Suba Hotels has entered into term sheets for management agreements for three hotel properties in Bengaluru, Madhya Pradesh, and Hyderabad, expanding its asset-light portfolio by 173 guest rooms. The agreements, disclosed on July 30, 2026, allow the company to operate and market the properties under its Click Hotel and Comfort Inn brands without capital expenditure on real estate. This expansion strengthens its presence in key business and leisure destinations across India.

The disclosures were made pursuant to Regulation 30(6) read with Para A of Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. None of the transactions are related party transactions, nor do promoters or group companies hold any interest in the entities involved.

Deal Details

The term sheets cover two operational hotels and one proposed property. The company will manage these assets under its established brand standards and operating frameworks.

Property Specifications

The Bengaluru Airport property comprises 54 keys across six floors, including one restaurant and basement parking. It is located at 109/6, International Airport Road, Yelahanka Taluk. The Madhya Pradesh property in Dhooma features 60 keys across four floors, two restaurants, approximately 5,000 sq. ft. of covered banquet space, and a 60,000 sq. ft. function lawn. It is situated on Old NH-07.

The Hyderabad property is a proposed hotel comprising 59 keys across seven floors including a terrace. It will include one restaurant, one banquet hall, one board room, and space for a gymnasium and spa. Located in Shamshabad, it is positioned near the airport catchment area.

Strategic Rationale

Management stated that these agreements align with the company’s strategic objective of expanding its asset-light management portfolio. The deals are designed to support long-term revenue visibility and brand expansion in growing hospitality markets. Consideration for all three agreements includes management fees, with the Hyderabad deal also potentially involving revenue share, as mutually agreed between the parties.

Suba Hotels Limited reported a 44% increase in revenue from operations to ₹114 crore for the financial year 2026, with profit after tax growing 19% to ₹18 crore. The company navigated regulatory changes, including GST 2.0, and geopolitical challenges to achieve these results. Management highlighted the successful execution of opening seven hotels in a single day across various operating models, including leased, owned, and revenue share.

Financial Performance

The half-year (H2) performance was particularly strong, with revenue reaching ₹70.5 crore, a 42% increase compared to the previous year. EBITDA for the year stood at ₹26.8 crore, a 13% rise, though margins contracted to 23.1% from 30% in the prior year. The contraction was attributed to the new GST regime, which reduced rates to 5% without input tax credit, impacting EBITDA by approximately ₹3.5 crore in H2. Additionally, planned renovations at Suba Star Ahmedabad and GenX Mirzapur temporarily affected operations.

Operational Highlights

Occupancy for the year improved to 68.5% from 65.2%, while the average room rate (ARR) increased to ₹3,850 from ₹3,620. Revenue per available room (RevPAR) grew by 11.7% year-on-year to ₹2,637. The company reduced its dependency on online travel agencies (OTAs) to 35% from 38%, while corporate bookings rose to 35%.

Future Outlook

Looking ahead to FY27, Suba Hotels plans to open 22 hotels, adding approximately 1,100 keys to its portfolio. The development pipeline has expanded to 1,759 keys, with a focus on Tier 2 and Tier 3 cities and pilgrimage destinations. The company aims to achieve 10,000 keys by 2030 and targets a revenue CAGR of 30-35% over the next few years. Management expressed optimism that margins would stabilize and improve as renovated properties return to full capacity and new hotels contribute to economies of scale.