Apeejay Surrend.

Apeejay Surrendra Park Hotels reported a robust Q4 and full year FY25. Q4 revenue grew 16.3% year-on-year, with operating EBITDA increasing by 21% and PAT by 44.1%. For the full year FY25, consolidated net revenues rose 9.1% to Rs. 653 crore, and EBITDA reached Rs. 226 crore, up 10.24% from Rs. 205 crore in FY24. PAT for FY25 was the highest ever at Rs. 84 crore, marking a 21.74% increase from the previous year, reflecting strong demand across business and leisure segments.

The company made significant strategic moves with the binding MoU to acquire 60 service apartments in Juhu, Mumbai, for Rs. 209 crore (90% stake), expected to contribute Rs. 25-30 crore to EBITDA annually post-stabilization in FY27. Additionally, it acquired Malabar House and Purity Hotel in Kochi/Vembanad Lake for Rs. 60 crore, adding 31 rooms. On the asset-light front, 206 keys have been signed for FY26, with an annual target of adding 500 keys to the portfolio, aiming for 3,000 asset-light keys over the next five years from the current 1,000.

The iconic Flurys brand expanded its footprint, crossing 100 outlets to reach 103, with 25 new outlets opened in FY25. The company is on track to reach 200 stores by 2027. Flurys reported a 12% EBITDA margin for FY25 (8-9% post-rental) and aims for Rs. 1 crore revenue per mature store, up from the current average of Rs. 65 lakhs. The strategy involves shifting the mix from kiosks (51% of outlets) to more profitable cafe formats (39% of outlets), which are expected to drive faster revenue growth and margin improvement.

Apeejay Surrendra Park Hotels outlined a substantial CAPEX plan of Rs. 300-320 crore for FY26, including Rs. 166 crore for the Juhu acquisition's first tranche, Rs. 40 crore for normal CAPEX, and Rs. 25 crore for Flurys. The overall CAPEX plan for the next five years is estimated at Rs. 1,700-1,800 crore, targeting an increase in total keys to 5,403 from 2,394. Major greenfield projects in Pune, Visakhapatnam, Kolkata (250 rooms + 70 service apartments), and Navi Mumbai (expanding to 250 rooms) are progressing, with the Kolkata service apartments expected to generate Rs. 100 crore cash flow annually for three years.

The company emphasized its strategy to strengthen presence in all major metro cities, with Mumbai being a 'missing link' now addressed by the Juhu acquisition. This move is expected to leverage Mumbai's high ARR market (Rs. 20,000-25,000) and the company's consistent 90%+ occupancy. The acquisition of Relais & Chateaux properties in Kochi, with ARRs around Rs. 20,000, further reinforces its luxury positioning and commitment to enhancing average room rates across the portfolio, contributing to a pan-India presence.

Management highlighted its disciplined approach to capital allocation, focusing on viable acquisitions with specific land cost parameters (e.g., not exceeding 20-30% of project cost). Despite being net cash positive, the company plans to utilize internal accruals and a line of credit for its Rs. 1,500 crore CAPEX pipeline, aiming to maintain a debt-to-EBITDA ratio of up to 2. The board's approval of a maiden 50% dividend reflects confidence in performance and commitment to sharing success with shareholders, further validated by an A+ Stable credit rating upgrade.