# 1. Financial Performance ## A. Key Figures * **Hospitality Revenue:** **₹380 Cr** (Q2 FY26) (+13% YoY) * **Consolidated Revenue:** **₹740 Cr** (+94% YoY) · **EBITDA: ₹310 Cr** (+98% YoY) (incl. ₹280 Cr residential recognition) * Core Revenue (ex-residential): ₹4.6 Cr (+20% YoY) · EBITDA: ₹2 Cr (+25% YoY) · Margin: 43.4% (+144 bps) * **Hospitality EBITDA:** **₹150 Cr** (Q2) (+10% YoY) · **H1: ₹312 Cr** (+15% YoY) ## B. Revenue Growth * **Robust Core Momentum:** Hospitality revenue growth fueled by **16% higher average room rates**, with commercial and hospitality segments delivering strong double-digit top-line and EBITDA expansion. * **Residential Recognition Boost:** Consolidated results significantly elevated by **₹280 Cr revenue** from 55 apartments handed over at Vivarea, Koramangala, driving outsized growth in revenue and EBITDA. * **Sustained Operating Leverage:** Ex-residential EBITDA growth outpaced revenue, reflecting margin expansion and operational efficiency gains despite cost pressures. ## C. EBITDA Margins * **Margin Resilience Amid Transitory Pressures:** Hospitality EBITDA margins declined slightly on reported basis but held **stable at 41% on a like-for-like basis**, with near-term dilution from ramp-up of **166 new rooms** and pre-opening cost absorption. * **Cost Inflation Managed:** Payroll and utility cost increases partially offset by scale, with margins expected to recover as new assets stabilize and occupancy improves. * **Confident Margin Outlook:** Management targets to maintain current EBITDA margins and absolute levels while growing in line with market, underpinned by asset-light expansion and pricing power. ## D. Balance Sheet * **Strengthened Credit Profile:** Successful **A1+ rated commercial paper issuance of ₹100 Cr** at **1% fixed rate**, coupled with **ICRA upgrade to AA- (stable)**, signals strong lender confidence and improved funding access. * **Deleveraging Progress:** Full repayment of **₹200 Cr promoter preference shares** and ICDs completed, reducing net debt to **₹2,090 Cr** and eliminating promoter-related liabilities. * **Funding Cost Efficiency:** Blended cost of debt now **212 bps above RBI repo rate**, with average cost of finance down **38 bps QoQ to 6.2%**, reflecting improved capital structure. --- # 2. Hospitality & RevPAR Trends ## A. Key Figures * **Hospitality Revenue:** **₹380 Cr** (+13% YoY) * **RevPAR:** **₹8,115** (+5% YoY) * **ADR:** **₹12,170** (+16% YoY) * **Like-for-Like Revenue:** +10% YoY * **Like-for-Like RevPAR:** +7% YoY * **Occupancy:** 67% (-7 pp YoY) ## B. ADR & Occupancy * **Short-Term Pressure, Segment Divergence:** Recent dip in occupancy in **Bangalore and Athiva** due to new property ramp-up; medium-term steady-state levels expected to differ meaningfully between business hotels and resorts. * **Market Strength Persists:** **Bangalore and Hyderabad** remain buoyant, with Hyderabad achieving **#1 position in its competition set**; pricing strategy in Aerocity to remain competitive while balancing ADR and occupancy. * **Demand Shifts in Mumbai Region:** **Sahar’s addition of ~1,000 rooms** has diverted compression-day demand from Powai, weighing on NCR occupancy despite broader market strength. ## C. RevPAR Performance * **Pricing Power Outpaces Volume:** Strong **double-digit ADR growth** drove RevPAR expansion despite softer occupancy, reflecting favorable rate positioning and resilient demand in key markets. * **Geographic Divergence in Rate Trends:** Mumbai delivered low single-digit ADR growth, while NCR saw ADR decline due to incremental supply absorption. ## D. Like-for-Like Growth * **Resilient Core Performance:** Like-for-like RevPAR grew **7%** on the back of **14% ADR growth**, partially offset by a **4 pp occupancy decline**, with softness attributed to weather and seasonality at Himalayas. * **Inventory Absorption Progressing:** **Pune** has successfully absorbed new supply, showing positive same-store momentum month-on-month and quarter-on-quarter. --- # 3. Commercial Real Estate ## A. Key Figures * Commercial Real Estate Revenue: ₹738 Mn (+76% YoY) * EBITDA: **₹607 Mn** (+88% YoY) · **82.3% EBITDA margin** * **Occupancy:** **77% leased** (18/23 Cr sq ft) · **79% committed** including LOI * Leasing Run Rate: **₹24.5 Cr/month** (Sep exit) · **₹30 Cr/month projected by Mar** ## B. Lease Rentals * **Strong Revenue Acceleration:** Commercial real estate delivered robust double-digit revenue and EBITDA growth, driven by rising lease rates and improved leasing momentum. * **Debt Service Self-Sufficiency:** Segment cash flows now fully cover total debt servicing, freeing up capacity for the hospitality business. * **Selective Leasing