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    Apeejay Surrend.

    PARKHOTELSGood
    Consumer Services·11 Aug 2025
    Management Summary

    Apeejay Surrendra Park Hotels reported a strong Q1 FY26, driven by robust topline and EBITDA growth, high occupancy, and strategic expansion across its hotel and Flurys segments. The company is actively pursuing asset-light growth, key acquisitions in luxury segments, and significant capex in technology and property upgrades, all while maintaining a comfortable liquidity position and positive net debt. Management expressed high confidence in achieving its ambitious growth targets.

    Highlights

    8

    • Topline grew 14% YoY and EBITDA grew 16% YoY in Q1 FY26.

    • Achieved India's highest occupancy of 92% and 13% ARR improvement.

    • Flurys revenue for Q1 FY26 was INR 19 crore, up 42% YoY, targeting INR 85-90 crore for FY26.

    • Planned addition of close to 600 rooms in FY26 across 14 hotels, reaching 2,983 keys by 2025.

    • Strategic acquisitions include 90% stake in Zillion Hotels (Mumbai) for INR 206 crore and Malabar House/Purity (Cochin) for INR 62 crore.

    • EM Bypass Kolkata project expected to generate over INR 600 crore in revenues, with ASPHL's share contributing INR 100 crore per year for 3 years.

    • Total capital outlay of INR 1,700 crore over 5 years, with INR 300 crore planned for FY26, funded primarily by internal accruals and existing credit lines.

    • New owned properties in premium luxury segment expected to drive significantly higher ARRs and margins.

    What Changed2

    vs Q2 FY26

    Guidance items13 → 45 (+32)Risks discussed3 → 2 (-1)
    Key financials

    Metrics

    9

    Periods

    2

    Headline

    7
    • Topline Growth
      14.0%
      YoY+14.0%
    • EBITDA Growth
      16%
      YoY+16%
    • Occupancy
      92%
    • ARR Improvement
      13%
      YoY+13%
    • RevPAR Increase
      12%
      YoY+12%

    Q1 FY26

    2
    • Flurys Revenue
      ₹19 Cr
      YoY+18.8%QoQ-6%
    • Management Contracts Revenue
      ₹4 Cr

    Guidance & targets

    45
    CategoryTargetPriority
    Financial Performance
    Revenue & EBITDA Growth
    high teen growth
    		High
    Hotel Expansion
    Rooms Addition
    close to 600 rooms
    		High
    Hotel Expansion
    Total Keys
    2,983 keys
    		High
    Flurys Expansion
    New Store Openings
    40 outlets
    		High
    Flurys Expansion
    Total Stores
    200 stores
    		High
    Flurys Expansion
    Total Stores
    350 to 400 stores
    		High
    Flurys Profitability
    Annual Revenue per Mature Outlet
    INR 1 crore
    		High
    Flurys Profitability
    EBITDA Margin
    12% to 15%
    		High
    Flurys Revenue
    Total Revenue
    INR 85 crore to INR 90 crore
    		High
    Flurys Revenue per Store
    Revenue per Store
    INR 70 lakhs to INR 80 lakhs
    		High
    Flurys Revenue per Store
    Revenue per Store
    INR 1 crore or INR 1 crore plus
    		High
    Management Contracts
    Revenue from Management Contracts
    over INR 20 crore
    		High
    Management Contracts
    Revenue from Management Contracts
    INR 25 crore
    		High
    Management Contracts
    Management Fees Margin
    5.5% to 6%
    		High
    EM Bypass Project
    Total Project Revenue
    over INR 600 crore
    		High
    EM Bypass Project
    ASPHL Share of Revenue
    INR 100 crore per year
    		High
    EM Bypass Project
    ASPHL Share of Revenue
    around INR 30-odd crore
    		High
    EM Bypass Project
    Completion Timeline
    April of 2028
    		High
    Zillion Hotels Acquisition (Mumbai)
    Acquisition Cost
    INR 206 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Refurbishment & Development Spend
    about INR 60-odd crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Hotel Delivery
    H2 of next year
    		High
    Zillion Hotels Acquisition (Mumbai)
    Stabilized Annual Revenue
    around INR 60 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Stabilized EBITDA
    INR 24 crore to INR 28 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Next Year Revenue Contribution
    INR 20 crore to INR 25 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Next Year Bottom Line Contribution
    INR 6 crore to INR 7 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    Stable Performance
    27-28
    		High
    Zillion Hotels Acquisition (Mumbai)
    Revenue Potential
    not less than INR 80 crore
    		High
    Zillion Hotels Acquisition (Mumbai)
    EBITDA Margin
    roughly about 40% to 50%
    		High
    Cochin Acquisitions (Malabar House & Purity)
    Acquisition Cost
    INR 62 crore
    		High
    Cochin Acquisitions (Malabar House & Purity)
    Keys Addition
    around 31 keys
    		High
    Cochin Acquisitions (Malabar House & Purity)
    Stabilized Peak Revenue
    around INR 20 crore
    		High
    Cochin Acquisitions (Malabar House & Purity)
    Takeover Year Revenue
    INR 8 crore
    		Medium
    Cochin Acquisitions (Malabar House & Purity)
    EBITDA Margin Contribution
    40% to 50%
    		High
    Capex
    Annual Property Upgrade Budget
    about INR 50 crore
    		High
    Capex
    Technology & AI Spend
    around INR 15 crore
    		High
    Capex
    Total Capital Outlay
    about INR 1,700 crore
    		High
    Capex
    Total Spend
    roughly about INR 300-odd crore
    		High
    Capex
    Net Expansion Plan
    around INR 1,400 crore
    		High
    Funding
    Mutual Fund Balance
    about INR 70 crore
    		High
    Funding
    Available Loan Balance
    about INR 25 crore pending
    		High
    Funding
    Net Debt
    positive
    		High
    Funding
    Net Additional Debt (Standalone)
    not exceed INR 100 crore
    		High
    Leased Properties
    EBITDA Margin (post-rental)
    20% to 25%
    		High
    Leased Properties
    EBITDA Contribution (pre-indexed)
    about 30%
    		High
    Leased Properties
    Operating Margins (post-index)
    30% to 35%
    		High

