Mahindra Holidays & Resorts India Limited — Q1 FY26 earnings call

Call held 24 Jul 2025

Management summary

Mahindra Holidays & Resorts reported a strong Q1 FY26 with standalone PAT up 69% and consolidated PAT up 18% despite currency headwinds. Resort revenue saw double-digit growth, and occupancy remained high at over 85%. The company continues its expansion plans and focuses on improving member experience, though the HCRO business faces ongoing challenges from geopolitical and economic factors.

Highlights

  • Standalone PAT grew by 69% YoY to ₹76 crores.

  • Standalone PAT margin expanded by almost 680 bps.

  • Consolidated PAT increased by 18% YoY to ₹7.2 crores, absorbing adverse currency impact.

  • Resort revenue showed double-digit growth, reaching ₹114 crores.

  • Achieved an occupancy level of over 85% despite adding significant inventory.

  • Member additions totaled 1,524, with Average Unit Realization (AUR) up 69% YoY to ₹8.3 lakhs.

Concerns

  • Geopolitical tensions along the border impacted occupancy in May.

  • Consolidated PAT was negatively impacted by a FOREX loss of ₹28 crores due to Euro-INR movement.

  • HCRO business performance remains muted due to the Russia-Ukraine situation and recession in the Finnish economy.

Key financials

  1. Standalone Total Income ₹411 Cr +7%YoY
  2. Standalone EBITDA ₹161 Cr +42%YoY
  3. Standalone EBITDA Margin 39%
  4. Standalone PAT ₹76 Cr +69%YoY
  5. Consolidated Income ₹740 Cr +8%YoY
  6. Consolidated EBITDA ₹161 Cr +16%YoY
  7. Consolidated EBITDA Margin 22%
  8. Consolidated PAT ₹7.2 Cr +18%YoY

What they filed

Q1 FY27: revenue up 4.5%, net profit down 219.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue671 678 779 701 717 +7%753 +11%820 +5%733 +4%
EBITDA123 146 204 122 152 +24%144 −1%197 −3%113 −8%
Net profit11 35 73 7 17 +47%1 −96%41 −43%-9 −219%
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.

Capital allocation

high confidence
  • Liquidity Cash ₹1,576 Cr Cash position improved to INR 1,576 crores as on 30th June 2025.
    Our cash position also improved to INR1,576 crores as on 30th June 2025.

Guidance & targets

Capacity

  • Gross room addition Capacity · by March-end 2026 · High confidence 1,000 rooms
    Overall, I do believe our goal of gross addition of 1,000 rooms by March-end, which is March 26, I think we stand firm on that, and I think there is a very good pipeline of resorts which will be back-ended towards the second half of the year.

    — Manoj Bhat

  • Total rooms Capacity · next five years · High confidence 10,000 rooms
    I just wanted to ask, we target to open 10,000 rooms in the next five years, which would mean that we have to grow by about 750 to 800 rooms per annum.

    — Aditya Soni

  • Annual room growth Capacity · per annum · High confidence 750 to 800 rooms

    — Aditya Soni

Inventory Mix

  • Owned inventory ratio Inventory Mix · ongoing · Medium confidence 25% to 30%
    No, I had answered, Aditya, that 30% maybe will be owned and that is the ratio we will try and maintain 25% to 30%, yes.

    — Manoj Bhat

Member-to-Room Ratio

  • Comfortable member-to-room ratio Member-to-Room Ratio · ongoing · Medium confidence 45% to 48%
    Somebody had asked me I think a couple of quarters back, to fulfill member demand, what is a good ratio I would be comfortable with? And I said 45% to 48%.

    — Manoj Bhat

What to watch in Q2 FY26

HCRO business stability and Euro-INR impact

next quarter
Current Muted performance, ₹28 crores FOREX impact
Target Improved stability, reduced FOREX impact, or specific Euro-INR numbers

Why it matters

HCRO's performance and currency impact are significant drags on consolidated results; stability is key for overall profitability.

Going forward, if you can share the HCRO numbers in rupee crores compared to what we are quoting as in euro million, then that will be great, that will be really helpful for us.

Risks & concerns

  • Geopolitical tensions impacting occupancy

    medium

    Geopolitical tensions along the border impacted occupancy in May for the company and the industry.

    Management acknowledged

  • Adverse currency impact on consolidated PAT

    medium

    Consolidated PAT was impacted by a FOREX loss of ₹28 crores due to Euro-INR movement.

    Management acknowledged

  • Muted performance of HCRO business

    medium

    HCRO business is affected by the Russia-Ukraine situation and recession in the Finnish economy, making a turnaround timeline difficult to predict.

    Management acknowledged

Q&A highlights

5 direct
Inventory addition strategy (lease vs. own) and challenges Direct
I think the remaining are all mostly around partners who are willing to provide capital in the form of either building for us, which is what we call the build-to-suit model, or they already have an existing thing which can be modified to the specifications. And frankly, I think even with the kind of demand scenario we are seeing, I think we are not facing much of a challenge in terms of adding to our funnel of inventory building.

