Apeejay Surrendra Park Hotels Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Apeejay Surrendra Park Hotels reported a strong Q3 FY26, achieving a record INR 200 crore in consolidated revenue and a 35.3% EBITDA margin, driven by high occupancy and improved ARR/RevPAR. The company is actively expanding its hotel portfolio through strategic acquisitions and new developments, alongside robust growth in its Flurys F&B segment. While some expansion timelines have shifted, management remains confident in its growth trajectory and strong financial position, with plans for significant cash flow generation from asset monetization.

Highlights

  • Consolidated revenue for Q3 FY26 was INR 200 crore, marking the first time this milestone was achieved.

  • EBITDA for Q3 FY26 was INR 71 crore, translating to a strong EBITDA margin of 35.3%.

  • The company achieved industry-leading occupancy levels of 90%, with an 11% YoY improvement in ARR and 9% in RevPAR.

  • Flurys business demonstrated robust growth, with 19% growth in Q3 FY26 and 33% for the nine months ended December 30, 2025.

  • Strategic acquisitions of Juhu (Mumbai), Malabar House, and Purity (Kerala) are progressing, adding high-quality, experience-led properties to the portfolio.

Concerns

  • Flurys expansion was slightly subdued in Q3 FY26 due to capital allocation towards hotel acquisitions, though management expects acceleration.

  • Delays in the expansion pipeline for EM Bypass (from Jan 2029 to Jan 2030), Pune (6 months), Juhu (3 months), and Navi Mumbai (from 2029 to 2030) were noted by analysts.

Key financials

3 periods

Headline

  • Net Worth
    ₹1,329 Cr
  • Mutual Fund Investments
    ₹58 Cr

Q3 FY26

  • Consolidated Revenue
    ₹200 Cr
  • EBITDA
    ₹71 Cr
  • EBITDA Margin
    35.3%
  • Occupancy
    90%
  • ARR Improvement
    11%
  • RevPAR Improvement
    9%

9M FY26

  • Consolidated Net Revenue
    ₹524 Cr
    YoY +15.3%
  • EBITDA
    ₹165 Cr
    YoY +12.8%
  • PAT
    ₹54 Cr

What they filed

Q1 FY27: revenue up 8.4%, net profit down 15.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue142 177 177 154 167 +18%200 +13%184 +4%167 +8%
EBITDA43 64 62 45 49 +14%71 +11%53 −15%47 +4%
Net profit27 32 27 13 16 −41%24 −25%12 −56%11 −15%
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
  • Capex ₹1,570 Cr
    • Hotel projects (Pune, Mumbai, Vizag, EM Bypass, Jaipur, Kochi, Zillion) ₹950 Cr
    • Zillion acquisition ₹330 Cr
    • Operational capex (renovation ~100 rooms/year) ₹40 Cr
    • Flurys expansion ₹180 Cr
    Our total capex of this becomes INR 1,570 crore.
  • Debt Gross ₹236 Cr · Net ₹154 Cr
    Currently as you know the gross debt is INR 236 crore. But the net debt is only INR 154 crore because there is large mutual fund investment of close to INR 60 crore.
  • M&A Juhu, Mumbai property Acquisition · Signed

    Adding high-quality experience-led properties in high-demand business and leisure destinations.

    Acquisition of 76% stake, will go to 90% in '26-'27. Property expected to open end of March 2027.

    We completed the acquisition of 76% stake at Juhu, Mumbai. This stake will go to 90% in '26-'27 with the property expected to open towards the end of March 2027.
  • M&A Malabar House at Fort Kochi and Purity at Vembanad Lake Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    Strengthening presence in luxury and leisure segment under The Park Collection, adding high-quality experience-led properties.

    Acquisition completed in Q3 FY'25 for INR 64 crore. Malabar House has ARR of ~INR 15,000, Purity has ARR of ~INR 14,000.

    The acquisition of both Purity and Malabar House are being done in a staggered manner at a cost of INR 64 crore. These acquisitions completed in Q3 FY '25 are well aligned with our strategy of adding high-quality experience-led properties in high-demand business and leisure destinations.
  • Liquidity Undrawn ₹250 Cr Healthy cash flows and mutual fund investments support financial flexibility. Undrawn credit lines of INR 250-300 crore are available.
    Our balance sheet remains comfortable, supported by healthy cash flows, a net worth of about INR 1,329 crore and mutual fund investments of nearly INR 58 crore. The financial flexibility backed by disciplined capital allocation enables us to pursue growth opportunities, both at the inorganic and organic levels. ... I do have a 1,300 cash and the balance still remains funded through the lines of credit, which already is there, about 250 to 300.