    Risks & concerns

    2
    RiskSeverity

    Competitive intensity in the Flurys segment

    Analyst questioned how Flurys would sustain margins against new entrants and e-commerce players. — Analyst acknowledged

    medium

    Business disruptions impacting Q1 performance

    Analyst mentioned 10 days of business disruptions in Q1, which management implied was managed effectively. — Analyst acknowledged

    low

    Q&A highlights

    3

    “No, not that we are lowering the guidance. The reason behind this, of course, for this year is to actually move away from kiosk to cafes. And obviously, the investment level has been kept at the same level, because for us the cafes costs more than the kiosk. So, in terms of the spend, in terms of the development, that remains the same, which adds up to 40 as per our planning for this year.”

    Clarified that the revised FY26 store count guidance (40 vs 50) is a strategic shift towards more profitable cafe formats, not a slowdown, and addressed seasonal impact on sequential sales.

    asked by Archana Gude

    3 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Performance Highlights

    Apeejay Surrendra Park Hotels delivered a strong Q1 FY26, reporting a 14% topline growth and a 16% EBITDA growth. The company achieved an industry-leading occupancy of 92% and maintained its RevPAR leadership in the upper upscale segment. Average Room Rate (ARR) improved by 13%, and RevPAR increased by 12%, reflecting robust demand and effective pricing strategies. This performance underscores the company's operational efficiency and strong market positioning.

    02

    Strategic Hotel Expansion and Asset-Light Growth

    The company is on track to add close to 600 rooms in FY26 across 14 new hotels, increasing its total keys to 2,983 by 2025, in line with its vision of 50 hotels. This expansion includes 411 rooms under management contracts, 147 leased rooms, and 31 owned rooms. New properties are being added in high-potential leisure destinations like Goa, Manali, Shimla, and Dharamsala, as well as key business markets, broadening the company's geographic reach and enhancing its positioning.

    03

    Flurys Brand Expansion and Profitability Targets

    Flurys, the company's iconic bakery and confectionery brand, reported Q1 FY26 revenue of INR 19 crore, representing a 42% YoY growth. The expansion strategy for FY26 involves opening 40 new stores, with a strategic shift from kiosks to more profitable cafe formats. The company aims to reach 200 stores by 2027 and 350-400 stores by FY30. Flurys is projected to achieve INR 85-90 crore in revenue for FY26, with mature outlets targeting INR 1 crore in annual revenue and an EBITDA margin of 12-15% post-stabilization.

    04

    Key Acquisitions in Luxury and Boutique Segments

    Apeejay Surrendra is making two significant acquisitions: a 90% stake in Zillion Hotels & Resorts in Mumbai for INR 206 crore, which will be converted into an 80-room super luxury boutique hotel by H2 FY27. This property is expected to generate INR 20-25 crore in revenue next year and INR 60 crore annually with a 40-50% EBITDA margin once stabilized by FY28. Additionally, the acquisition of Malabar House and Purity in Cochin for INR 62 crore will add 31 keys, contributing INR 8 crore in revenue this year and a stabilized peak revenue of INR 20 crore with 40-50% EBITDA margins.

    05

    EM Bypass Kolkata Project Progress

    The EM Bypass Kolkata project, a joint development, is progressing well, with residential apartment sales expected to commence around the Diwali season. The total project is anticipated to generate over INR 600 crore in revenues, with ASPHL's share contributing approximately INR 30 crore in FY26 and INR 100 crore per year for the subsequent three years. The project, encompassing both residential and hotel components, is targeted for completion by April 2028, poised to deliver strong Return on Capital Employed (ROCE).

    06

    Capital Allocation and Funding Strategy

    The company plans a total capital outlay of INR 1,700 crore over the next five years, with approximately INR 300 crore allocated for FY26. This includes INR 15 crore for technology and AI investments and an annual budget of INR 50 crore for existing property upgrades. Funding will primarily be sourced from internal accruals, supported by a current mutual fund balance of INR 70 crore and available credit lines of INR 25 crore. Management is confident that net debt will remain positive and will not exceed INR 100 crore on a standalone basis, ensuring a comfortable liquidity situation.

    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.