Chalet Hotels Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Chalet Hotels delivered a strong Q3 FY26, driven by robust growth in both hospitality and commercial real estate segments. The company reported significant revenue and EBITDA growth, alongside healthy margins. Strategic initiatives like rebranding of properties and new project developments are progressing, with a focus on expanding leisure footprint and stabilizing new inventory. The company maintains a strong balance sheet and liquidity position to support future growth.

Highlights

  • Consolidated Revenue grew 27% YoY to ₹589.2 crores.

  • Consolidated EBITDA increased 29% YoY to ₹272.6 crores, with margins at 46.3% (up 76 bps).

  • Ex-residential Revenue grew 23% YoY to ₹572.6 crores, and EBITDA grew 24% YoY to ₹268.6 crores.

  • Hospitality business RevPAR grew close to 12%, driven by 16% ADR growth.

  • Commercial Real Estate (CRE) revenue rose 29% YoY to ₹74.4 crores, with EBITDA up 37% YoY to ₹62.1 crores.

  • Net debt stood at ₹2,000 crores, with average cost of finance reducing to 7.48%.

  • Planned capex of ₹2,500 crores for FY27-FY29, primarily funded by internal accruals.

  • Delhi Airport hotel partial launch expected by Q4 FY27, with all 380 rooms operational by Q1 FY28.

Key financials

  1. Consolidated Revenue ₹589.2 Cr +27%YoY
  2. Consolidated EBITDA ₹272.6 Cr +29%YoY
  3. Consolidated EBITDA Margin 46.3%
  4. Ex-Residential Revenue ₹572.6 Cr +23%YoY
  5. Ex-Residential EBITDA ₹268.6 Cr +24%YoY
  6. Ex-Residential EBITDA Margin 46.9%

What they filed

Q1 FY27: revenue down 42.8%, net profit down 57.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue377 458 522 895 735 +95%582 +27%558 +7%512 −43%
EBITDA150 205 241 357 299 +99%265 +29%266 +10%234 −34%
Net profit-139 97 124 203 155 +212%124 +28%163 +31%86 −58%
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.

Segment breakdown

Share of Revenue
₹582.3 Cr Total
  • Hospitality ₹491.3 Cr 84.4%
  • Commercial Real Estate (CRE) ₹74.4 Cr 12.8%
  • Residential ₹16.6 Cr 2.9%

Capital allocation

high confidence
  • Capex ₹2,500 Cr primarily funded through our internal accruals
    We have planned capex of around INR25 billion over FY '27 to FY '29, covering our Hospitality and Commercial Real Estate business. This will be primarily funded through our internal accruals.
  • Debt Net ₹2,000 Cr Cost 7.5%
    • New borrowing Issued commercial paper at a fixed coupon of 6.3%, rated A1+ by CRISIL. ₹100 Cr
    Our net debt stood at INR20 billion with the average cost of finance reducing further by 14 bps quarter-on-quarter to 7.48%.
  • M&A Udaipur resort asset Acquisition · Pending regulatory

    Expand leisure footprint

    Requires extensive refurbishment work and additional rooms; details on capex and room count to be provided post due diligence.

    With respect to the resort asset at Udaipur, the due diligence process is still on, and we cannot speak about it further until all the steps are closed.
  • M&A JW Marriott, Bangalore Acquisition · Announced

    Asset is attractive, company is in the bidding race.

    No. We are definitely in the race. We like that asset, and we have put in our bid as many others have.
  • Liquidity Liquidity disclosed Maintained a healthy liquidity position of INR 3.8 billion at the end of the quarter.
    We maintained a healthy liquidity position of INR3.8 billion at the end of the quarter.

Guidance & targets

Hospitality

  • Vashi Hotel Rebranding Hospitality · Q4 FY26 · High confidence Rebranded as Athiva
    Apart from Khandala, we are expecting our Vashi hotel to be rebranded as Athiva in Q4 FY '26 from Four Points by Sheraton currently.

    — Shwetank Singh

  • Bangalore New Rooms Stabilization Hospitality · next two to three quarters · Medium confidence Stabilize
    And over the next two to three quarters, we expect these rooms to stabilize.

    — Shwetank Singh

  • Resort Occupancy Hospitality · Medium confidence 65-70%
    When it comes to the resort, resorts typically don't tend to operate at such high levels of occupancy, and we expect an occupancy in the range of 65% to 70%.

    — Shwetank Singh

  • Leisure Segment Mix Hospitality · Medium confidence 20%
    And also, just to finish that off, we had taken a conscious call that we wanted to spread our eggs a little, and we want to get up to around the 20% number on the overall business versus leisure mix.

    — Shwetank Singh

  • Overall Revenue and RevPAR Growth Hospitality · coming year · Medium confidence Stay strong
    So, we still expect to stay strong in revenue and RevPAR growth for the coming year.

    — Shwetank Singh

Commercial Real Estate

  • Powai Occupancy Commercial Real Estate · near term · Medium confidence 90%
    With multiple ongoing discussions, we expect to reach 90% occupancy at Powai in the near term.

