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    Kamat Hotels

    KAMATHOTEL
    Consumer Services·7 Feb 2025
    Management Summary

    Kamat Hotels reported a strong Q3 FY25 with consolidated revenue up 29% YoY to ₹111 crores and EBITDA up 70% YoY to ₹44 crores, achieving a 39.77% margin. Despite a PAT decline due to a prior year's exceptional gain, the company is bullish on its expansion pipeline, with new properties set to open across India. Management highlighted a robust 34% repeat customer base and strategic focus on operational efficiencies and digital marketing.

    Highlights

    5

    • Consolidated revenue for Q3 FY25 was ₹111 crores, up 29% YoY.

    • EBITDA for Q3 FY25 was ₹44 crores, up 70% YoY.

    • EBITDA margin for Q3 FY25 was 39.77%.

    • Orchid Hotel in Goa commenced operations on January 17, 2025, with average selling rates now at ₹7,000-₹7,500 (up from ₹3,000-₹3,500).

    • The company boasts a 34% repeat customer rate, indicating strong customer loyalty.

    Concerns

    3

    • Profit After Tax (PAT) for Q3 FY25 was ₹26 crores, a decrease from ₹42 crores in Q3 FY24, primarily due to an exceptional item related to IRA Mumbai sales in the prior year.

    • PAT for 9M FY25 was ₹36 crores, lower than the previous year's Q3 FY24 due to the same exceptional item.

    • Mahodadhi Palace experienced a decrease in occupancy and Average Room Rate (ARR) due to ongoing renovation work, with only 25 rooms operational.

    What Changed2

    vs Q4 FY25

    Guidance items7 → 13 (+6)Risks discussed4 → 1 (-3)
    Key financials

    Metrics

    8

    Periods

    2

    Q3 FY25

    4
    • Consolidated Revenue
      ₹111 Cr
      YoY+29.0%
    • Consolidated EBITDA
      ₹44 Cr
      YoY+70%
    • EBITDA Margin
      39.8%
    • PAT
      ₹26 Cr
      YoY-38%

    9M FY25

    4
    • Consolidated Revenue
      ₹270 Cr
      YoY+22.8%
    • Consolidated EBITDA
      ₹80 Cr
      YoY+18.3%
    • PAT
      ₹36 Cr
    • PAT Margin
      13.2%

    Guidance & targets

    13
    CategoryTargetPriority
    Profitability
    FY25 EBITDA
    ₹100 crores
    		High
    Margin
    Standard EBITDA Margin
    35-42%
    		Medium
    ARR Growth
    Ayodhya ARR Growth
    15-20%
    		Medium
    Capacity
    Pune Orchid Rooms
    500 rooms
    		High
    New Property Openings
    Chandigarh Hotel Opening
    March
    		High
    New Property Openings
    Hyderabad Hotel Opening
    Q1
    		High
    New Property Openings
    Bhavnagar Hotel Opening
    October
    		High
    New Property Openings
    Dehradun Hotel Opening
    December
    		High
    New Property Openings
    Gwalior Hotel Opening
    December
    		High
    New Property Openings
    Puri Hotel Opening
    December 26
    		High
    New Properties
    First Year Occupancy
    60-65%
    		Medium
    New Properties
    First Year EBITDA
    30%
    		Medium
    Revenue
    Digital Streams Revenue
    ₹150 crores
    		High

    FY25 EBITDA Target

    FY25
    Current₹80 crores (9M FY25)
    Target₹100 crores

    Why it matters

    This is a key profitability target for the full fiscal year, indicating the company's overall financial health and operational efficiency.

    definitely we seem to be on track in terms of the EBITDA for 100 crore.

    How to verify

    key_financials.metrics[label='Consolidated EBITDA (FY25)']

    Risks & concerns

    1
    RiskSeverity

    Mahodadhi Palace Renovation Impact

    Ongoing renovation work at Mahodadhi Palace is causing a temporary decrease in occupancy and ARR, as only 25 rooms are operational, impacting short-term revenue for this specific property. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “The Company's historic performance even before the last 2 years, which is basically where we have been out of our financial challenges, the Company's historic performance has always fluctuated between 33, 35 and 40 odd percent... So, it is more or less, I would say it is fair to assume 35% to be our standard benchmark, which in the last few years or the last 15 months has not necessarily been the case because like I explained, a lot of things have been done, streamlined, smoothened, because of which the Company is now neat and clean in that regard”

    Analyst questioned if the 40% EBITDA margin is sustainable, and management clarified historical range and future target.

    asked by Raj Saraf

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY25 Financial Performance Overview

    Kamat Hotels reported a robust Q3 FY25, with consolidated revenue reaching ₹111 crores, marking a 29% year-on-year increase. EBITDA for the quarter stood at ₹44 crores, reflecting a significant 70% year-on-year growth, and the EBITDA margin was strong at 39.77%. For the nine months ended FY25, consolidated revenue was ₹270 crores (+22.8% YoY) and EBITDA was ₹80 crores (+18.3% YoY). However, Profit After Tax (PAT) for Q3 FY25 decreased to ₹26 crores from ₹42 crores in Q3 FY24, primarily due to an exceptional item📎 related to IRA Mumbai sales in the previous year.

    02

    Strategic Expansion and Pipeline

    The company is actively expanding its footprint with several new properties in the pipeline. The Orchid Hotel in Goa commenced operations on January 17, 2025, with its average selling rate significantly increasing to ₹7,000-₹7,500 from ₹3,000-₹3,500 previously. Upcoming openings include Chandigarh by March, Hyderabad in Q1 FY26, Bhavnagar by October, and Dehradun and Gwalior by December. The Puri Hotel is slated to open by December 2026, contributing to a robust pipeline that includes properties in Sambalpur and other locations in Orissa.

    03

    Operational Efficiency and Customer Focus

    Kamat Hotels emphasizes customer-centricity, evidenced by a high repeat customer rate of 34% across its sales. The company is dedicated to enhancing operational efficiencies, including reducing electricity and labor costs through technology and process improvements. Management aims for a standard EBITDA margin of 35-42% in the long term, reflecting a focus on sustainable profitability through asset sweating and expansion.

    04

    Pune Market Dynamics and Expansion

    Management expressed strong bullishness on the Pune market, citing its transformation into a commercial hub supported by GCCs and other businesses. The Pune Orchid property is undergoing expansion to increase its room count from 410 to 500 over the next 12-15 months. During this period, the hotel will maintain 350-380 operational rooms to avoid revenue loss, strategically balancing renovation with continued high demand for bulk rooms and events.

    05

    Digital Strategy and Revenue Contribution

    The company is heavily investing in digital marketing and technology to drive traffic and revenue. Approximately ₹150 crores of revenue is currently generated from digital streams, encompassing its website, Orchid reward program, and various Online Travel Agencies (OTAs) like MakeMyTrip, Booking.com, and Agoda. This robust digital strategy aims to enhance direct bookings and customer acquisition, contributing to overall ARR improvement.

    06

    Mahodadhi Palace Project Update

    The Mahodadhi Palace property has seen a temporary decrease in occupancy and Average Room Rate (ARR) due to ongoing renovation work, with only 25 rooms currently operational. Management clarified that this is a deliberate strategy to sacrifice short-term revenue for a future upgrade to a luxury heritage hotel. This phased approach ensures that guests are not inconvenienced while the property is being enhanced.

    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.