Chalet Hotels Limited has made a strategic move into the renewable energy sector by acquiring a 26% equity stake in Pro-zeal Green Power Fourteen Private Limited, a Special Purpose Vehicle (SPV) for solar power generation. This acquisition, valued at Rs 26,000, marks Chalet Hotels' entry into a captive solar power arrangement in Maharashtra.

Key Details of the Acquisition

Project Scope and Objectives

The primary objective of this acquisition is to set up a solar power plant through the SPV. Chalet Hotels aims to participate in a captive arrangement for availing solar power, potentially reducing its reliance on conventional energy sources and moving towards more sustainable operations.

Regulatory Compliance

As part of the acquisition process, Chalet Hotels has entered into:

1. A Share Subscription and Shareholders Agreement with Pro-zeal Green Power Fourteen Private Limited and Prozeal Green Power Private Limited
2. A Power Purchase Agreement with Pro-zeal Green Power Fourteen Private Limited

These agreements are in compliance with Regulation 30 and Regulation 51 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Impact and Future Outlook

This move by Chalet Hotels reflects a growing trend in the hospitality industry towards adopting renewable energy solutions. By investing in solar power generation, the company may aim to:

• Reduce its carbon footprint
• Lower long-term energy costs
• Enhance its sustainability profile

The completion of the solar power plant, expected within 8 months of the agreement signing, will be a key milestone for the company's renewable energy initiatives.

Chalet Hotels , a prominent player in the hospitality sector, is poised for a robust performance in the second half of the financial year, according to Executive Director Shwetank Singh. The company's optimism stems from the upcoming wedding season and recovering travel demand, particularly in the international segment.

Seasonal Business Distribution

Traditionally, Chalet Hotels experiences an uneven distribution of business throughout the year:

This skew towards the latter half of the year underpins the company's positive outlook for the coming months.

Key Growth Drivers

1. Wedding Season: The company expects to benefit from deferred auspicious wedding dates, which are likely to boost bookings.
2. Peak Performance Months: November and February are anticipated to be the highest-performing months, with strong bookings already in place.
3. International Travel Recovery: The resumption of direct flights and the return of expat movement to pre-pandemic levels are contributing significantly to the company's performance.

International Travel Segment Benefits

The recovery in international travel is particularly advantageous for Chalet Hotels due to:

• Higher average daily rates
• Increased food and beverage consumption

Q2 Performance and Challenges

Despite the positive outlook, Chalet Hotels faced some challenges in the recent quarter:

• 7% year-on-year decline in portfolio occupancy
• Factors affecting performance:
  • Fewer auspicious wedding dates
  • Extended weekends impacting resort bookings

Financial Position

Chalet Hotels maintains a strong financial position:

Singh highlighted that the company's debt servicing is covered by lease rentals, which allows the hospitality cash flows to be directed towards growth investments.

Conclusion

As Chalet Hotels navigates through the evolving hospitality landscape, the company appears well-positioned to capitalize on the recovering travel industry and seasonal demand. With a strategic focus on high-yield international travelers and a robust financial structure, the company is optimistic about its performance in the coming months. Investors and industry observers will be keenly watching how these anticipated trends materialize and impact the company's overall financial health.