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Samhi Hotels Limited — Q2 FY26 earnings call

Call held 29 Oct 2025

Management summary

Samhi Hotels reported a strong Q2 FY26, driven by robust RevPAR growth and improved profitability. The company announced significant expansion projects in Navi Mumbai and Hyderabad, reinforcing its presence in key markets. With a delevered balance sheet and upgraded credit rating, Samhi Hotels is well-positioned to fund its next phase of growth through internal accruals and capital-efficient strategies.

Highlights

Same-store RevPAR grew by 11.2% year-on-year to INR 5,026.
Total income for the quarter was INR 296 crores, up 11% year-on-year.
EBITDA grew at INR 110 crores, a 14% increase, with margins improving to 37.3%.
Profit after tax stood at INR 99 crores, including a reversal of Navi Mumbai land impairment of INR 57 crores.
Net debt to EBITDA reduced to 2.9x (2.4x adjusted for growth projects).
Credit rating upgraded to A+ with a stable outlook.
Announced a landmark dual-branded hotel development in Navi Mumbai (Phase 1: 400 rooms, potential 700 rooms, INR 650 crores capex for Phase 1).
Signed a 260-room mid-scale hotel under a long-term variable lease in Hyderabad Financial District (investment of INR 45-50 lakhs per key).

Key financials

01 Total Income ₹296 Cr +11%YoY
02 Same-store RevPAR ₹5,026 +11.2%YoY
03 EBITDA ₹110 Cr +14%YoY
04 EBITDA Margin 37.3% +1.1%YoY
05 Profit After Tax ₹99 Cr +661.5%YoY
06 Net Debt ₹1,370 Cr
07 Net Debt to EBITDA 2.9×
08 Finance Costs ₹43 Cr -21.7%YoY

What they filed

Q1 FY27: revenue up 12.1%, net profit up 31.6% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	262	292	319	272	293 +12%	338 +16%	345 +8%	305 +12%
Expenses	170	183	197	182	186	216	233	207
EBITDA	92	110	122	90	107 +16%	122 +11%	112 −8%	98 +9%
Margin	35%	37%	38%	33%	37%	36%	32%	32%
Other income	3	2	-15	12	85	3	33	3
Interest	54	60	55	51	43	40	37	38
Depreciation	29	29	29	29	30	30	38	31
Profit before tax	12	22	23	23	120 +900%	55 +150%	69 +200%	33 +43%
Tax rate	-3%	-2%	-103%	17%	17%	13%	-477%	24%
Net profit	13	23	46	19	100 +669%	48 +109%	399 +767%	25 +32%
EPS	0.57	1.04	2.07	0.78	4.18	1.79	15.92	0.82

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.

Guidance & targets

Revenue

Same-store RevPAR growth Revenue · long-term · High confidence 9% to 11% CAGR

For quarter 2 FY '26, our same-store RevPAR grew by 11.2% year-on-year basis to INR5,026 perfectly in line with the long-term guidance of RevPAR growing between 9% to 11% CAGR.

— Ashish Jakhanwala
Total revenue growth for same-store hotels Revenue · next 3 to 5 years · High confidence 9% to 11% CAGR

But if you were to look at the structural story of demand continuing to grow and supply just not coming, we remain fairly committed and convinced about the guidance we've been giving that total revenue growth for same-store hotels will maintain 9% to 11% CAGR for the next 3 to 5 years.

— Ashish Jakhanwala
Total revenue CAGR (company) Revenue · next 3 to 5 years · Medium confidence 17%, 18%

Of course, we have hotels in our portfolio, which are due for rebranding, renovation, and those hotels would bring the above-average performance in terms of total revenue growth and setting the company, I think, on a path of a 17%, 18% CAGR for the next 3 to 5 years. We've not recomputed that with Navi Mumbai. But even before Navi Mumbai, we thought we should be able to get that over a 3- to 5-year period.

