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    Kamat Hotels

    KAMATHOTEL
    Consumer Services·1 Aug 2025
    Management Summary

    Kamat Hotels delivered strong Q1 FY26 financial results with double-digit growth in revenue and significant expansion in EBITDA and PAT. The company is aggressively pursuing its expansion strategy, aiming for 30 operational hotels by year-end and increasing operational rooms to 2,500. While facing some challenges with new property stabilization and development delays for the Puri project, management remains focused on qualitative growth, debt reduction, and achieving ambitious revenue and ARR targets for FY26 and FY27.

    Highlights

    5

    • Consolidated revenue grew by 12% YoY to INR 83 crores in Q1 FY26.

    • EBITDA increased by 37% YoY to INR 18 crores, with margin expanding to 21.91%.

    • Profit after tax surged by 291% YoY to INR 4 crores.

    • The company is on track to open 30 hotels by year-end, with 19 currently operational and aiming for 25 running hotels soon.

    • Debt has been reduced to INR 95-98 crores, with a promise to become debt-zero already achieved in some regard.

    Concerns

    3

    • The 12% YoY revenue growth was questioned by analysts as relatively slower compared to peers, though management attributed it to a focus on qualitative expansion.

    • New properties like Rishikesh are expected to have an initial EBITDA burn on a standalone basis before stabilizing.

    • The Puri property development has been delayed due to new airport height restrictions requiring a revision of building plans.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹83 Cr+12%YoY
    2. 02EBITDA₹18 Cr+37%YoY
    3. 03EBITDA Margin21.9%
    4. 04PAT₹4 Cr+2.9%YoY
    5. 05Debt₹95 Cr

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Debt

    Gross ₹95 crores

    Cost 10.0%

    M&A

    Merged Entity (unnamed)

    merger · pending regulatory

    Guidance & targets

    9
    CategoryTargetPriority
    Hotel Count
    Operational Hotels
    30
    		High
    Capacity
    Operational Rooms
    2,500
    		High
    Revenue
    Consolidated Revenue
    INR 400 crores
    		High
    Revenue
    Consolidated Revenue
    INR 500 crores
    		Medium
    Margin
    EBITDA Margin
    29-30%
    		High
    ARR
    Blended ARR
    INR 7,500
    		High
    ARR
    Rishikesh ARR
    INR 15,000
    		Medium
    Cost of Debt
    Cost of Debt
    9% or below
    		High
    ADR
    Puri ADR
    INR 10,000
    		Medium

    New Hotel Openings & Stabilization

    Next quarter (Q2 FY26)
    CurrentRishikesh, Dwarka, Bhavnagar, Orchid Panchgani, IRA Hyderabad expected to open in Q2/Q3 FY26.
    TargetActual commercial operations and initial occupancy/ARR for these properties.

    Why it matters

    Crucial for achieving the FY26 hotel count and operational room targets, and for assessing initial EBITDA burn vs. revenue generation.

    We have good news that we will be opening the Orchid Rishikesh this month... Dwarka, we have an opening which is in the month of September along with Bhavnagar... The Orchid Nashik, Panchgani Orchid Hotel, Panchgani we signed a day before which will be opening in the month of September... IRA by Orchid at Hi-Tech City, Hyderabad, that's a 60-room hotel that should open by -- actually, we can open it by August.

    How to verify

    guidance_and_targets[category='Hotel Count']

    Risks & concerns

    2
    RiskSeverity

    Initial EBITDA burn for new properties

    New properties like Rishikesh are expected to have an initial EBITDA burn on a standalone basis before they stabilize and contribute positively to margins. — Management acknowledged

    medium

    Puri property development delay

    The Puri property development is delayed due to new airport height restrictions requiring a revision of building plans, which will push back its operational timeline. — Management acknowledged

    medium

    Q&A highlights

    6

    “whatever properties we take, we are very particular in the type of properties that we are taking in terms of our main model of growth, which is basically revenue share or lease and, in some cases, management, okay. We want basically not just numbers, but we want qualitative numbers.”

    Analyst challenged the company's growth rate, and management clarified its strategic focus on qualitative, asset-light expansion over pure volume, which may result in a slower but more robust growth.

    asked by Aman Soni

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    Kamat Hotels reported a consolidated revenue of INR 83 crores for Q1 FY26, marking a 12% year-on-year growth. EBITDA for the quarter increased by 37% YoY to INR 18 crores, achieving an EBITDA margin of 21.91%. Profit after tax saw a substantial increase of 291% YoY, reaching INR 4 crores, demonstrating strong profitability improvements despite external challenges🌐.

    02

    Aggressive Expansion Strategy and New Property Pipeline

    The company is actively expanding its portfolio, aiming to have 30 operational hotels by the end of FY26, up from the current 19. Key upcoming openings include Orchid Rishikesh this month, Dwarka and Bhavnagar in September, Orchid Nashik in April, and Orchid Panchgani in September. The total operational rooms are projected to grow significantly from 1,825 to approximately 2,500 within this fiscal year, underscoring a robust growth trajectory.

    03

    Brand Performance and ARR Trends

    Management observed varied brand performance, with IRA and Lotus showing strong year-on-year improvement, while Orchid and Fort Jadhav GADH experienced some softness attributed to newer properties stabilizing. The company's blended ARR target for FY26 is INR 7,500, with specific targets of INR 15,000 for Rishikesh and INR 10,000 for Puri. This strategy emphasizes qualitative growth and premium segments, aiming for high ADR and occupancy rates in key markets.

    04

    Debt Management and Capital Structure

    Kamat Hotels has made significant progress in debt reduction, with current outstanding debt reported at INR 95-98 crores. The company has fulfilled its promise to investors of becoming 'debt zero' in certain aspects. The cost of debt is currently 10%, which management aims to reduce to 9% or below in the coming period, with interest costs for the quarter at INR 2.86 crores, reflecting a focus on optimizing capital structure.

    05

    Merger Update and Asset Valuation

    The proposed merger, having secured approvals from BSE and NSE, is currently awaiting NCLT approval, with a lawyer appointed to expedite the process. Management highlighted a 'drastic' appreciation in the valuation of the merged entity's assets, particularly a 16-acre land parcel near Vadhavan Port and a new airport, which was previously valued at INR 70 crores. This appreciation is expected to unlock significant value for shareholders.

    06

    Puri Property Development Challenges

    The development of the Puri property has encountered delays due to new airport height restrictions. The original plan for a 40-meter tower must now be revised to 27 meters, necessitating a redesign of the building. Despite this setback, the company intends to develop a 9,500-square-foot banquet hall and other facilities to cater to MICE and wedding tourism, indicating continued commitment to the project's strategic importance.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.