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.

Suba Hotels Limited reported its highest-ever total revenue of ₹115.89 crore for the financial year ended March 31, 2026, a 45% increase from ₹79.98 crore in FY25. The company expanded its footprint to over 101 operational hotels across 50+ cities, strengthening its position as the 9th largest hotel chain in India. Net profit for the year rose 19% to ₹18.01 crore, compared to ₹15.15 crore in the previous year, while EBITDA grew 13% to ₹26.82 crore.

The Board of Directors approved the audited standalone and consolidated financial results for the half year and full year ended March 31, 2026. The company noted that margins were impacted by changes in the GST framework introduced during the year, specifically a reduction in the GST rate on specified hotel services from 12% to 5% effective September 22, 2025. This regulatory change resulted in the loss of Input Tax Credit benefits on certain operating expenses, increasing the cost base despite strong underlying business performance.

Consolidated Financial Performance

On a consolidated basis, the company delivered strong growth across key metrics in the second half of the fiscal year. Total revenue in H2 FY26 reached ₹71.87 crore, a 63% increase over H1 FY26 and a 43% rise compared to H2 FY25. Profit after tax (PAT) for H2 FY26 stood at ₹12.77 crore, surging 144% half-over-half and 8% year-over-year.

Strategic Expansion

Management attributed the record revenue to network expansion, improved business volumes, and continued traction across its brands and operating formats. Suba Hotels operates across five hospitality business models: Management Contracts, Revenue Sharing, Franchising, Asset Ownership, and Hybrid Structures. The company stated it is the only listed hospitality company in India with a presence across all five operating models, providing a competitive advantage to accelerate expansion.

In 2022, Suba became the exclusive master franchisee of Choice Hotels in India, bringing brands such as Comfort, Clarion, and Quality under its umbrella. The company's growth strategy focuses on asset-light models, improving operating efficiencies, and strengthening presence in high-growth markets to sustain long-term value creation.

Investor Presentation Update

Subsequent to the results, Suba Hotels filed an investor presentation on June 02, 2026, confirming the financial figures and providing additional operational metrics. The presentation highlighted a Return on Equity (ROE) of 13.04% and a Return on Capital Employed (ROCE) of 12.81% for FY26. The company reported a Debt to Equity ratio of 0.37x.

As of May 31, 2026, the company's portfolio comprised 101 operational hotels with 4,612 keys. The pipeline includes 32 hotels adding 1,759 rooms. The presentation emphasized the company's diversified presence across upscale, midscale, and economy segments, with approximately 65% of its presence in Tier 2 and Tier 3 cities.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE0RYR01018/05d29a9493b840f0.pdf