— Ashish Jakhanwala

Capex

Navi Mumbai Phase 1 development cost Capex · 3 to 4 years · High confidence INR 650 crores

The cost to complete the Phase 1 of this development will be about INR 650 crores, which includes land approvals and development costs for the initial 400 rooms, thus entailing a cost per key of about INR 1.65 crores to INR 1.7 crores per key, well below what would be considered replacement cost for similar projects in Mumbai. We estimate this capex to be staggered over a period of 3 to 4 years.

— Ashish Jakhanwala
Navi Mumbai total investment (700 rooms) Capex · long-term · Medium confidence approximately INR 1,000 crores

So when you divide INR 650 crores by 400, it's slightly top loading the cost, what we would encourage is you take INR 1,000 crores total investment over a long-term period, and the total investment there will be approximately INR 1,000 crores for 700 rooms.

— Ashish Jakhanwala
Hyderabad leased asset investment per key Capex · High confidence INR 45-50 lakhs per key

Just for your clarification, Hyderabad is a leased asset, and therefore, we have no investment in land, building and engineering equipment. So the overall project will be delivered at about INR 45- INR 50 lakhs per key, even though it's a 260-room hotel in HITEC City.

— Ashish Jakhanwala
Investable surplus Capex · High confidence about INR 1,700 crores

In terms of funding the capital expenditure, we had articulated in our capital markets presentation, which is also uploaded and actually even in the investor presentation yesterday that given the current run rate of revenues and EBITDA, we actually expect to see about INR 1,700 crores of investable surplus in the business.

— Ashish Jakhanwala
Trinity renovation investment (next round) Capex · summer (post February and March) · High confidence INR 20-25 crores

I think the next round of investment will happen in the summer, let's say, post February and March, should be around INR 20 - 25 crores.

— Ashish Jakhanwala
Trinity total renovation investment Capex · High confidence INR 25-30 crores

Previously INR 70-80 crores → INR 25-30 crores

We actually think that we would invest about INR 25 - INR 30 crores and not the INR 70-INR 80 crores to get to that intended average rate.

— Ashish Jakhanwala
Total capex (excluding Navi Mumbai) Capex · High confidence INR 1,100 crores (total), INR 800-850 crores (SAMHI's own)

So the total capex before Navi Mumbai was INR 1,100 crores, of which part of that was to be contributed by GIC. So on our own, the total capex is about INR 800 - INR 850 crores, right?

— Ashish Jakhanwala
Total capex (including Navi Mumbai Phase 1) Capex · High confidence INR 1,500 crores

And Navi Mumbai, we need to add to that, which is the first phase is about INR 650 crores. So about INR 1,500 crores. INR 1,500 crores is the total capex.

— Ashish Jakhanwala

Capacity

Navi Mumbai Phase 1 rooms Capacity · High confidence 400 rooms

The Phase 1 of this hotel project will comprise around 400 rooms with a potential to expand to 700 rooms, making the SAMHI's largest hotel by room count.

— Ashish Jakhanwala
Navi Mumbai total potential rooms Capacity · High confidence 700 rooms

— Ashish Jakhanwala
Hyderabad leased asset rooms Capacity · High confidence 260 rooms

The second major milestone this quarter is signing of a 260-room mid-scale hotel under a long-term variable lease in Hyderabad Financial District...

— Ashish Jakhanwala
Total rooms under active development or rebranding Capacity · near future · High confidence over 1,500 rooms

Across the portfolio, we now have over 1,500 rooms under active development or rebranding, which will take our portfolio to over 6,300 rooms in near future.

— Ashish Jakhanwala
Total portfolio rooms Capacity · near future · High confidence over 6,300 rooms

— Ashish Jakhanwala

Debt

Net debt to EBITDA Debt · short term, midterm · High confidence circa 3x (short term), 2.5x (midterm)

In terms of leverage, we are currently, let's say, at circa 3x. Our intended guidance was to go to 2.5x. We had accelerated that path because of GIC. We think we will not breach the circa 3x in the short term, and we will get to 2.5x in the midterm, right?

— Ashish Jakhanwala

Project Timeline

Hyderabad leased asset operational Project Timeline · High confidence 36 to 42 months

Number two, in terms of One Financial District Hyderabad, we expect this hotel to take about 36 months to 42 months for it to be operational.

