CHALET - Chalet Hotels

📊 NSE: CHALET 🏢 Hotels 📅 Last Updated: 12/13/2025 20:51

💰 Financial Performance

Revenue Growth by Segment

Total Income grew 22% YoY to INR 17,541.22 million. Hospitality segment revenue increased 18% to INR 15,208.47 million, driven by a 20% rise in Room Revenue (INR 9,626.17 million) and 13% in F&B (INR 4,545.60 million). Rental & Annuity segment grew 59% to INR 1,969.78 million, with Lease Rent up 54% to INR 1,675.26 million.

Geographic Revenue Split

Mumbai Metropolitan Region (MMR) contributes 55% of revenue, followed by Hyderabad at 21%, Bengaluru at 13%, Pune/Khandala at 5%, NCR at 5%, and Uttarakhand at 1%.

Profitability Margins

Operating Profit Margin improved to 34% from 32% (+2 pp). Net Profit Margin declined to 8% from 19% (-11 pp) primarily due to a one-time deferred tax reversal of INR 2,021.72 million. Return on Net Worth dropped to 5% from 15% (-10 pp).

EBITDA Margin

Consolidated EBITDA grew 28% YoY to INR 7,721.89 million with a margin of 44% (up from 42% in FY24). Standalone EBITDA margin reached 45% (INR 7,642.48 million).

Capital Expenditure

FY25 capital expenditure was INR 610.90 Cr for ongoing projects, plus INR 530 Cr for the acquisition of The Westin Resort & Spa, Himalayas. Planned capex is INR 2,500-2,600 Cr over FY2026-FY2028.

Credit Rating & Borrowing

Assigned [ICRA] AA- (Stable) for NCDs and Term Loans, and [ICRA] A1+ for short-term limits. CRISIL reaffirmed 'CRISIL AA-/Stable/A1+'. Finance costs decreased 19% to INR 1,590.82 million following debt prepayment from INR 1,000 Cr QIP proceeds.

⚙️ Operational Drivers

Raw Materials

Food & Beverage supplies (representing 26% of total expenses), hotel consumables, and maintenance utilities.

Import Sources

Primarily sourced from domestic markets in Maharashtra, Karnataka, and Telangana to support regional hotel clusters.

Capacity Expansion

Current capacity is 3,359 keys across 11 luxury hotels as of October 2025. CRE segment has 1.8 million sq. ft. operational with 0.9 million sq. ft. under development in Powai, Mumbai.

Raw Material Costs

Total expenses increased 18% to INR 9,819.33 million. Procurement strategies focus on operational efficiency and cost-optimization measures which helped sustain a 40.6% operating margin in H1 FY2026.

Manufacturing Efficiency

Overall Occupancy remained stable at 73%. Average Daily Rate (ADR) increased 13% to INR 12,094, and RevPAR grew 13% to INR 8,781.

📈 Strategic Growth

Expected Growth Rate

22%

Growth Strategy

Growth is driven by organic inventory additions, strategic acquisitions (e.g., Westin Himalayas), and leasing of newly developed CRE assets (2.4 million sq. ft. total pipeline). The residential segment in Koramangala is expected to generate INR 300-400 Cr in cash flows over the next 2-3 years.

Products & Services

Luxury hotel room stays, Food & Beverage services, Commercial Real Estate (CRE) leasing, and Residential apartment sales.

Brand Portfolio

The Westin, Marriott Executive Apartments, Four Points by Sheraton, Novotel, and Lakeside Chalet.

New Products/Services

Residential segment recognized INR 721.3 Cr revenue in H1 FY2026 from 150 flats; CRE segment grew 89.9% to INR 147.0 Cr in H1 FY2026 due to new leasing.

Market Expansion

Expansion into new geographies including Uttarakhand (Westin Himalayas) and Goa. Ongoing development of 0.9 million sq. ft. CRE in Powai.

Market Share & Ranking

Established position in the luxury hospitality segment across 7 major Indian cities; dominant 55% revenue concentration in MMR.

Strategic Alliances

Long-term management contracts with Marriott International and Accor.

🌍 External Factors

Industry Trends

Hospitality industry is growing with a favorable demand-supply gap; shift towards integrated developments (Hotel + CRE) to diversify revenue streams.

Competitive Landscape

Competes with other luxury hotel chains in major metros; market dynamics are currently favorable due to rising demand and limited new supply.

Competitive Moat

Moat built on prime land parcels in high-barrier-to-entry urban markets and long-term partnerships with global brands like Marriott, ensuring high ADR and RevPAR sustainability.

Macro Economic Sensitivity

Highly sensitive to GDP growth and corporate travel cycles; inflationary pressures impact operating costs and consumer discretionary spending.

Consumer Behavior

Sharp rebound in both domestic leisure and international business travel post-pandemic.

Geopolitical Risks

Recent tensions with neighbors and active conflict with Pakistan are cited as significant risks to near-term business stability.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI Listing Regulations and SEBI (Share Based Employee Benefits) for ESOP allotments.

Taxation Policy Impact

Impacted by Finance Act 2024 which withdrew indexation benefits, leading to a one-time deferred tax asset reversal of INR 2,021.72 million in Q2 FY25.