Samhi Hotels Limited

FY25 was a transformational year for SAMHI Hotels, marking its first full financial year post-IPO. The company reported a group-level revenue increase of 17.5% year-on-year, reaching INR 1,150 crores. Same-store assets demonstrated strong performance with a 16.5% year-on-year RevPAR growth. Consolidated EBITDA pre-noncash ESOP for the full year stood at INR 443 crores, reflecting a 27% year-on-year growth, setting a strong base for future performance. The company also reported its first full year of profit, with a PAT of INR 86 crores for FY25.

SAMHI made two significant acquisitions in FY25 to augment future growth. The Trinity Hotel in Whitefield, Bangalore, a 142-room asset, is being redeveloped into a 362-room dual-branded Westin and Tribute portfolio hotel, expected to add INR 180-200 crores in annual revenue. Additionally, a long-term variable lease was signed for a 170-room W hotel in Hi-tech City, Hyderabad, projected to add INR 100 crores in total revenue upon opening in H2 FY27. These developments, along with 300 new rooms in Holiday Inn Express and additions in Sheraton Hyderabad and Hyatt Regency Pune, are expected to drive incremental revenues in FY26.

A milestone strategic partnership with GIC, Singapore's sovereign wealth fund, was established, with GIC committing INR 750 crores of capital, of which INR 580 crores have been received. This infusion has materially strengthened SAMHI's balance sheet, reducing net debt to EBITDA to 3.2x on an FY25 basis. Post GIC capital infusion, net debt stands at approximately INR 1,430 crores. The partnership also provides INR 150 crores in capex funding for the Western Tribute portfolio Whitefield development, enhancing the company's ability to accelerate growth through acquisitions and long-term leases.

Same-store assets delivered a healthy 15.8% year-on-year topline growth and 22% EBITDA growth in Q4 FY25. The ACIC portfolio, after 18 months of cost intervention, is now crossing a 40% milestone. For the three ACIC assets not undergoing renovation, Q4 saw 12.9% RevPAR growth, 6% total revenue growth, and 11% EBITDA growth. The full ACIC portfolio (all 5 hotels) reported 3.6% total income growth and 8.2% EBITDA growth in Q4. For FY25, ACIC EBITDA improved to INR 74.2 crores from INR 66.8 crores in FY24.

Management noted that while RevPAR growth remains strong, F&B growth has been muted, contributing to a 4% drag on total revenue growth in Q4. F&B growth was 6.6% year-on-year in Q4. Initiatives such as the renovation of ballrooms in Sheraton Hyderabad and Hyatt Regency Pune are underway, with results expected to show by H2 FY26. The goal is for F&B growth to reach double digits to minimize its dilutive effect on overall revenue growth, though room revenue is expected to continue outperforming F&B due to strong demand.

Renovation and rebranding efforts are key to unlocking value. The Four Points in Pune is undergoing renovation to be converted to Courtyard by Marriott, with completion expected by Q1 FY27, targeting 20-25% total revenue growth post-conversion. The Jaipur Four Points will be rebranded to Tribute Portfolio, with renovation planned between April and August 2026, aiming for upwards of 30% total revenue and RevPAR growth. These projects are strategically phased to minimize revenue loss while maximizing future potential.

Total capital expenditure for FY26 is projected to be between INR 175-200 crores. Of this, INR 50 crores will be contributed by GIC for the Bangalore asset, and approximately INR 125 crores will be funded from SAMHI's own cash flows. This includes INR 125-150 crores for growth capex and INR 20 crores for maintenance capex. Management anticipates approximately INR 360 crores of free cash before capex in FY26, providing ample liquidity for growth and deleveraging.

Management remains bullish on demand-supply dynamics in core markets like Bangalore, Hyderabad, Pune, and NCR, which contribute 75% of total revenues. Bangalore continues to see demand growth (2x supply growth) driven by airline traffic (11.5-12% growth) and office growth (8-9% growth), with RevPAR growth of 40% in Q4 and 22.8% for FY25. Hyderabad, Pune, and NCR are experiencing negligible new supply. The company expects a clear runway for growth over the next 3 years without significant supply pressure, particularly in its micro-markets.