— Ashish Jakhanwala
W Hyderabad opening Project Timeline · High confidence December 2026

We are targeting a December 2026 opening, which will be a marquee addition to our portfolio.

— Ashish Jakhanwala

Profitability

Trinity FY27 performance Profitability · FY27 · High confidence great year

So yes, I think Trinity is as with ACIC, Prashant, the Trinity conversion is happening better than we had anticipated and underwritten. So we do expect FY '27 to be a great year for Trinity, even though we would have not really fully renovated the hotel by then.

— Ashish Jakhanwala
Navi Mumbai EBITDA potential (700 rooms) Profitability · Medium confidence INR 180 - INR 185 crores

We think even if we take some blended performance for the current year, this on a full 700-room hotel is about INR 180 - INR 185 crores of EBITDA potential.

— Ashish Jakhanwala

Occupancy

Business hotels stabilized occupancy Occupancy · High confidence 75% and 80%

See, on the current state, we think an occupancy level, which is between 75% and 80% is where business hotels would stabilize.

— Ashish Jakhanwala
Long-term occupancy levels Occupancy · long term · Medium confidence 85% or so

I think there is a huge latent opportunity for hotels in the big cities. And as and when that opportunity starts playing out, you would see occupancy levels go to 85% or so.

— Ashish Jakhanwala

Interest Cost

Overall blended interest cost Interest Cost · FY27 · High confidence sub-8%

Previously 8.5% → sub-8%

So basis the current benchmarks, and Viraj, interest rates are highly dependent on the benchmarks. If you were to freeze the benchmarks, where they are today, I think very possible that our overall financing costs will come sub-8% in FY '27...

— Ashish Jakhanwala
Latest refinancing coupon Interest Cost · High confidence 7.55%

The actual coupon is going to be 7.55%.

— Ashish Jakhanwala

Tax

Cash tax payouts Tax · next few years · High confidence None

So you're right, Yash, we had reasonable tax shields available across entities. You would also - so we don't expect any cash payouts from the company at least for the next few years. Yes, a few years.

— Ashish Jakhanwala

Risks & concerns

Supply increase in Navi Mumbai
medium

Management acknowledges that 1,500 rooms are announced in Navi Mumbai (excluding SAMHI's asset), and more supply is expected, but they are prepared for it due to strong demand drivers like the airport and commercial developments.

Both acknowledged
Demand sensitivity to external events/economic cycles
medium

Management mentions 'unexpected surprises,' 'bad monsoons or terror attacks or economic activities because of certain things shifting' as factors that can dampen demand, influencing their strategy to diversify across segments and markets.

Management acknowledged

Q&A highlights

3 direct

Leverage and funding for new projects Direct

Given all of our debt is between 12 to 14 years with very little amortization in the first 3 to 5 years, we feel that a debt-to-EBITDA level of anywhere between 2x to 2.5x is very, very stable and healthy. As I said, our operating business has already reached that level. In terms of funding the capital expenditure... we actually expect to see about INR 1,700 crores of investable surplus in the business.

Addresses investor concerns about debt levels given new capex, clarifying funding strategy and comfort with current leverage.

Asked by Saurabh Srivastava from Arista Consulting

Navi Mumbai project rationale and capex Direct

So Prashant, interestingly, Mumbai came as a part of an acquisition because this was ACIC acquisition. And our excitement is that our underlying land cost, while book value was INR 71-odd crores, our actual cost that we paid for the piece of land was like INR 26 crores, right? So when you start a development in a market like Mumbai with an underlying land cost of INR 26 crores, we remain pretty excited that this is going to be a mid-teen ROCE investment for us.

Explains the strategic origin of the Navi Mumbai project, justifying the investment by highlighting low land cost and expected high ROCE, rather than a typical ground-up development.

