Chalet Hotels (CHALET IN) – Q1FY27 Result Update – Transient headwinds, structural growth intact – BUY
Published on 30 Jul 2026
Excluding residential business, CHALET IN’s operating performance was better than our estimates with EBITDA margin of 46.5% (PLe 42.7%) aided by better cost control and strong traction in leasing income. Occupancy dipped 120bps YoY to 64.8% amid flat international demand, ongoing construction work at Powai and renovation at Four Points Sheraton, Navi Mumbai. Nonetheless, as noisy work at Powai is nearing completion and renovation at Vashi is complete, we expect occupancy levels to improve translating into RevPAR CAGR of 11.4% over FY26-FY28E. Further, partial operationalization of Taj, Delhi by 4QFY27E is likely to drive 16.8% revenue CAGR in hospitality business over the next 2 years. Annuity business is also likely to witness addition of 0.9mn sq ft of leasing area by 4QFY27E. Given addition of two marquee assets (Taj, Delhi and Tower-2, Powai), we expect sales/EBITDA CAGR of 18%/21% over FY26-FY28E. We broadly retain our estimates and maintain BUY with a TP of INR991 as we value the hotel business at 18x FY28E EBITDA (no change in target multiple), annuity portfolio at a cap rate of 8.5% and the residential project at NAV of INR17 per share.
