Chalet Hotels (CHALET IN) – Q3FY26 Result Update – RevPAR growth remains strong – BUY
Published on 03 Feb 2026
In 3QFY26, CHALET IN recognized residential revenues of Rs166mn with EBITDA margin of 24.0% and consequently reported results are not comparable on YoY basis or with our estimates. Excluding residential business, CHALET IN’s operating performance was better than our estimates with EBITDA margin of 45.9% (PLe 44.6%) aided by 11.8% growth in RevPAR and strong traction in leasing income. While commercialization of Taj, Delhi has been delayed; addition of keys at Bangalore (129-keys added in 1HFY26) and Khandala (147 keys fully operational from mid-Nov onwards) will support growth in the interim. In addition, receipt of environmental clearance at Hyatt, Airoli paves way for another greenfield addition in foreseeable future. Annuity business is also likely to witness addition of 0.9mn sq ft of area by 4QFY27E (5-slabs already casted). Overall, the growth funnel remains strong with a potential to add ~150 keys in the near term, if the Udaipur acquisition goes through after due diligence. Given the strong project pipeline, we expect sales/EBITDA CAGR of 18%/22% over FY25-FY28E. We broadly retain our estimates and maintain BUY with a TP of Rs1,089 as we value the hotel business at 20x FY28E EBITDA (earlier 24x; multiple re-aligned as we roll-forward), annuity portfolio at a cap rate of 8.5% and the residential project at NAV of Rs17 per share.
