Chalet Hotels (CHALET IN) – Q4FY26 Result Update – Occupancy dips due to transitory issues – BUY
Published on 16 May 2026
Excluding residential business, CHALET IN’s operating performance was better than our estimates with EBITDA margin of 48.7% (PLe 45.0%) aided by strong traction in leasing income. RevPAR declined 3.3% YoY to INR10,544 as occupancy dipped 770bps YoY to 68.2% amid challenges relating to conflict in West Asia, ongoing construction work at Powai and renovation at Four Points Sheraton, Vashi. Led by stabilization in these transitory issues, we expect RevPAR CAGR of 11.2% over FY26-FY28E. Further, partial operationalization of Taj, Delhi by 4QFY27E is likely to drive 17.0% revenue CAGR in hospitality business over the next 2 years. The long-term pipeline also appears strong with acquisition of a hotel in Udaipur with 144 keys and greenfield expansion in Hyderabad consisting of 330 keys. Annuity business is also likely to witness addition of 0.9mn sq ft of leasing area by 4QFY27E. Given the project pipeline, we expect sales/EBITDA CAGR of 18%/21% over FY26-FY28E. We broadly retain our estimates and maintain BUY with a TP of INR994 as we value the hotel business at 18x FY28E EBITDA (earlier 20x), annuity portfolio at a cap rate of 8.5% and the residential project at NAV of INR17 per share.
