Event Participants
Executives
3 Anirudh Reddy Konda Reddy, Pradyumna Kodali, Puli Venkata Krishna Reddy
Analysts
8 Animesh Jain, Madhav Agarwal, Pahal Sharma, Prashant Prabhakar Kshirsagar, Samaira Gavanshi, Santosh Shetty, Shia, Vivek Gupta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹44.9 crores | Up 77% YoY from ₹25.4 crores, driven by full availability of renovated Courtyard (168 keys) and MEA acquisition contributing for full quarter |
| EBITDA | ₹11.8 crores | Up 144% YoY from ₹4.8 crores; margin expanded 725 bps to 26.3% from 19% on operating leverage and cost efficiencies |
| Profit After Tax | ₹1.4 crores | Turned around from ₹3 crores loss; margin 3.2% vs -11.9%; offset by higher depreciation (₹5 cr) and finance cost (₹5.4 cr) |
| Combined Occupancy | 76.25% | Up 22.6 ppt from 53.65%; Marriott at 72.04% (from 59.96%), Courtyard at 83.65% (from 38.31%) post-renovation normalization |
| Combined ADR | ₹6,107 | Down 12.2% YoY from ₹6,952; decline due to full inventory back online and convention center outage; expected to recover with renovation completion |
| Combined RevPAR | ₹4,657 | Up 24.9% YoY from ₹3,730; Courtyard RevPAR nearly doubled to ₹5,006, Marriott improved 5.7% to ₹4,457 |
| Room Revenue (Hotels) | ₹19.6 crores | Up 38.9% YoY from ₹14.1 crores; reflects full inventory availability and higher occupancies |
| F&B Revenue (Hotels) | ₹11.8 crores | Up 15.1% YoY from ₹10.3 crores; growth constrained as convention center offline since early April for Phase II upgrade |
| MEA RevPAR | ₹12,519 | Up 21.1% YoY; ADR up 7.5% to ₹13,342, occupancy improved to 94% from 83% |
| Total Debt (Consolidated) | ₹259 crores | Net debt ₹220 crores; standalone gross debt ₹220 crores, net ₹180 crores; blended interest rate 8.7%; annual repayment ~₹39-40 crores |
| CWIP (Consolidated) | ₹8 crores | Represents remaining Phase II capital work; most Phase I assets already capitalized |
Geographic & Segment Commentary
Marriott Hotel & Convention Center: Occupancy improved to 72.04% from 59.96% with RevPAR up 5.71% to ₹4,457. Convention center offline since April for Phase II renovation (until December), temporarily constraining banqueting capacity and ADR. F&B growth of 15.1% reflects this constraint. Management targets ₹10 crores revenue displacement from the renovation, but expects to beat prior year quarterly numbers each quarter despite the outage.
Courtyard by Marriott: Phase I renovation completed, enabling full 168-key availability. Occupancy surged to 83.65% from 38.31%, RevPAR nearly doubled to ₹5,006. ADR at ₹5,985, with renovated rooms commanding 30% premium (₹9,000 vs ~₹6,700 average). Combined Courtyard revenue expected to exceed ₹50 crores in FY27 vs ~₹30 crores pre-renovation calendar year, a ~60% jump.
Marriott Executive Apartments: Occupancy at 94% (up from 83%), ADR up 7.5% to ₹13,342, RevPAR up 21.1% to ₹12,519. Room revenue ₹8.5 crores vs ₹7.1 crores; F&B ₹3.3 crores. International business mix varies from ~20% in Q1/Q2 to ~40% in peak season. Supply shortage in extended-stay segment supports further ADR push despite near-full occupancy.
Company-Specific & Strategic Commentary
Renovation Program: Three-phase transformation underway. Phase I (Courtyard) completed at ₹50 crores cost, delivering 56 additional rooms, spa, gym, rooftop bar, pool. Phase II (Marriott) underway since April, expected completion by December 2025 (Q3 FY27). Phase III will complete remaining Marriott renovation. Post-completion, management targets 40% EBITDA margin.
Greenfield Courtyard Madhapur: ~180-200 key property, total project cost ₹120-130 crores. Approvals pending with Telangana government under new tourism policy; construction expected Q4 FY27, operations targeted FY29-30. Management negotiated alternative Marriott fee structure based on GOP percentage rather than operational years.
