Chalet Hotels Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

2 Shwetank Singh (MD & CEO), Nitin (CFO) - full name not provided in transcript

Analysts

Number not reliably determinable from transcript (at least 8 questioners identifiable)

Financials & KPIs

Geographic & Segment Commentary

• Leisure Portfolio: Delivered 19% RevPAR growth with balanced occupancy and ADR improvement; resort occupancy ~51% in Q1, trending toward 60-65% stabilized. Westin Rishikesh performing strongly and tracking bang on feasibility; Athiva Khandala ramping with 4.9+ guest rating across ~500 reviews, weekend ADR sustaining north of ₹15,000, positioned as a new premium MICE market in Khandala.
• Mumbai MMR: Moderated demand due to fewer events, with recovery in June. JW Sahar continued outperforming with steady occupancies and good ADR growth. Powai (under construction) and Vashi (renovation complete) pulled down MMR RevPAR; these constitute >60% of MMR inventory. Vashi rebranding to be announced within weeks; Powai porch and Western Banquet connectivity expected by end of Q2 FY27.
• Pune: High double-digit RevPAR growth, driven by strong domestic business demand.
• Hyderabad: Largely FTA-driven market; flattish occupancy with sustained ADR growth. Westin Hyderabad Mindspace (leased asset) Deloitte contract renewed for one more year.
• Bangalore: FTA-dominated market; lower occupancy YoY due to reduced group bookings and lower relocation business (clusters in Q1), but ADR growth sustained.
• Commercial Real Estate: 91% committed portfolio occupancy; June 2026 monthly rental exit run rate ₹290 million; additional 66,000 sq ft LOI signed at Bangalore; Cignus Tower II (0.9 million sq ft) commissioning in FY27-28 expected to be a major growth driver.

Company-Specific & Strategic Commentary

• Powai Complex Transformation: Strategically important integrated asset. Two hotels (upgraded Renaissance to Westin in 2022) plus 0.9 million sq ft commercial (90%+ occupied, ~₹1,300 million annual EBITDA), another 0.9 million sq ft under construction. Revenue potential estimated at ₹9-10 billion. Additions include Nox sky lounge (₹10 million/month revenue in first year), gaming/sports facilities; banquet expansion planned (3x current, among largest in MMR).
• Athiva Brand Launch: Continuing investment in marketing and awareness; Vivaah by Athiva wedding theme receiving encouraging response; management committed to building Athiva as standalone brand without third-party tie-up.
• Udaipur (Inder Residency): Expansion evaluation underway; requires approvals from local authorities and army cantonment; existing building work started with complete transformation planned including villas, rooftop banquet facilities, central swimming pool.
• Growth Pipeline: Planned capex of ~₹30 billion over FY27-FY29 across hospitality and CRE, largely funded through internal accruals. Pipeline includes Cignus Tower II (substantial completion by FY27-end), Taj Delhi Airport (minimum 70 rooms in Q4 FY27, balance by Q1 FY28), Mindspace excavation at Hyderabad and Airoli on track, South Goa construction start expected post-monsoon. Hospitality portfolio expected to exceed 5,000 keys with 500+ keys annual organic addition run-rate.
• Balance Sheet and Capital Allocation: Net debt flat for eight quarters despite acquisitions and ongoing projects; current yearly rentals provide eligibility for ~₹2,000 crore LRD leverage advantage; commercial rentals service entire interest cost, freeing hotel cash flows for reinvestment.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

MMR Performance and Recovery

• Question: MMR underperformance for several quarters; booking window, MICE outlook, Fairmont competition impact? (Karan Khanna, Ambit Capital)
• Answer: JW Sahar remains an outperformer with steady high occupancies and good ADR growth. Powai pain is temporary, tied to construction - the porch and banquet connectivity return by end of Q2 FY27, noisy work ending within another quarter and a half; expects Powai to "come back roaring." Vashi (FPS) investment of ₹93 crore complete, rooms handed to operations, rebranding announcement imminent; expects "high levels of performance" from next quarter onward. Supply appears absorbed; no major new supply in next 1-2 years. (Shwetank Singh)

Leisure Allocation and Udaipur Expansion

• Question: Does leisure performance change 20% portfolio allocation target? What is Udaipur expansion potential and timeline? (Karan Khanna, Ambit Capital)
• Answer: No strategy change based on one or two quarters; leisure stays at ~20% of portfolio. Udaipur expansion scope being evaluated pending two-step approvals (local authorities, army cantonment); clarity expected within next 1-2 quarters. Existing building work already started - complete transformation including villas, banquet facilities, rooftop spaces, central pool; will launch as Athiva brand when totality is ready. Returns expected to be "very exciting." (Shwetank Singh)