Clarifies the company's approach to inventory expansion, focusing on capital-light models and partner collaborations, and indicates strong demand.

Asked by Pankaj Kumar

Member addition run rate and member-to-room ratio Partial
I think the member addition will probably not accelerate till we reach a point in time where we are completing this journey, and that also is something which I think will take a few more quarters.

Indicates that member additions might remain slower in the near term as the company focuses on optimizing its sales processes and member profile.

Asked by Pankaj Kumar

Drivers of resort income growth (rentals, F&B price hike) Direct
I think both of these will continue to drive. So, I think in the resorts, the journey here is driving the experiences piece much more sharper. And that journey has just started.

Highlights the ongoing focus on enhancing member experiences as a key driver for resort income, alongside rentals and F&B.

Asked by Pankaj Kumar

HCRO business turnaround timeline and financial performance Partial
So, from our perspective, see, it is difficult to put a timeline because it depends on largely extraneous factors. So, if you look at, as I said, the economy is expected to recover through the course of the year. On the geopolitical situation, the Russia-Ukraine situation, I think that is something to wait-and-watch.

Management acknowledges the challenges for HCRO but cannot provide a clear turnaround timeline due to external geopolitical and economic factors.

Asked by Harshal Mehta

Competitive advantage against digital platforms like Airbnb and SaffronStays Direct
I think the level of customer experience which we offer, which is a full-service resort, I do not know whether it is comparable because each model has its benefits and it is a certain kind of traveler profile they attract.

Management differentiates its full-service resort model and target customer profile from asset-light digital platforms, suggesting different market segments.

Asked by Param Vora

Decision-making between leased and owned properties for expansion Direct
I think today's visibility is probably between 65% to 70% of that journey. So, from that perspective, I think we do continue to see strong addition into the funnel. The last part I would like to highlight is that which I alluded to in the beginning, these were not just lease ending, which is causing this, but it is also a function of... we are doing a portfolio review in terms of customer feedback and quality of some of our largely associate properties.

Explains the strategic shift towards a more capital-light model for expansion, driven by ROCE metrics and partner willingness to invest, while maintaining some owned properties in key locations.

Asked by Shreyans Mithani

Mix of membership tenure (5-year vs. longer-term) Direct
I think, Shreyans, the way I think of it is, we will follow the customer. So, we offer a range of options. So, we have a five, we have a 10, we have 15, we have a 25. And I think we will let the customers make the choice about what they want.

Management emphasizes a customer-centric approach, offering various tenure options, with the 5-year product being popular due to lower initial investment and as a trial for longer upgrades.

Asked by Shreyans Mithani

2 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Mahindra Holidays & Resorts reported a strong Q1 FY26. Standalone total income grew 7% YoY to ₹411 crores, with EBITDA up 42% to ₹161 crores, resulting in a 39% EBITDA margin. Standalone PAT surged 69% YoY to ₹76 crores, and PAT margin expanded by almost 680 bps. On a consolidated basis, income increased 8% YoY to ₹740 crores, and PAT grew 18% YoY to ₹7.2 crores, despite a ₹28 crores FOREX impact from Euro-INR movement.

Inventory Expansion and Occupancy

The company maintained a high occupancy level of over 85% in Q1 FY26, even with increased inventory. Management noted a slight seasonal softening in May due to geopolitical tensions. The current inventory base stands at 5,800 keys, with a goal to add 1,000 rooms by March 2026 and reach 10,000 rooms in the next five years. This expansion will involve 750-800 rooms per annum, with a focus on capital-light models and partner collaborations, maintaining an owned inventory ratio of 25-30%.

Member Acquisition and Experience

Mahindra Holidays added 1,524 new members in Q1 FY26, with the Average Unit Realization (AUR) increasing 69% YoY to ₹8.3 lakhs. Digital and referral channels now account for 65% of total member additions. The company is focusing on improving the membership buying experience and targeting specific customer profiles. Management indicated that member additions might not accelerate significantly until the current sales process optimization journey is complete, which could take a few more quarters.

HCRO Business Update

The Holiday Club Resorts (HCRO) business continues to face challenges, with performance described as muted. This is primarily attributed to the ongoing geopolitical situation (Russia-Ukraine) and the recession in the Finnish economy. While the business is inherently strong and was generating significant EBIT (e.g., EUR 10 million in FY19), its recovery timeline is uncertain due to these external factors. Management is focused on operating the business efficiently and will consider strategic options later.

Sustainability and Tech Initiatives

The company is committed to sustainability, having completed biodiversity assessments at four new resorts and increasing solar installation to 41% of total demand, with a cumulative installation of 15 MW. In terms of technology, MHRIL is undergoing a tech transformation, piloting contactless check-in processes in two resorts, and focusing on enhancing service quality and anticipating member needs.

Resort Performance and Revenue Drivers

Resort revenue grew by double digits in Q1 FY26, reaching ₹114 crores. The company attributes this growth to consistent resort performance and a focus on driving experiences. Rentals and F&B price hikes are expected to continue driving resort income. Management is also conducting a portfolio review based on customer feedback and quality, which led to letting go of some partnerships this quarter.

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