Suba Hotels Limited — Q3 FY26 earnings call

Call held 27 Jan 2026

Management summary

Suba Hotels Limited reported strong Q3 FY26 revenues of INR 35.28 crores, contributing to a nine-month FY26 total of INR 79.07 crores. The company achieved significant H1 FY26 growth with revenues up 49% YoY, EBITDA up 54% YoY, and PAT up 58% YoY, driven by an asset-light expansion strategy and strong operational metrics like 73% occupancy and an ARR of INR 3,276. With 901 keys in the pipeline, 95% of which are expected to be operational within 12 months, and a strategic focus on Tier 2/3 markets and diverse operating models, Suba Hotels is well-positioned for continued growth and profitability.

Highlights

  • Q3 FY26 Revenue of INR 35.28 crores, contributing to nine-month FY26 revenue of INR 79.07 crores.

  • H1 FY26 revenue grew 49% year-on-year, EBITDA grew 54%, and PAT grew 58%, with expanding margins.

  • Domestic market occupancy stands strong at 73% with an average room rate (ARR) of INR 3,276.

  • Added approximately 528 keys post-IPO, with over 85% of that expansion being asset-light.

  • 901 keys in the pipeline, with 95% expected to become operational within the next 12 months (13-14 hotels).

Key financials

3 periods

Headline

  • 9-Month FY26 Revenue
    ₹79.07 Cr
  • Domestic Occupancy
    73%
  • Domestic ARR
    ₹3,276
  • Dubai Hotels ARR
    ₹4,300

Q3 FY26

  • Revenue
    ₹35.28 Cr

H1

  • FY26 Revenue Growth
    49%
  • FY26 EBITDA Growth
    54%
  • FY26 PAT Growth
    58%

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue29 50 44 71
EBITDA6 17 9 17
Net profit3 12 5 13
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.

Segment breakdown

  • Revenue Contribution by Operating Model
    73% Revenue Share Hotels22% Owned Hotels5% Franchise & Management Hotels
  • Revenue Mix by Segment
    35% Corporate & Business Travel30% Leisure & Domestic Tourism15% MICE10% Wedding5% Pilgrimage

Capital allocation

medium confidence
  • Capex Capex disclosed last mile funding through revenue share agreements
    • Renovation of hotel in Mirzapur
    • Upgradation work of hotel in Ahmedabad
    • Pithampur project (partly operational, 40 rooms under construction)
    The usage of funds has been very clear and very deliberate. Our focus on renovation and upgradation and last-mile funding is already transferring into visible action on the ground. We have already completed renovation of our hotel in Mirzapur and have commenced the upgradation work of our hotel in Ahmedabad with similar initiatives planned across the portfolio.

Guidance & targets

Profitability

  • ARR Growth Profitability · next year · High confidence 10-15%
    Looking ahead, we anticipate 10% to 15% ARR growth next year, complemented by 5% to 7% occupancy percent gain, driven by our strategic initiatives.

    — Chandrakant Shetty

Volume

  • Occupancy Gain Volume · next year · High confidence 5-7%
    Looking ahead, we anticipate 10% to 15% ARR growth next year, complemented by 5% to 7% occupancy percent gain, driven by our strategic initiatives.

    — Chandrakant Shetty

  • First Year Occupancy (new hotels) Volume · first year of operation · High confidence 55%
    We're targeting at a conservative number of around 55%, which we should be able to achieve.

    — Premal Zaveri

Capacity

  • Pipeline Operational Keys Capacity · next 12 months · High confidence approx 850 keys (95% of 901 keys)
    Of these 901 pipeline keys, we expect approximately 850, that's over 94%, around 95%, to become operational within just the next 12 months.

    — Premal Zaveri

  • New Hotels Operational Capacity · next 12 months · High confidence 13-14 hotels
    we expect about approximately, you can say, 13 to 14 hotels coming up in that period of the next 12 months.

    — Premal Zaveri

  • Choice Hotels Expansion Capacity · every year · High confidence minimum 500 rooms
    So in terms of growth, what are the agreement that we have with Choice Hotel is to expand by a minimum of 500 rooms every year.

    — Mubeen Mehta

Other

  • Operational Stability (new hotels) Other · after opening · High confidence within four months
    So operational stability and profitability is something that we target for within four months. The hotel has to be started and it has to stop losing money within four months.

    — Mubeen Mehta

What to watch in Q4 FY26

Pithampur Project Completion

within 45 days
Current 40 rooms operational, 40 under construction
Target Full 80 rooms operational

Why it matters

Completion of this project will add to operational capacity and revenue, reflecting effective capital deployment.

The capital work in progress what you see on the balance sheet is our Pithampur project that is partly operational and partly under renovation. We have about 80 rooms over there. 40 rooms have been operational in the last year and 40 rooms that we had accounted for as objects of the issue are under construction now and are due to start within 45 days.

Q&A highlights

8 direct
Booking Sources and OTA Arrangement Direct
So from the OTA, the website is a part of OTA segment. So OTA contributes average around 22% to 25% of the business. Corporate takes a major share, which is around 50% to 60% of the business. ... So OTA charges us around 17% to 20% of commission.

Clarified the distribution channels and cost structure for bookings, indicating a significant portion comes from corporate direct bookings.

Asked by Madhav Agarwal

Franchisee Quality Control and Revenue Support Direct
So what we do basically is that we have a training session every quarter where we go ahead and we train the staff. ... We also have a 30 people sales team across the country today that is actively selling all our hotels.

