Samhi Hotels Q1 FY27 earnings call

Samhi Hotels is strategically positioned to capitalize on India's urbanization story, with a portfolio concentrated in dense office markets. This thesis proved robust in Q1 FY27, with net office absorption of approximately 11 million square feet across core markets. The company is actively shifting its portfolio mix, aiming for upper upscale hotels to constitute 60% of revenue by FY2030, up from 40-41% today. This shift is expected to enhance revenue per key and margins, particularly benefiting from recent GST changes that favor upscale segments.

For Q1 FY27, Samhi Hotels reported a total income of ₹308.3 crores, a 7.3% YoY increase. On a comparable basis, revenue growth was 10.8%, with same-store growth contributing 9.1%. Same-store RevPAR grew 9.6% YoY to ₹5,220, and portfolio occupancy reached 79.3%, up from 74.2% in the prior year. Despite a 4% decline in reported EBITDA due to one-time^📎 income in Q1 FY26 and a ₹9.2 crores impact from GST changes, comparable EBITDA grew a healthy 12.1%. PBT increased by 26.4% YoY to ₹32.7 crores, supported by a 25.5% reduction in finance costs to ₹37.7 crores.

Samhi continues to expand its asset-light experiential Leisure platform, RARE India, which now encompasses 75 hotels and 1,046 rooms across 15 states. The company opportunistically acquired Itmenaan Estate for approximately ₹12 crores, bringing the total capital invested in RARE to around ₹60 crores. Management anticipates RARE will generate ₹35-40 crores in EBITDA once stabilized, delivering a high Return on Capital Employed (ROCE) of 50%-55%. This segment is viewed as a significant value creator, despite its relatively small capital allocation.

As of June 30, 2026, net debt stood at ₹1,490 crores, with a net debt-to-EBITDA ratio of 3.2x (trailing 12-month) and 2.4x (operating assets). The effective interest rate is 7.8%, 300 basis points lower than at the time of the IPO. The Board passed an enabling resolution for a capital raise of ₹750 crores. This measure is intended to provide financial flexibility to respond to unforeseen market conditions or growth opportunities, ensuring the company remains well-capitalized and maintains a strong balance sheet.

F&B revenue growth experienced a slowdown in Q1 FY27, growing only 3.5%-4% compared to the overall revenue growth. This was primarily attributed to a shift in business mix towards domestic travelers, who typically spend less on F&B than international guests, as well as a renovation at a key Bangalore restaurant and event cancellations due to the West Asia crisis. Management expects F&B growth to recover as international travel stabilizes and event bookings pick up pace in subsequent quarters.

The dual-branded Navi Mumbai project is progressing as planned, with all previously reported issues fully resolved. Statutory approvals are moving forward, and design development is underway. The company anticipates hitting the ground for construction around April 2027. The project is expected to be fully operational by H2 FY2028, with major capital investments primarily scheduled for FY2029 and FY2030, ensuring alignment with the company's cash flow generation.