Guidance & targets

Room Additions

  • New keys in Q4 FY26 Room Additions · Q4 FY26 · High confidence 234 keys
    During quarter 4 this year, we plan to add 6 hotels totaling to 234 keys with properties opening at Vizag, Darjeeling, Katra, Kochi, Goa, and Dharamsala.

    — Vijay Dewan

  • New keys in FY27 Room Additions · FY27 · High confidence 438 keys
    During '26-'27, we plan to add 438 keys.

    — Vijay Dewan

Room Count

  • Total keys by '26-'27 Room Count · '26-'27 · High confidence 3,219 keys
    In total, we will add 17 hotels totaling to 672 keys over the next 14 months, taking our overall room count in '26-'27 to 3,219 keys with 56 hotels.

    — Vijay Dewan

Flurys Store Additions

  • New stores in Q4 FY26 Flurys Store Additions · Q4 FY26 · High confidence 14 new stores
    In Q4 FY '26 we plan to add 14 new stores while 27 is expected to mark a phase of accelerated store additions as the brand continues to expand its national footprint.

    — Vijay Dewan

Flurys Store Count

  • Total stores by Q4 FY26 Flurys Store Count · Q4 FY26 · High confidence 120 stores
    So, during quarter four now we plan to open 16 stores to take the number to about 120 stores with high revenue growth and then go on a faster and an accelerated pace as India's story improves.

    — Vijay Dewan

  • Total stores by '27-'28 Flurys Store Count · '27-'28 · Medium confidence 150-160 stores
    Number of stores we plan to take the number of stores from current which will we will conclude at 120 stores we plan to take it to about anywhere between 150 to 160 stores.

    — Vijay Dewan

  • Total stores by 2028 Flurys Store Count · 2028 · High confidence 200 stores
    Till 2028 we will be at the 200 mark.

    — Vaibhav Muley

  • Total stores by '29-'30 Flurys Store Count · '29-'30 · Medium confidence 450-500 stores
    And we remain committed to our overall plan of having 450 to 500 stores to be precise by '29-'30.

    — Vijay Dewan

Flurys Revenue

  • Revenue target Flurys Revenue · 3-4 years · High confidence INR 500 crore
    So we are going to same revenue target INR 500 crore upto 3 to 4 years.

    — Atul Khosla

EM Bypass Project

  • Cash flow from serviced residences sales EM Bypass Project · next three years · High confidence INR 300-350 crore
    The sale of these serviced residences over the next three years will add INR 300 crore to INR 350 crore in cash flow and will further strengthen the balance sheet of Apeejay Surrendra Park Hotels.

    — Vijay Dewan

  • Cash flow distribution (Year 1) EM Bypass Project · this calendar year · High confidence 30%
    In the first year itself which means now this calendar year we would be expecting 30% cash flow.

    — Vijay Dewan

  • Cash flow distribution (Year 2) EM Bypass Project · Year 2 · High confidence 20%
    In the second year we would expect out of these INR 350 crore as estimated by the two powerful brands will be 20% in the second

    — Vijay Dewan

  • Cash flow distribution (Year 3) EM Bypass Project · Year 3 · High confidence 30%
    followed by 30% in the third year

    — Vijay Dewan

  • Cash flow distribution (Year 4) EM Bypass Project · Year 4 · High confidence 10%
    and the remaining in the in the final fourth year of the handover. So, this cash flow is also being worked out to the last detail now as the project is about to get launched. 30 20 30 and 10.

    — Vijay Dewan

Delhi Hotel F&B Revenue

  • Improvement in F&B revenue Delhi Hotel F&B Revenue · ongoing · Medium confidence at least 10%
    We expect at least 10% improvement on account of renovations at the Delhi hotel.

    — Vijay Dewan

Net Debt to Equity

  • Net Debt to Equity Ratio Net Debt to Equity · entire cycle of growth · High confidence 0.1 to 0.2
    Currently it is at 0.11 and we would like to be in this kind of range only from 0.1 to 0.2 in our entire cycle of this growth.

    — Atul Khosla

Debt to EBITDA

  • Debt to EBITDA Ratio Debt to EBITDA · ongoing · High confidence below two
    Further to add on that, our internal target is always to be debt to EBITDA below two. So that we have a sufficient cushion so we will not be exceeding that.