Acquisition Strategy: Actively evaluating distressed and brownfield hospitality assets on weekly basis; all hospitality acquisitions will sit in Viceroy entity, not separate SPVs. Current market not offering distressed assets, so focused on strategic integration of running/brownfield assets. Rights issue of ₹107 crores (pending exchange approval, non-dilutive to promoter stake above 75%) earmarked for debt repayment and future expansion.
Marriott Relationship: Fee structure at 1-1.5% of total revenue and 6-7% of GOP; stabilized post first 5 years with no further uptick expected.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | Above 30% near-term; 40% long-term benchmark | Q1 at 26.3% (vs 19% prior year); management confident of crossing 30% as Q3/Q4 seasonality, convention center return, and MEA portfolio drive margins; 40% targeted once renovation complete |
| Courtyard Occupancy | 80-85% for FY27-FY28 | Maintain current levels while strategically managing business mix; convention center return enables higher-rated MICE/social business |
| Courtyard ADR | ₹6,800 upward to ₹8,500 in next 2 years; potentially ₹9,000-9,500 by FY28 | Limited supply in Hyderabad supports 10-12% industry ADR growth expectations; renovated rooms already commanding ~30% premium |
| Phase II Completion | Q3 FY27 (December) | Convention center and Marriott rooms back in service; EBITDA displacement of ~₹10 crores budgeted for FY27 |
| Greenfield Courtyard | Construction Q4 FY27; operations FY29-30 | Approvals expected during current year; design ready; ₹120-130 crores total project cost |
| Q2 FY27 | Strong quarter expected | Bookings robust; management expects to beat prior year quarter numbers despite ongoing renovation |
Risks & Constraints
| Risk | Context |
|---|---|
| ADR Pressure | Combined ADR down 12.2% YoY to ₹6,107 due to full inventory availability and convention center outage; geopolitical situation (war) reducing foreign demand. Management mitigating by trading occupancy for rate and targeting ADR recovery post-renovation. |
| Renovation Displacement | Phase II renovation causing ~₹10 crores EBITDA displacement through convention center and room outage until December. Management budgeted this impact and expects to offset through higher occupancies and other business segments. |
| Approval Delays | Greenfield Courtyard approvals delayed by new Telangana tourism policy; construction now expected Q4 FY27, operations FY29-30. Any further policy or regulatory delays could push timeline. |
| Elevated Leverage | Debt increased from near-zero to ₹259 crores consolidated (net ₹220 crores) for MEA acquisition; annual repayment ~₹39-40 crores, blended rate 8.7%. Debt-equity ratio at ~1x, headroom ~₹100 crores for further borrowing. |
| Fee Elimination | Consolidation adjustment eliminates intercompany rent between parent and SLN Terminus subsidiary, creating gap between standalone and consolidated revenue figures; investors may find reconciliation confusing. |
Q&A Highlights
ADR Decline & Recovery Trajectory
Question: Combined ADR down 12.15% while occupancy up 42%; what's the trend going forward? (Animesh Jain)
Answer: Last year's higher ADR reflected limited inventory from renovation; now with full inventory back and convention center offline, rate dipped. Once convention center returns, groups/social functions drive ADR up. Q2/Q3 seasonality historically yields higher ADR. (Pradyumna Kodali)
Question: What are FY27-28 occupancy and ADR targets for Courtyard? (Madhav Agarwal)
Answer: Targeting 80-85% occupancy maintained through FY28; ADR expected to rise from ~₹6,800 to ₹8,500 over next two years, potentially reaching ₹9,000-9,500 by FY28 given limited city supply and 10-12% industry ADR growth forecast for Hyderabad. (Pradyumna Kodali)
Renovation Impact & Displacement
Question: How much EBITDA displacement expected from Phase II in FY27? (Animesh Jain)
Answer: Approximately ₹10 crores displacement from convention center and associated room business. Company repositioning strategy to shift from low-paying corporate (airlines, army) to higher-rated retail/groups post-renovation. (Pradyumna Kodali)