Strategy:** Marginal quarterly lease revenue reflects deliberate focus on **high-quality tenants** over speed, with key negotiations ongoing. * **Run-Rate Trajectory:** Monthly rental run rate is accelerating, with management projecting a **sixfold increase to ₹30 Cr/month by March**, signaling strong forward momentum. ## C. Occupancy Rates * **Portfolio Utilization Rising:** Leasing absorption is outpacing supply in core markets, supporting stable-to-upward rental trends and improving portfolio occupancy. * **Cignus 1 Fully Leasable by March:** The **9 Cr sq ft** at Cignus 1 is on track for full lease-up by March; Cignus 2 contribution expected only thereafter. ## D. Project Pipeline * **Cignus 2 on Schedule:** Second tower at Westin Powai Lake remains on track for completion in **Q4 FY27**, expanding future leasable capacity. --- # 4. Brand & Portfolio Expansion ## A. Key Figures * **Residential Sales:** **7 units** sold in Q2 (₹21.3k/sq.ft) · **₹130 Cr** cash collected · **314 of 321 units** sold as of Sep-25 ## B. Athiva Launch * **Strategic Brand Unveiling:** Launch of **Athiva Hotels & Resorts**, a premium lifestyle brand targeting affluent young travelers, marks Chalet’s shift to a **brand-led, integrated hospitality platform** rooted in joy, wellness, and sustainability. * **Portfolio Integration & Expansion:** Athiva consolidates previously standalone properties, with **6 hotels** (3 rebrands, 3 new builds) planned under the brand, including entries in **Goa** and **Trivandrum**, signaling scalable brand replication. * **Asset-Light Model Enabled:** Rebranding of The Resort, Madh Island under a **management contract** introduces an asset-light avenue for growth while maintaining group alignment. * **Strong External Validation:** First-ever **franchise awarded by IHCL to an external operator** underscores confidence in Chalet’s operational excellence. * **ESG Leadership Accelerated:** **Parivartan** initiative achieves **100% EV fleet and charging infrastructure** across assets by Sep-25—ahead of schedule—reinforcing sustainability commitment. ## C. Rebranding Progress * **Positive Early Traction:** Rebranding of *The Dukes Retreat* to **Athiva Resorts & Spa Khandala** met with **astounding guest feedback**, validating brand positioning and experience delivery. * **Selective Brand Strategy:** Rebranding to Athiva will be applied selectively; global brands like **Marriott and Accor** remain preferred where **international distribution** is critical. * **Marriott Upgrade in Pipeline:** Courtyard Marriott Aravali will rebrand to **Marriott Hotel & Resorts**, aiming to enhance performance through brand elevation. ## D. New Developments * **Near-Full Residential Monetization:** Residential project **98% sold** (314/321 units), with ₹130 Cr cash collected in Q2 alone, highlighting strong demand and efficient capital recycling. --- # 5. Project & Capacity Ramp-Up ## A. Key Figures * **Khandala Room Addition:** **147 rooms** added (Phase 2 complete) with **25 delayed keys** now operational * **Dukes Retreat Expansion:** Expanded from **80 to ~147 rooms**; previously operated at **70% occupancy**, **INR8,000 ARR** * **Capex Plan:** **INR 2,500 Cr** allocated over next two years for announced projects ## B. Room Additions * **Khandala Ramp-Up Complete:** Full operational impact of the 147-room expansion now underway, with first full sell-out achieved and incremental contribution visible from current quarter. * **Dukes Retreat Rebranded & Scaled:** Athiva’s Dukes Retreat nearly doubled in size, targeting improved performance through repositioning despite near-term occupancy dilution. * **Short-Term Occupancy Pressure:** Softness in Bangalore, Hyderabad, and Pune attributed to new room ramp-up, not ADR strategy; recovery expected as stabilization progresses. * **Airoli FSI Constraints:** No additional FSI available; room count and facilities capped at current plans. ## C. Construction Status * **Delhi Airport Hotel On Track:** Taj-branded property on schedule for H1 opening, featuring bottom-up fit-out enabling partial launch and faster revenue generation. * **Goa & Airoli Projects Advancing:** Varca construction to begin in Q4; Airoli approvals progressing post-Supreme Court order, with final clearances expected in 2–3 months. * **Major Repositioning Underway:** Vashi Sheraton renovation to complete by December, targeting upscale/upper-upscale segment; significant capex deployed to elevate brand positioning. * **Powai & Portfolio Refurbishment:** Phase 4 commercial completion expected next year, alongside planned refurbishments across existing hotels. * **Mixed-Use Design at Airoli:** Hotel to occupy upper floors (27+) of