Asked by Prashant Biyani

Strategy for mid-scale vs. upscale hotels and ROCE Direct

Murtuza, we did see unfortunate incidents like bad monsoons or terror attacks or economic activities because of certain things shifting. And as much as we are excited about today, we need to remain very, very cautious for the long term. I think mid-scale tends to produce insane amount of ROCEs if you do it right. So for instance, I will repeat that even today in our portfolio, the highest ROCE asset continues to be Holiday Inn Express and HITEC City Hyderabad, well 2 reasons. A, it's mid-scale -- 3 reasons. A, it's mid-scale, so very low capital; two, it was leased. So therefore, we never paid for land and building. Three, it's HITEC City Hyderabad.

Provides management's rationale for balancing mid-scale and upscale assets, emphasizing risk diversification and the high Return on Capital Employed (ROCE) achievable with capital-efficient mid-scale properties.

Asked by Murtuza Arsiwalla from Kotak Securities

3 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance and Financial Health

Samhi Hotels reported a robust Q2 FY26, with total income growing 11% year-on-year to INR 296 crores. Same-store RevPAR increased by 11.2% to INR 5,026, aligning with long-term guidance of 9-11% CAGR. EBITDA rose 14% to INR 110 crores, expanding margins to 37.3% from 36.2% last year. The company achieved a Profit After Tax of INR 99 crores, significantly up from INR 13 crores last year, partly due to a INR 57 crores reversal of Navi Mumbai land impairment.

Transformational Expansion into Navi Mumbai

The company announced a landmark dual-branded hotel development in Navi Mumbai, marking its entry into India's financial capital. Phase 1 will feature 400 rooms, with potential expansion to 700 rooms, making it SAMHI's largest hotel by room count. The project entails a Phase 1 cost of INR 650 crores over 3-4 years, with a cost per key of INR 1.65-1.7 crores, significantly below replacement cost. The total investment for 700 rooms is estimated at approximately INR 1,000 crores, with an expected EBITDA potential of INR 180-185 crores for the full 700-room hotel.

Deepening Presence in Hyderabad and Portfolio Growth

SAMHI further strengthened its Hyderabad portfolio by signing a 260-room mid-scale hotel under a long-term variable lease in the Financial District, with an investment of INR 45-50 lakhs per key, expected to be operational in 36-42 months. Progress on the W Hyderabad in HITEC City is on track for a December 2026 opening. Across the portfolio, over 1,500 rooms are under active development or rebranding, aiming to expand the total portfolio to over 6,300 rooms in the near future.

Deleveraging and Enhanced Financial Flexibility

The company's balance sheet is in its strongest position since listing, with net debt to EBITDA reduced to 2.9x (2.4x adjusted for growth projects). Average interest cost has fallen to 8.5%, and the credit rating was recently upgraded to A+. Management expects to maintain net debt to EBITDA around 3x in the short term and target 2.5x in the midterm, supported by an anticipated investable surplus of INR 1,700 crores from operating free cash. The overall blended interest cost is targeted to fall below 8% by FY27, with the latest refinancing coupon at 7.55%.

Strategic Rationale for Portfolio Mix and Market Selection

Management articulated a disciplined strategy focusing on India's most dynamic office markets and a balanced mix of mid-scale and upscale assets. They emphasized that mid-scale assets, particularly leased ones like Holiday Inn Express HITEC City, offer high Returns on Capital Employed (ROCE), with one asset achieving 45% ROCE, and help diversify risk. The Navi Mumbai project, originating from an acquisition with a low underlying land cost of INR 26 crores, is expected to yield a mid-teen ROCE, aligning with their capital-efficient growth philosophy.

Outlook and Capital Allocation

SAMHI projects a total revenue CAGR of 17-18% for the next 3-5 years, even before factoring in Navi Mumbai. The total capex, including Navi Mumbai Phase 1, is estimated at INR 1,500 crores, which will be funded primarily through operating free cash and GIC infusion for some projects. The company anticipates no cash tax payouts for the next few years. Management remains confident in maintaining financial discipline while delivering growth, leveraging its strong balance sheet and robust free cash flows.

This is an AI-generated summary of a publicly available earnings call transcript.

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