Detailed Narrative
Q3 FY25 Financial Performance Overview
Apeejay Surrendra Park Hotels Limited reported a consolidated total income of ₹179 crore in Q3 FY25, marking a healthy 9.2% YoY growth. Operational EBITDA grew by 11% to ₹63 crore, maintaining strong margins at 35.7%. Profit Before Tax (PBT) saw a significant increase of 58.2% YoY to ₹85 crore, while normalized PAT stood at ₹32 crore, up 17.3% YoY.
Hotel Portfolio & Operational Highlights
The company's owned hotels achieved an impressive 91% occupancy rate, with Kolkata reaching 100%, Navi Mumbai 95%, and Chennai 92%. Q3 ARR grew by 9% to ₹8,387, and RevPAR increased by 11.7% to ₹7,658. Management expects higher double-digit ARR growth, potentially exceeding 15% in FY26, driven by existing hotels and new palace properties like Lotus Palace Chettinad (₹14,000 ARR) and Ran Bass Patiala (₹35,000+ ARR).
Flurys Brand Expansion & Strategy
Flurys, the iconic bakery brand, reached the 100-store milestone with 23 new outlets opened during the year, including 8 in Mumbai. The company plans to expand to 200 stores by 2027, its centenary year, with an annual revenue target of ₹1 crore per mature cafe/restaurant store and EBITDA margins of 18-20%. A large central commissary of 20,000 sq ft is being set up in the Delhi NCR region to support rapid expansion across North India, targeting 150 stores in the northern area over the next two years.
Kolkata EM Bypass Development Project
The company is undertaking a 6 lakh sq ft joint development project in Kolkata, with 3 lakh sq ft for serviced apartments and 3 lakh sq ft for a hotel. The serviced apartments are expected to generate ₹300 crore in revenue share for the company, with ₹100 crore anticipated annually for the next three years. This cash flow will effectively fund the 250-room hotel, making it a 'zero cost' project with an expected ARR of ₹12,000 when operational in April 2028.
Capital Expenditure & Funding Outlook
CAPEX for Q4 FY25 is projected at approximately ₹30 crore, with FY26 CAPEX estimated between ₹150-170 crore. The company expects to fund these investments entirely from internal accruals and the ₹100 crore annual cash flow from the Kolkata EM Bypass project. This strategy aims to maintain a net cash positive position throughout the development cycle, leveraging legacy land parcels for high IRRs of 30-40% on new projects.
Palace Hotels Performance & Future Outlook
The newly opened Lotus Palace Chettinad and Ran Bass The Palace at Patiala are stabilizing, with current ARRs of ₹14,000 and ₹35,000 respectively. For the coming year (FY26), ARRs are targeted at ₹15,000 for Chettinad and ₹45,000-50,000 for Patiala, with occupancy expected to stabilize in the 40-50% range by FY26-27. These properties are key to the company's ARR growth strategy and have received extensive media coverage.
Future Growth & Management Contracts
Apeejay Surrendra Park Hotels aims to double its key count to 5,048 over the next five years, including 830 owned keys in Pune (200 rooms by April 2027), Vizag (100 rooms by October 2027), Kolkata (250 rooms by April 2028), and Navi Mumbai & Jaipur (400 keys by FY28-29). Additionally, the company plans to add approximately 300 keys annually through management contracts, further expanding its presence across India.