Mindspace-owned tower, optimizing views and integration within mixed-use asset. ## D. Stabilization Timeline * **Athiva Stabilization Pathway:** Occupancy expected to reach mid-60s range within 3–4 quarters, with high margins anticipated post-ramp. * **Capacity Growth Outpacing Near-Term Demand:** Despite ~80% room increase at Dukes, management targets return to prior 70% occupancy levels over time. * **Chalet Cash Flow Visibility:** Residual cash flows tied to three projects—first residential delivered, second expected FY27, commercial handover FY28; lease/sale decision pending. --- # 6. Demand & Booking Trends ## A. Leisure & MICE Demand * **Positive H2 Outlook:** Resort occupancies expected to recover with strong booking momentum in upcoming quarters, despite lack of specific H2 occupancy and ARR guidance. * **Seasonal Distortion:** October performance was subdued, but combined Diwali-Dussehra timing skewed results; November trends are critical for accurate assessment. * **Transient-Focused Model:** New hotel positioned for transient demand, not MICE or weddings, with potential for **>100% occupancy** on peak days due to high room turnover. * **Support for Small Groups:** Facility includes multiple boardrooms designed for senior leader meetings and small gatherings, aligning with transient strategy. ## B. Wedding & Social Events * **Wedding Demand Shifted:** Absence of auspicious dates in the last quarter dampened activity, with pent-up demand expected to reappear in subsequent quarters. ## C. Corporate Bookings * **Improving Corporate Momentum:** Corporate segment showing stronger booking trends, adding to confidence in robust H2 operating performance across business locations. --- # 7. Risks & Market Factors ## A. Key Figures * **Occupancy:** **390 bps dip** in MMR region (new supply impact) * **Rainfall:** **57% above average** in Himalayas (seasonal disruption) * **New Supply:** **~1,000 rooms** added near Marriott Sahar · **400 rooms** from Fairmont near JW Marriott Sahar ## B. New Supply Impact * **Strategic Pivot in MMR:** Management prioritizing **occupancy over ADR growth** amid elevated new supply, particularly on the airport belt, to defend market share. ## C. Seasonal Disruptions * **Temporary Headwinds in Resorts:** Resort portfolio weakness over two quarters attributed to **exceptional rainfall** and shifting auspicious travel dates, now expected to normalize. * **NCR Softness Isolated:** Occupancy and ADR dip in NCR linked to weather and event calendar shifts, primarily affecting Courtyard Marriott Aravali. ## D. Competition Pressure * **Resilient Sahar Performance:** Despite significant new supply (~1,000 rooms), Marriott Sahar **grew market share by 300 bps**, demonstrating pricing discipline and brand strength. * **Banquet Pricing Pressure:** Increased competition in Sahar has led to **pricing adjustments** in banquet and conference segments, though wedding season recovery is expected. * **JW Marriott Sahar Outperformance:** Property continues to gain traction even after the opening of **Fairmont’s 400-room** luxury offering nearby. --- # 8. Guidance & Outlook ## A. Key Figures * **H2 EBITDA (Prior Year):** **₹407–408 Cr** * Occupancy (H2 Expectation): mid-60s ## B. H2 Performance View * **Robust H2 Outlook:** Strong business on books across leisure, MICE, weddings, and inbound travel driving confidence in a material rebound in occupancy and EBITDA. * **Recovery Trajectory:** Occupancy dip attributed to recent **166-room expansion**, with stabilization expected within 1–2 quarters; performance in Mumbai and NCR remains resilient despite new supply. * **Event-Led Momentum:** Q3 expected to be highly buoyant due to carryover of postponed weddings, while festive, holiday, and corporate seasons underpin strong demand visibility. ## C. Dividend & Capital Return * **Shareholder Returns Initiated:** Maiden interim dividend declared, signaling strong cash flow generation and commitment to value creation. ## D. Strategic Priorities * **Double Engine Strategy in Motion:** Growth driven by core owned hotels and annuity-yielding commercial real estate, supporting disciplined expansion and selective M&A. * **Athiva as Growth Catalyst:** New owned brand rollout is value-accretive and a source of internal momentum; not aimed at large EBITDA uplift but enables future **asset-light potential** via management contracts. * **Margin Resilience:** Margin pressure from ramp-up is temporary; no structural concerns, with normalization expected as operations stabilize. * **Brand Partnerships to Continue:** Hotels in key international gateway cities will maintain alliances with global and domestic brands for scale and distribution.