Samhi Hotels , a leading player in the Indian hospitality sector, is setting its sights on ambitious growth through a multi-faceted strategy that combines asset-light expansion, strategic partnerships, and portfolio optimization. The company's approach aims to capitalize on the burgeoning travel and tourism sector in India while maintaining financial prudence.

Expansion Strategy and Market Focus

Samhi Hotels is strengthening its presence in key business hubs, with a particular focus on Bengaluru, Hyderabad, and Pune. These cities, known for their robust commercial and IT sectors, align well with Samhi's target market of business travelers and urban tourists.

The company's expansion plans are notably asset-light, emphasizing new management contracts and brand partnerships. This approach allows Samhi to grow its portfolio without the heavy capital expenditure typically associated with property acquisitions or new constructions.

Partnership with GIC

A significant boost to Samhi's growth strategy comes from its partnership with GIC, Singapore's sovereign wealth fund. This collaboration involves:

• A commitment from GIC to invest approximately ₹7,500.00 million, with about ₹5,800.00 million already received.
• GIC acquiring a 35% stake in three of Samhi's subsidiaries, which include four operating hotels and one under development.

This partnership not only provides Samhi with substantial capital for expansion but also brings in GIC's global expertise and network, potentially opening doors to new opportunities and markets.

Portfolio Optimization and Rebranding

Samhi Hotels is actively working on optimizing its existing portfolio:

• Rebranding initiatives are underway, including the transformation of properties into Westin and Tribute Portfolio brands in Bengaluru.
• The company is renovating and rebranding a Four Points property in Pune to a Courtyard by Marriott.
• A new W Hotel is under development in Hyderabad's HITEC City, targeting the luxury segment in one of India's largest commercial districts.

Financial and Operational Targets

The company has set ambitious financial goals:

• Targeting a portfolio Return on Capital Employed (ROCE) of 15%+.
• Aiming to increase the revenue contribution from leased assets to over 20%, enhancing capital efficiency.
• Projecting consolidated income to grow from approximately ₹11,500.00 million to ₹15,300.00 million, with EBITDA margins expanding from 39% to 41%.

Market Outlook and Opportunities

Samhi Hotels' expansion strategy is underpinned by positive market trends:

• India's travel and tourism sector is anticipated to grow at about twice the rate of global economic growth between 2022 and 2032.
• The company is well-positioned to benefit from the increasing demand for quality accommodations in India's growing business centers.

Challenges and Considerations

While Samhi Hotels' growth strategy appears robust, investors should consider potential challenges:

• The cyclical nature of the hospitality industry and its sensitivity to economic fluctuations.
• Execution risks associated with rapid expansion and rebranding efforts.
• Potential market saturation in key business hubs as other hotel chains also expand.

Samhi Hotels' focus on asset-light expansion, strategic partnerships, and portfolio optimization positions it well to capture a significant share of India's growing hospitality market. The company's targeted approach to key business hubs and its partnership with GIC provide a strong foundation for its ambitious growth plans. However, successful execution of these strategies will be crucial in achieving the projected financial targets and maintaining a competitive edge in the dynamic Indian hospitality sector.

Samhi Hotels Limited, a leading player in the Indian hospitality sector, has reported robust financial results for Q2 FY26, accompanied by significant expansion plans that mark a transformative phase for the company.

Strong Financial Performance

For Q2 FY26, SAMHI Hotels demonstrated solid growth across key financial metrics:

The company's profit after tax stood at INR 99.00 crores, which includes a reversal of the Navi Mumbai land impairment of INR 57.00 crores.

Improved Financial Position

SAMHI Hotels has significantly strengthened its balance sheet:

• Net debt to EBITDA reduced to 2.9x
• Average interest cost decreased to 8.50%
• Credit rating upgraded to A+ with a stable outlook

Major Expansion Initiatives

The company announced two transformative growth projects:

1. Navi Mumbai Dual-Branded Hotel Development:

   • Landmark project near the upcoming Navi Mumbai International Airport
   • Dual-branded hotel under Westin and Fairfield by Marriott
   • Phase 1: 400 rooms (expandable to 700 rooms)
   • Investment: INR 650.00 crores for Phase 1
   • Estimated EBITDA potential: INR 180.00-185.00 crores (for 700 rooms)

2. Hyderabad Financial District Hotel:

   • 260-room mid-scale hotel
   • Long-term variable lease structure
   • Third property in the precinct alongside existing Sheraton and Fairfield by Marriott

Strategic Importance of Expansions

The Navi Mumbai project marks SAMHI's entry into the Mumbai metropolitan region, completing its presence across India's five largest office markets. The Hyderabad project strengthens the company's position in one of India's fastest-growing office corridors.

Management Commentary

Ashish Jakhanwala, Chairman, MD, and CEO of SAMHI Hotels, stated, "Q2 FY26 represents a clear inflection point for SAMHI. We are delivering consistent operating performance, maintaining financial discipline, and executing a transformational growth pipeline that will define SAMHI's next decade."

Future Outlook

Management expects H2 FY26 performance to significantly exceed H1 results and maintains revenue growth guidance of 9-11% CAGR for same-store hotels over the next 3-5 years.

SAMHI Hotels is well-positioned to leverage its strengthened balance sheet and robust free cash flows to fund its expansion plans, setting the stage for sustained growth in the coming years.

Conclusion

SAMHI Hotels' strong Q2 FY26 performance, coupled with its strategic expansion plans in key markets, underscores the company's robust growth trajectory and its commitment to capitalizing on the evolving dynamics of India's hospitality sector.