    — Atul Khosla

What to watch in Q4 FY26

Flurys store additions

Q4 FY26
Current 104 operational outlets
Target 120 stores

Why it matters

Tracking the pace of Flurys' expansion is key to its growth strategy and market penetration.

In Q4 FY '26 we plan to add 14 new stores while 27 is expected to mark a phase of accelerated store additions as the brand continues to expand its national footprint.

Risks & concerns

  • Slowing F&B retail market

    medium

    The F&B retail space is experiencing a slight slowdown, with competitors shutting down stores, impacting Flurys' expansion pace.

    Also, at the same time because of India's growth story has slightly slowed down, particularly you would know that the F&B retail space is experiencing a slight slowdown particularly many of the competitor stores of even international brands as you are based in Mumbai, you would know that they have been shutting down.

    Management acknowledged

  • Delays in expansion pipeline projects

    medium

    EM Bypass, Pune, Juhu, and Navi Mumbai projects have experienced delays, pushing back operationalization timelines.

    For the last two quarters, we have actually consistently seen delays in our time lines. Now EM Bypass has been delayed from Jan 2029 to Jan 2030. Pune has seen 6 months delay. I can understand for Pune due to change in the FSI. But for again, Juhu, we have seen 3-month delay, given Navi Mumbai is now from 2029 has moved to 2030?

    Analyst acknowledged

Q&A highlights

7 direct
Impact of increased FSI on Park Pune project and monetization strategy Direct
Our FSI today has increased from 2.5 lakhs to 6 lakh 72 thousand square feet. Currently, at the moment, we are going ahead with the project of 250 rooms. And at the same time, we are reassessing in terms of how we would we like to monetize this asset and bring in additional value to our shareholders. It could happen that it could become a residential cum hotel, it could also happen that it could become a commercial or an IT park cum hotel.

Management explained the significant increase in FSI for the Pune project and outlined various monetization options, indicating potential for substantial shareholder value creation beyond just a hotel.

Asked by Archana Gude

Expected ADR for Malabar House and Purity acquisitions Direct
The Malabar House is in Fort Kochi, it is once again a Relais & Châteaux hotel enjoying currently ARRs of close to 15,000 and then Purity which is even at a higher luxury level which is 17 rooms and a boat at Vembanad Lake. This property is currently enjoying ARRs of around 14,000 but has a much higher potential of adding additional rooms.

Management provided specific current ARR figures for the newly acquired luxury properties and highlighted the potential for occupancy improvement, indicating strong revenue quality from these assets.

Asked by Archana Gude

Reasons for slowdown in Flurys new outlet additions in Q3 FY26 Direct
Firstly, the capital allocation during this quarter has been more towards the acquisition of the Zillion Hotel and Resort at Juhu Mumbai and then the acquisition of Purity and Vembanad at Kochi. ... Also, at the same time because of India's growth story has slightly slowed down, particularly you would know that the F&B retail space is experiencing a slight slowdown particularly many of the competitor stores of even international brands as you are based in Mumbai, you would know that they have been shutting down.

Management clarified that the slowdown was due to strategic capital reallocation towards hotel acquisitions and a general slowdown in the F&B retail market, rather than internal issues, and reiterated focus on revenue growth and profitability.

Asked by Archana Gude

Delays in expansion pipeline (EM Bypass, Pune, Juhu, Navi Mumbai) and revised timelines Direct
EM Bypass has been delayed from Jan 2029 to Jan 2030. Pune has seen 6 months delay. ... Juhu, we have seen 3-month delay, given Navi Mumbai is now from 2029 has moved to 2030? ... So now it looks that not only 250-room hotel at Navi Mumbai, it will be a 300-plus room hotel at Navi Mumbai as we go and start construction.

The analyst highlighted multiple project delays, and management provided updated timelines and explained that some delays (Pune, Juhu, Navi Mumbai) were due to FSI changes or design enhancements that would ultimately lead to increased room counts and greater value.

Asked by Vaibhav Muley

Drivers of sustained outperformance in the Kolkata market Direct
Kolkata for the last 10 years has been our flagship performing hotel. It is always been our flagship hotel, has been doing 100% occupancy over the last 10 years, except in the two COVID years. ... This is the highest RevPAR growth in the Kolkata market, whereas for the HVS report, the growth is only in the range of 6% to 9% because Kolkata's occupancy in the branded hotels is somewhere between 70% to 71%.