    — Nitin Khanna

  • Powai Rentals Start Commercial Real Estate · Q4 FY26 · High confidence Start from Q4
    Rentals will start from Q4 for this new business.

    — Nitin Khanna

  • Bangalore Monthly Revenue Exit Run Rate Commercial Real Estate · March '27 · Medium confidence ₹27 crores
    While leasing at Bangalore complex remains muted, we expect March '27 monthly revenue exit run rate of INR270 million.

    — Nitin Khanna

  • Overall Monthly Rentals Commercial Real Estate · FY27 · Medium confidence ₹28-30 crores
    We expect to ramp up our monthly rentals to INR280 million to INR300 million over the FY '27.

    — Nitin Khanna

Project Development

  • CIGNUS II Powai Launch Project Development · FY27 · High confidence Launch
    Work is on at full swing in CIGNUS II Powai, and we are on track for an FY '27 launch.

    — Nitin Khanna

  • Delhi International Airport Hotel Partial Launch Project Development · Q4 FY27 · Medium confidence Partial launch
    The revised timelines are partial launch by quarter Q4 FY '27 with a staggered launch post that.

    — Nitin Khanna

  • Delhi International Airport Hotel Rooms Operational Project Development · end of this year (Q1 FY28) · Medium confidence 150 rooms
    So right now, we are targeting about 150 rooms for the end of this year.

    — Shwetank Singh

  • Delhi International Airport Hotel All Rooms Operational Project Development · Q1 FY28 · Medium confidence 380 rooms
    And then in a staggered manner post that, ramping up to 380-odd rooms that is required within the next quarter.

    — Shwetank Singh

  • Hyatt Regency Airoli Construction Start Project Development · 2-3 months · High confidence Start
    Now that that's clear, we expect another 2 to 3 months to hit the ground for excavation.

    — Shwetank Singh

  • Hyatt Regency Airoli Hotel Operational Project Development · 36 months from construction start · High confidence Operational
    So, we expect 2 to 3 months to start and 36 months from then on to sort of get the hotel operational.

    — Shwetank Singh

What to watch in Q4 FY26

Bangalore New Rooms Stabilization

next two to three quarters
Current Occupancy down due to 129 new rooms
Target Stabilization of occupancy

Why it matters

Stabilization of new inventory is crucial for improving overall occupancy and RevPAR in a key micro-market.

And over the next two to three quarters, we expect these rooms to stabilize.

Risks & concerns

  • Construction Impact at Powai

    medium

    Ongoing construction at CIGNUS II Powai caused a temporary setback for crew business and impacted occupancy at nearby hotels. Expected to stabilize in next two quarters.

    Management acknowledged

  • Delhi Airport Project Delays

    medium

    Delays at the Taj project at Delhi International Airport due to pollution-led stoppages.

    Management acknowledged

  • Leisure Portfolio Margin Dilution

    medium

    Bringing in a leisure portfolio into a high-performing business portfolio may cause some margin dilution, but asset management teams are working to correct it.

    Management acknowledged

  • Goa CRZ Committee Dissolution

    medium

    Dissolution of the CRZ committee is delaying the start of construction for the Goa hotel, awaiting formation of a new committee.

    Management acknowledged

  • Labour Code Impact on P&L

    low

    Higher provisions due to new labour codes resulted in a ₹1 crore impact on P&L.

    Management acknowledged

  • Costs from Additional Inventory

    low

    The P&L absorbed costs related to additional inventory at Bengaluru and Khandala, which is considered transitory.

    Management acknowledged

Q&A highlights

7 direct
Delhi Airport Hotel Ramp-up Timeline and Room Count Direct
So, what it allows us to do is open the rooms up in a staggered manner. So right now, we are targeting about 150 rooms for the end of this year. And then in a staggered manner post that, ramping up to 380-odd rooms that is required within the next quarter.

Clarifies the phased opening strategy and specific room targets for the new Delhi Airport hotel, providing a timeline for full operational capacity.

Asked by Adhidev from ICICI Securities

MMR Region ARR Outlook and Growth Direct
The MMR region obviously is driven by many submarkets, and we are positioned more in the Sahar belt as well as Powai. On the whole, we have seen the whole of the region being early single-digit growth from a RevPAR perspective, while as Shwetank said in his earlier statements that MMR for us has come in, in the later single-digit growth. So, we've actually been outperforming the market on the whole.

Provides insight into the company's performance in the key Mumbai market, indicating outperformance despite overall early single-digit RevPAR growth.

Asked by Rahul Jain from PhillipCapital

Aravali Resort Rebranding Impact on Rates and Guest Experience Direct
All of these should add to our guest experiences as well as uplift the positioning of the hotel on the whole. We believe this will, over time, in the next 2 to 3 quarters, as we go into contracting of larger MICE as well as weddings into the season of next year, we see that this will actually give us a potential upside from where we have operated in the past.

Explains the strategic rationale behind the rebranding and upgrades, projecting a positive impact on ADR and overall positioning within 2-3 quarters.

