Chalet Hotels’ Q1FY27 consolidated revenue cannot be compared year‑on‑year because the company added residential income in Q1FY26, selling 95 units, versus just one unit in Q1FY27. On a comparable basis, the hotel’s revenue excluding residential sales was about Rs 5.1 billion, showing a 9.6% year‑on‑year increase that matches our own and market estimates.
Hospitality revenue rose by roughly 8.5% to about Rs 4.2 billion, led by an 8.5% rise in average daily rate (ADR). However, occupancy fell by 120 basis points to 64.8% as foreign tourist arrivals—making up about 35‑40% of guests—remained weak due to tensions in West Asia.
The leisure segment performed better. RevPAR, which considers both ADR and occupancy, increased by about 19% year‑on‑year on both ADR and occupancy bases.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) excluding residential income stood at roughly Rs 2.4 billion, giving an EBITDA margin of 46.7%. This margin outperformed analyst and street estimates by 469 and 345 basis points respectively.
Within the hospitality arm, the margin climbed to 42.6%, up 90 basis points from the previous year. The real‑estate and annuity business posted a margin of 85%, up 190 basis points.
Analysts expect the same growth trajectory in Q2FY27, anticipating a robust recovery in the second half of FY27. They project a 10% year‑on‑year growth for FY27, followed by a stronger FY28 with an estimated 23.4% growth.
The increase in FY28 growth is driven by the addition of 380 rooms from the Taj Delhi property and the CIGNUS‑II project, which will start contributing from Q1FY28.
Given these outlooks, a BUY rating is retained on the stock. The target price has been revised to Rs 1,250, valuing the company at 20‑times FY28 EBITDA for the hospitality segment and applying a 10% cap rate to the commercial annuity.
The company’s performance highlights the resilience of its core hotel operations despite a softer travel environment and the potential upside from new room additions.
Investors are advised to review these figures in the context of broader market conditions and their own financial goals.