Apeejay Surrendra Park Hotels (PARKHOTE IN) – Q3FY26 Result Update – Operating leverage missing – BUY
Published on 07 Feb 2026
While PARKHOTE IN reported weak operating performance with EBITDA margin of 35.3% (PLe 37.4%); the miss at bottom-line level magnified due to higher-than-expected interest cost of Rs101mn (PLe Rs71mn) and lower-than-expected other income of Rs15mn (PLe Rs39mn). After acquiring Zillion Hotels, Juhu during 2QFY26, buy-out of Malabar House, Fort Kochi and Purity, Lake Vembanad in Dec’25 indicate inventory addition pipeline of near term is on track. However, completion timeline of Park, Pune and EM Bypass, Kolkata, has been delayed to early 2030. Additionally, there have also been delays in scaling Flurys (4 outlets added in 9MFY26). Given delays in project timelines, we cut our EV/EBITDA multiple for hotels business to 12.5x (earlier 15x) and EV/Sales multiple of Flurys business to 1.5x (earlier 3x). We broadly retain our estimates and expect sales CAGR of 18% over the next 3 years, with an EBITDA margin of 32.8%/33.7%/35.9% in FY26E/FY27E/FY28E respectively. We maintain BUY with SoTP based TP of Rs206 (earlier Rs240) and roll forward our valuation to FY28E.