Management attributed Kolkata's consistent 100% occupancy and high RevPAR growth to a committed team, prime location in the central business and entertainment district, unique F&B offerings, and entertainment-driven demand, providing insight into the brand's competitive advantage.

Asked by Vinit Bajaj

Renovation plans, capex, and impact on ARR Direct
Typically, the renovation cost is roughly about 25 lakhs per room. That will remain, we will stay in that limit of 25 lakhs per room as far as the capex is drawn and doing about 100 rooms per annum. ... So, the focus in Delhi this year has been on F&B and we expect that Delhi revenues will definitely improve on the whole, on the F&B side, Delhi is a 100 plus crore hotel. We expect at least 10% improvement on account of renovations at the Delhi hotel.

Management detailed the per-room renovation cost, annual renovation capacity (~10% of inventory), and specific F&B-focused upgrades in Delhi, projecting a 10% revenue improvement from these efforts.

Asked by Jinesh Joshi

Overall capex plan for next 3 years and net debt trajectory Direct
So roughly at 1.2 crore per key, it is INR 950 crore capex. Out of which EM Bypass now 300, may become 350 as that is receivable from the sales proceeds. Kochi is around 60-64 and Zillion is 210 with 60 on renovation, 330 plus which is INR 330 crore it is the acquisition cost. Average capex per year which we do is INR40 crore for operational capex, which is like 100 rooms going every year and Flurys about INR 180 crore to INR 200 crore over a period of top 5 years. Our total capex of this becomes INR 1,570 crore.

Management provided a comprehensive breakdown of the INR 1,570 crore capex plan across various projects and segments, clarifying the funding sources including cash flows from asset monetization, which will help manage net debt.

Asked by Madhav Agarwal

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance Highlights

Apeejay Surrendra Park Hotels delivered its best-ever Q3 FY26 performance, with consolidated revenues reaching INR 200 crore for the first time. The company reported an EBITDA of INR 71 crore, translating to a robust EBITDA margin of 35.3%. This strong performance was underpinned by industry-leading occupancy levels of 90% and year-on-year improvements of 11% in ARR and 9% in RevPAR, reflecting disciplined execution and resilient demand across core markets.

Strategic Expansion and Pipeline Updates

The company is actively pursuing both organic and inorganic growth. Key acquisitions include a 76% stake in a Juhu, Mumbai property (to increase to 90% by FY27, opening March 2027) and the Malabar House and Purity properties in Kerala for INR 64 crore in Q3 FY25. The expansion pipeline includes 234 new keys in Q4 FY26 across 6 hotels and an additional 438 keys in FY27, bringing the total room count to 3,219 keys across 56 hotels by FY27. Projects like Park Pune and Navi Mumbai are seeing increased FSI, leading to higher room counts (Pune 250 rooms, Navi Mumbai 300+ rooms) and enhanced monetization potential.

Flurys Business Growth and Outlook

The iconic Flurys brand continues its growth trajectory, recording a 19% top-line growth in Q3 FY26 and 33% for the nine months. Despite a slight slowdown in Q3 store additions due to capital allocation towards hotel projects and a general F&B market slowdown, the company plans to add 14 new stores in Q4 FY26, reaching 120 stores. The long-term target is to expand to 200 stores by 2028 and 450-500 stores by FY30, with a revenue target of INR 500 crore in 3-4 years, focusing on high profitability and same-store growth of 9%.

Asset Monetization and Capital Allocation

The company maintains a strong financial position with a net worth of INR 1,329 crore and mutual fund investments of INR 58 crore. The Park Unizen project (EM Bypass Kolkata) is expected to generate INR 300-350 crore in cash flow over the next three years from serviced residence sales, with 30% expected in the current calendar year. This cash flow, along with potential monetization of the increased FSI at Park Pune, will support the total capex plan of INR 1,570 crore and help maintain a net debt to equity ratio between 0.1 and 0.2, and debt to EBITDA below two.

Renovation and Asset Enhancement

Apeejay Surrendra Park Hotels is committed to continuous asset enhancement through renovations. The company typically renovates about 10% of its inventory annually, with a cost of approximately INR 25 lakhs per room. In the current year, renovations include 28 rooms in Delhi, 30 keys in Chennai, 20 keys in Bangalore, and 60 rooms in Kolkata. These upgrades, particularly F&B enhancements in Delhi, are expected to drive at least a 10% improvement in F&B revenues for the Delhi hotel.

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