Occupancy Trajectory and Resort Ramp

• Question: With Bangalore stabilization, Powai/Vashi completion, resort ramp-up - can occupancy reach 70%+ by end FY27 or H1 FY28? Resort occupancy at 51% vs 60% target - tracking ahead? (Vikas Ahuja, Antique Stock Broking)
• Answer: Confident on all three growth drivers stabilizing and providing impetus. Resort stabilized occupancy typically 60-65%; Q1 at ~51%, trending upward. Athiva specifically creating a new premium market in Khandala; weekends already getting more than fair share with ADR sustained north of ₹15,000, MICE education ongoing. (Shwetank Singh)

Athiva Distribution Strategy and Marriott Tie-Up

• Question: Any sales/distribution changes or Marriott agreement contemplated for Athiva? (Achal Kumar, HSBC)
• Answer: No plans to tie up with another brand; Athiva is an in-house brand experiment showing encouraging signs. Weekends strong with rate discipline; weekday MICE requires direct sales outreach. Customer acceptance validated by 4.9+ rating across ~500 online reviews - "that's what gives us the most confidence." (Shwetank Singh)

ARR Growth Composition and Commissions

• Question: How much commission paid for GDS/OTA bookings? Is 8.5% ARR growth a function of channel mix change vs actual price hike? (Jinesh Joshi, PL Capital)
• Answer: Commissions are at the bottom end of the market given large brand tie-ups (Marriott, Accor); evidenced by top-end EBITDA and room margins. No major change in distribution channel mix; segmentation shifts (groups, special corporates given slightly more attractive rates to retain business) were managed to hold all segments despite FTA disruption. Declined to share specific contract numbers publicly. (Shwetank Singh)

Leisure Occupancy Sustainability and Outbound Reversal Risk

• Question: Is leisure occupancy expansion sustainable? If global situation normalizes and outbound travel resumes, will domestic leisure occupancy be impacted? (Vaibhav Muley, Haitong Securities)
• Answer: Portfolio not yet stabilized, so growth to 60% is "a given" - the question is speed, which depends on asset management and operator execution. Segments strong: social strong, MICE beginning to move, FITs filling weekends. Expects leisure portfolio to continue growth trend. (Shwetank Singh)

Metro Hotel Business-Leisure Mix

• Question: Any opportunity to drive staycation/leisure demand into metro hotels given corporate moderation? Current business vs leisure mix? (Prateek Kumar, Jefferies)
• Answer: Actively attempting, particularly at Powai (lake views, new pickleball court, games room conversion); but Whitefield Bangalore attempts failed - "no way to trigger leisure demand." Won't dilute positioning with aggressive rate cuts to force demand; watching trend but no major shift expected. (Shwetank Singh)

Deloitte Contract at Westin Hyderabad

• Question: Was the 3-year Deloitte contract expiring this fiscal? Extension or keep open? (Anuj Upadhyay, Investec)
• Answer: Renewed for one more year. During Middle East situation, Deloitte consolidated customers from other hotels into this property; relationship now treated as partnership. Will revisit at end of fiscal - rental growth and continued interest to be evaluated. "Conversation is in a very positive manner." (Shwetank Singh)

ElEma Share of Hospitality Revenue

• Question: What is ElEma's share in hospitality revenue for Q1? (Omkar, Motilal Oswal)
• Answer: Approximately 43%. (Shwetank Singh)

Key Takeaway

Chalet Hotels delivered a resilient Q1 FY27 with core revenue of ₹5,140 million (+10% YoY) and EBITDA of ₹2,400 million (+15% YoY) despite a flat international air travel scenario from the West Asia conflict; hospitality EBITDA margin expanded 92 bps to 42.6% as resort stabilization (Westin Rishikesh, Athiva Khandala) began contributing, while leisure RevPAR jumped 19% YoY. The commercial real estate segment continued providing stable high-margin cash flows with June 2026 monthly rental run-rate of ₹290 million and 85% EBITDA margins, positioning the company - with its ₹30 billion FY27-29 capex plan, Cignus Tower II and Taj Delhi Airport as near-term catalysts, and net debt flat for eight consecutive quarters despite ongoing acquisitions - for a step-change in FY28 onwards. Management's immediate focus centers on Powai construction completion (porch and banquet by Q2 FY27-end) to reclaim occupancy ahead of the H2 wedding season and the imminent Vashi rebranding announcement. Key watch points include the volatile geopolitical environment blurring forward visibility, Udaipur and South Goa approval timelines, and the pace of Athiva's MICE market development; management remains confident in domestic demand as the structural growth driver, though it declined to provide forward guidance given day-to-day geopolitical uncertainty.