sold, generating INR1.3 billion in cash flows from collections this quarter.

Chalet Hotels plans a capex of INR25 billion over the next three years, primarily funded through internal accruals, with INR6.6 billion in capital work in progress and assets pending operationalization at quarter-end. The company's net debt stood at INR20.9 billion, and the average cost of finance contracted by 38 basis points quarter-on-quarter to 7.62%. INR2 billion of preference share capital from promoters was repaid, and INR1 billion was raised through a maiden commercial paper issuance at a 6.1% coupon. ICRA upgraded the credit ratings for Chalet Hotels from A+ to AA- stable for long-term credit, reflecting strong balance sheet and access to competitive capital.

The Delhi Airport hotel construction is on schedule, with opening expected in H1 FY27. The second commercial tower, Cignus 2 at Westin Powai Lake, is on track for completion in Q4 FY27. For the Varca, Goa property, the company aims to commence construction in Q4 FY26, pending final approvals. The Airoli project has seen positive movement with Supreme Court orders, and approvals are expected within the next 2-3 months. The Navi Mumbai hotel is expected to have over 270 rooms, with management optimistic about the market's favorability.

Chalet Hotels launched its ESG initiative, 'Parivartan', and successfully achieved 100% electric vehicles and EV charging stations in all operating assets by September 2025, ahead of its target date. The company demonstrated its commitment to shareholder value by declaring its maiden interim dividend of INR1 per share. Management expressed strong optimism for a robust operating performance in the second half of the year, anticipating continued growth driven by festive and holiday seasons, increased domestic travel, and the commencement of the MICE season.