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.