Chalet Hotels (CHALET IN) – Q2FY27 Result Update – Inventory addition to drive growth in FY28E – BUY
Published on 05 Nov 2026
Excluding residential business, CHALET IN’s operating performance was broadly in-line with EBITDA margin of 44.3% (PLe 44.4%) aided by better cost control and strong traction in leasing income. RevPAR growth was modest at 7.2% given occupancy dipped 240bps YoY to 64.2% as MMR region proved to be a drag. CHALET IN has been facing occupancy-led challenges in MMR region since the last 2 quarters amid flat international demand, ongoing construction work at Powai and renovation/rebranding at Four Points Sheraton (FPS), Navi Mumbai. Despite these challenges, ARR in MMR region was up 8%/13% in 1Q/2Q indicating recovery in the RevPAR growth could be swift once occupancy bounces. As noisy work at Powai is largely over and FPS has been rebranded as ATHIVA, we expect occupancy levels to improve in 2HFY27E. Aided by recovery in MMR region and addition of two marquee assets (Taj, Delhi and Tower-2, Powai) by next year, we expect sales/EBITDA CAGR of 17%/19% over FY26-FY29E. We maintain BUY with a TP of INR1,055 as we value the hotel business at 18x Sep-28E 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.
