Chalet Hotels Delivers Robust Q4 on RevPAR Surge, Margin Gains; PL Capital Maintains ‘BUY’

Mumbai | May 14, 2025 – Prabhudas Lilladher has reaffirmed its ‘Buy’ rating on Chalet Hotels Ltd after the company delivered a strong set of Q4FY25 results, supported by RevPAR growth, operating leverage, and a positive demand environment. The brokerage has raised the target price to ₹1,130, citing strong visibility on earnings and steady expansion in both the hospitality and annuity segments.

Chalet reported a 24.8% YoY increase in consolidated revenue to ₹5,22 crores with hospitality revenue up 20.2% YoY and annuity income soaring 75.1% YoY. EBITDA rose 32% YoY to ₹2,41.4 crores, with margin expansion of 260 bps to 46.3%, exceeding PL’s estimate. PAT surged 50.2% YoY to ₹1,23.8 crores, reflecting improved operational performance and cost optimization.

Key Financials at a Glance

Analyst Insights & Concall Highlights

• Chalet plans to add ~450 keys in Khandala and Delhi, with long-term expansions in Goa, Airoli, and Kerala. Total key count is expected to cross 4,500 in 4–5 years.
• Annuity segment is gaining traction, with occupancy projected to reach ~90% in 2–3 quarters.
• Despite recent geopolitical developments, including Middle East tensions, Chalet noted that May-25 revenue is up 12% YoY, showing resilience in demand.
• The Bambolim (Goa) project is expected to complete in ~3 years, with higher capex per key than Chalet’s Varca property.
• Chalet has passed an enabling resolution to raise ₹10 billion via NCDs and CPs, ensuring liquidity for expansion plans.
• The Koramangala residential project is nearly complete with 92% of flats sold and ₹4.1 billion in receivables.
• Chalet’s cost of debt has marginally reduced to 8.35% in April 2025, with further downward revisions expected in May.

Valuation & Outlook

PL values Chalet’s hotel business at 24x FY27E EV/EBITDA, annuity assets at an 8.5% cap rate, and residential assets at NAV of ₹29/share. With strong momentum in average room rates (ARRs), high-margin annuity income, and efficient cost controls, FY25–FY27E EBITDA and PAT are projected to grow at 23% and 32% CAGR, respectively.

Trading at ₹875, Chalet offers an upside to the revised TP of ₹1,130. PL maintains its ‘BUY’ rating, noting visibility of earnings, improving RoCE, and strategic expansion initiatives.

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