Samhi Hotels Limited

Samhi Hotels reported a strong Q1 FY26, with total income growing 13% year-on-year to INR 287 crores. EBITDA increased 19% year-on-year to INR 106 crores, achieving a consolidated margin of 37%. Profit After Tax (PAT) saw a significant rise, more than tripling to INR 19.2 crores. Same-store RevPAR stood at INR 4,760, up 10% year-on-year, and same-store income grew 9.1% year-on-year. Management noted that while May was soft due to geopolitical events, performance rebounded to April levels from June onwards, indicating a short-term blip.

The company continues its disciplined approach to capital recycling, having monetized over INR 210 crores of assets since FY23 at an average EV to EBITDA multiple of 20x. The recent sale of the Caspia Delhi asset for INR 65 crores, which was operating at a net loss of INR 1.5 crores in FY25, will further reduce total net debt to approximately INR 1,370 crores. This strategic move, coupled with a INR 750 crores capital raise from GIC, has strengthened the balance sheet, leading to an ICRA credit rating upgrade from A- to A with a positive outlook.

Samhi Hotels is actively expanding its upscale portfolio with over 1,000 rooms in various stages of rebranding, expansion, or development. Marquee additions include the W in Hyderabad and the Westin-Tribute portfolio in Bangalore. The W Hyderabad is expected to generate approximately INR 110 crores in incremental revenue, with full operations anticipated in FY28. The Trinity Bangalore hotel, now managed by Marriott, is projected to achieve 25-30% revenue growth in the next 12 months without significant renovations.

Management provided a robust outlook, projecting total revenue to reach INR 2,200-2,300 crores and EBITDA to be INR 600-630 crores in the coming years, driven by sustained same-store growth of 9-11% and new inventory additions. Annualized capital expenditure is estimated at INR 175-200 crores for the next few years, allocated towards completing current projects and new conversions. The company expects to generate an investable surplus of over INR 1,700 crores over the next 5 years to fund future growth.

The strengthened balance sheet has enabled a reduction in the average blended interest rate to 8.5%, with incremental financing expected at 8.2%. The annual interest outflow is projected to be around INR 135 crores going forward^⏳. ESOP expenses are set to decrease from INR 2.4 crores per quarter in Q1 FY26 to INR 1 crore per quarter post-FY27, with a long-term annual target of approximately INR 10 crores, reflecting improved financial efficiency.

The Food & Beverage (F&B) segment, which had been a drag in previous quarters, showed a growth of 7-8% in Q1 FY26. Management anticipates F&B revenue growth to accelerate to 10-11% in H2 FY26, aligning with RevPAR growth. This improvement is expected as renovated boardroom spaces in key upscale hotels, including Hyatt Place Gurgaon, Sheraton Hyderabad, and Hyatt Regency Pune, become fully operational by September-October, attracting more corporate and MICE demand.