Explained the mechanisms for maintaining brand standards and supporting revenue generation for asset-light franchisee models.

Asked by Saurav Singh

Asset-Heavy vs. Asset-Light Strategy Direct
So asset-heavy is basically something that we want to do. Look, as a company, we've decided to do one. We've built our own asset, at least one in a year because what happens is that, yes, I understand that the return metrics there are not as good as normal, but at the same time never say never. Tomorrow, anything is possible.

Revealed a strategic shift towards developing at least one owned asset per year to build financial resilience and leverage capacity, balancing the asset-light model.

Asked by Naville

Marketing Spend and Loyalty Program Focus Direct
what we want to do and what we want to concentrate towards is the loyalty program. What happens is that the loyalty program has a lot more to offer to a customer than just low prices. Why would you come stay with me today?

Highlighted the company's strategy to prioritize its upcoming Choice Privileges loyalty program over traditional marketing spend for customer acquisition and retention.

Asked by Aniruddha Pandhare

International Expansion Plans Direct
we are now looking at expanding in other markets in that region of Saudi Arabia, Ras Al Khaimah maybe and maybe a few other markets around that region. ... Very selectively, we will go for international markets.

Confirmed plans for selective international expansion beyond Dubai, specifically mentioning Saudi Arabia and Ras Al Khaimah, indicating future growth avenues.

Asked by Naville

Choice Hotels Minimum Expansion Commitment Direct
So in terms of growth, what are the agreement that we have with Choice Hotel is to expand by a minimum of 500 rooms every year. That is just Choice Hotels.

Provided a concrete, annual minimum growth commitment of 500 rooms specifically from the Choice Hotels partnership, separate from other brands.

Asked by Naville

Revenue Breakdown by Operating Model Direct
So just for the sake of clarity, we do about 73% of our business comes from revenue share hotels. 22% comes from owned hotels and 5% business comes from franchise and management hotels together.

Provided a crucial breakdown of revenue contribution by operating model, offering insight into the profitability and risk profile of different business segments.

Asked by Amin Hemant

Pithampur Project Status and Capital Work in Progress Direct
The capital work in progress what you see on the balance sheet is our Pithampur project that is partly operational and partly under renovation. We have about 80 rooms over there. 40 rooms have been operational in the last year and 40 rooms that we had accounted for as objects of the issue are under construction now and are due to start within 45 days.

Clarified the nature and timeline of a significant capital project, indicating upcoming operational capacity additions.

Asked by Kushal Chauhan

2 min read 8 chapters

Detailed narrative

Q3 FY26 Performance Overview

Suba Hotels reported Q3 FY26 revenues of INR 35.28 crores, contributing to a nine-month FY26 total of INR 79.07 crores. The company achieved robust H1 FY26 growth with revenues up 49% YoY, EBITDA up 54% YoY, and PAT up 58% YoY, demonstrating strong operational leverage and margin expansion. This performance reflects the company's focus on execution and strategic capital deployment.

Asset-Light Expansion Strategy

Post-IPO, Suba Hotels added approximately 528 keys, with over 85% being asset-light, reflecting a deliberate strategy to deploy capital efficiently and scale the platform. The company operates 97 hotels with 4,517 keys across 50+ cities, with over 80% of its portfolio concentrated in resilient Tier 2 and Tier 3 markets. This multi-model operating platform allows for rapid scaling and protection of downside risk.

Operational Metrics & Revenue Mix

The domestic market maintained a strong occupancy of 73% and an average room rate (ARR) of INR 3,276. The revenue mix is diversified, with 35-40% from corporate/business travel, 30-35% from leisure/domestic tourism, 15-20% from MICE, and 10-15% from weddings. This balanced mix provides a stable year-round occupancy base and predictable seasonality.

Development Pipeline & Future Growth

The company has a signed pipeline of 901 keys, with approximately 95% (around 850 keys) expected to become operational within the next 12 months, translating to 13-14 new hotels. This pipeline is largely asset-led, ensuring faster ramp-up and a 20% expansion without stressing the balance sheet. Additionally, the agreement with Choice Hotels commits to a minimum expansion of 500 rooms per year.

Asset Upgradation & Renovation

Suba Hotels is actively investing in improving asset quality, having completed renovation of its Mirzapur hotel and commenced upgradation work in Ahmedabad. The Pithampur project, which is partly operational, has 40 rooms under construction and is expected to be fully operational within 45 days. These initiatives aim to enhance guest experience and contribute to long-term cash flow.

Loyalty Program & Direct Bookings

The company plans to launch Choice Privileges, Choice Hotels' international loyalty program, later in 2026. This program will allow customers to earn and redeem points across the global Choice Hotels network and with airline partners. This strategy aims to drive direct bookings and enhance customer loyalty, reducing reliance on aggressive marketing spend.

International Market Presence

Suba Hotels has a strong presence in Dubai with three hotels (Click Square, Click Grand, Click Park) showing high occupancies (94.7%, 97%, 87.3% respectively) and an average ARR of 172 dirhams (approx. INR 4,300). Building on this success, the company is selectively exploring expansion opportunities in other regions like Saudi Arabia and Ras Al Khaimah, focusing on value-accretive developments.

Operating Model Revenue Contribution

The company's business is primarily driven by revenue share hotels, which contribute 73% of the total business. Owned hotels account for 22% of the business, while franchise and management hotels contribute 5%. This diversified operating model allows Suba Hotels to deploy capital selectively, optimize returns, and scale rapidly with minimal capital.

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