Question: Are you forgoing wedding/MICE season with convention center down? (Santosh Shetty)
Answer: Nothing permanently lost; renovation was budgeted and planned from April-December. Even without convention center, Q1 numbers beat prior year. With it back online, expect significantly more business. (Anirudh Reddy Konda Reddy)
Greenfield & Approvals
- Question: Status of Courtyard Madhapur approvals and construction timeline? (Santosh Shetty; Prashant Kshirsagar)
- Answer: Approvals pending under new Telangana tourism policy; tourism department has written to MAUD. Expect approvals this year, construction starting Q4 FY27, operational in FY29-30. Total project cost ₹120-130 crores for ~180-200 keys. (Anirudh Reddy Konda Reddy)
Executive Apartments Strategy
- Question: With 94% occupancy, can you push ADR further? (Madhav Agarwal)
- Answer: Yes, significant supply shortage exists in extended-stay segment; competitors renovating but inventory far from coming online. ADR currently ₹13,342, still has room to push while maintaining occupancy. (Anirudh Reddy Konda Reddy)
Debt & Leverage
Question: What is gross/ net debt and repayment profile? (Prashant Kshirsagar; Pahal Sharma)
Answer: Standalone gross debt ₹220 crores, net ₹180 crores; consolidated gross ₹259 crores, net ₹220 crores. Blended interest rate 8.7% (range 8.75-9%). Monthly repayments ₹3.25 crores (~₹39-40 crores annually), long-term debt with ~12-year tenure. Debt-equity ratio ~1x, allowing ~₹100 crores additional headroom. (Puli Venkata Krishna Reddy; Anirudh Reddy Konda Reddy)
Question: Was the ₹200 crore MEA acquisition funded via debt? What's the interest cost? (Vivek Gupta)
Answer: Company was near-zero levered pre-acquisition; raised ₹200 crores debt at ~8.7% interest to finance the deal. MEA is PAT accretive after interest and depreciation. (Anirudh Reddy Konda Reddy)
EBITDA Margin Trajectory
- Question: Q1 margin at 26.3% vs 31.4% in Q4; is 30% still achievable for FY27? (Samaira Gavanshi)
- Answer: Yes, 30% is target this year. Q1/Q2 are seasonally weaker; Q3/Q4 historically stronger with higher ADRs. MEA portfolio with high room revenue contribution at high ADRs supports margin expansion. Convention center return will further improve EBITDA. (Pradyumna Kodali; Anirudh Reddy Konda Reddy)
Marriott Structure & Fees
- Question: What is the fee arrangement with Marriott? (Madhav Agarwal)
- Answer: Marriott takes 1-1.5% of total revenue and 6-7% of GOP. Fees stabilized post first 5 years (all properties beyond this mark). For greenfield, negotiated GOP-percentage-based matrix to further align interests. (Anirudh Reddy Konda Reddy; Pradyumna Kodali)
Key Takeaway
Viceroy Hotels delivered strong Q1 FY27 results with revenue up 77% YoY to ₹44.9 crores and EBITDA up 144% to ₹11.8 crores (26.3% margin), though PAT of ₹1.4 crores reflects higher depreciation and finance costs from the Marriott Executive Apartments acquisition and Phase I capitalization. Operational metrics improved sharply: combined occupancy rose to 76.25% from 53.65%, and RevPAR grew 24.9% to ₹4,657, with executive apartments delivering 94% occupancy and ₹12,519 RevPAR (up 21.1%). The company is executing a three-phase renovation program — Phase I (Courtyard) complete, Phase II (Marriott convention center) ongoing until December — targeting EBITDA margins above 30% near-term and 40% long-term, supported by ADR recovery, MEA contribution, and convention center return. Management guided Courtyard ADR toward ₹8,500-9,500 by FY28 with 80-85% occupancy maintained. Key watch points include the ₹10 crores Phase II displacement, approval timeline for the ₹120-130 crores greenfield Courtyard (operations FY29-30), ADR pressure from geopolitical factors, and elevated leverage (₹220 crores net consolidated) with a rights issue pending for debt repayment. Management remains confident of beating prior year quarterly results throughout the renovation period, with Hyderabad's 10-12% industry ADR growth outlook supporting the trajectory.