Asked by Rahul Jain from PhillipCapital

Hospitality Margins and One-off Expenses Direct
So, as I have already spoken on this, there are one-off expenses because of the excise license name changes, which we have done in our two properties, Novotel and Bangalore. Plus, there was one property tax issue in Bangalore, which was also a onetime settlement. This total amounts to around INR2.5 crores to INR3 crores, which will be onetime spend. So, this is not going to happen next year going forward.

Clarifies the nature and quantum of one-off expenses impacting current quarter margins, indicating these will not recur and providing a clearer picture for future profitability.

Asked by Sameet Sinha from Macquarie Capital

Udaipur Property Condition and Future Capex Partial
So, Udaipur, as you're aware, we've basically started the due diligence, and we are working through the steps required to conclude it. But essentially, we have taken a resort which is not operational today and will require extensive refurbishment work. And we'll also look at adding some additional rooms to it.

Provides an update on the Udaipur asset acquisition, confirming it requires significant investment for refurbishment and expansion, but defers specific capex and room count details until due diligence is complete.

Asked by Sameet Sinha from Macquarie Capital

Impact of Trade Deals (US, EU) on International Travel Direct
If we look at it today, 40% of our business across the board comes from foreigners and that percentage remains intact with the added rooms that have come in. So that essentially means that we are above pre-COVID levels, though the percentage may show the same. And given what you just said, the positive sentiment coming through, particularly the last two trade deals as good as this morning, we strongly believe that this will only grow further.

Highlights the current contribution of international travelers (40%) and expresses confidence in further growth driven by positive macroeconomic sentiment and recent trade deals.

Asked by Sameet Sinha from Macquarie Capital

Bangalore Micro Market Occupancy Decline Direct
So, the drop in occupancy is mainly because we've added additional 130 rooms, and that's stabilizing very rapidly. And you can see that we have been still able to command a very high ADR growth despite the new rooms coming in. So, we continue to work on that strategy. And over the next two to three quarters, we expect these rooms to stabilize.

Explains the reason for occupancy decline in Bangalore, attributing it to new inventory stabilization, and provides a timeline for recovery.

Asked by Awais Bakshi from Sundaram Mutual Fund

Goa Market Outlook and Hotel Development Direct
So, we have always maintained this that we believe that Goa, Udaipur, Jaipur, etc., are very deep markets. And we are actually not faced by these temporary blips of up and down. This has happened to Goa before. I'm sure it will happen again. We are still about 3 years away from our first hotel opening, and we would definitely expect a reversal of trend on that.

Addresses concerns about the Goa market's performance, expressing long-term confidence despite current industry data, given their project is still 3 years from opening.

Asked by Abhay Khaitan from Axis Capital

2 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Chalet Hotels reported a robust Q3 FY26, with consolidated revenue growing 27% year-on-year to ₹589.2 crores. Consolidated EBITDA saw a 29% year-on-year increase, reaching ₹272.6 crores, and the EBITDA margin expanded by 76 basis points to 46.3%. Excluding residential income, revenue grew 23% to ₹572.6 crores, and EBITDA grew 24% to ₹268.6 crores, with an EBITDA margin of 46.9%.

Hospitality Segment Performance

The hospitality business delivered strong operating performance, with revenue rising 23% year-on-year to ₹491.3 crores. RevPAR growth was close to 12%, driven by a 16% increase in ADRs. Despite the addition of 129 new keys in Bangalore and 100 rooms at Athiva Khandala, which impacted occupancy, the segment maintained a 46% EBITDA margin. The company expects stabilization of new inventory in Bangalore within 2-3 quarters.

Commercial Real Estate (CRE) and Residential Updates

The CRE business saw revenue grow 29% year-on-year to ₹74.4 crores, with EBITDA increasing 37% to ₹62.1 crores, yielding an impressive 83.5% EBITDA margin. Occupancy across the CRE portfolio stands at 83%, with expectations to reach 90% at Powai in the near term. Residential projects contributed ₹16.6 crores from the sale of 3 units, with 2 units handed over during the quarter.

Strategic Projects and Brand Initiatives

Chalet Hotels rebranded its NCR resort from Courtyard by Marriott Aravali Resort to Aravali Marriott Resort & Spa, following upgrades and new facilities. The Athiva brand saw its first full quarter of operation at Khandala, with 5 full sold-out days, and the Vashi hotel is slated for rebranding to Athiva in Q4 FY26. The CIGNUS II Powai project is on track for an FY27 launch, and environmental clearances for Hyatt Regency Airoli have been received, with construction expected to start in 2-3 months.

Capital Allocation and Debt Management

The company's net debt stood at ₹2,000 crores, with the average cost of finance reducing by 14 basis points quarter-on-quarter to 7.48%. A commercial paper issuance of ₹100 crores at 6.3% coupon was completed. Chalet Hotels has planned a capex of ₹2,500 crores over FY27-FY29, primarily funded by internal accruals, and maintains a healthy liquidity position of ₹380 crores.

Industry Outlook and Demand Drivers

Management highlighted strong industry growth driven by double-digit ADR and RevPAR, supported by rising income levels, a young population valuing experiences, and improved infrastructure. The recently concluded long weekend around January 26th exemplified strong demand. International travel is recovering, and trade deals with the EU and US are expected to further boost foreign travelers, contributing to sustained demand.

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