Chalet Hotels Reports Strong Q3 FY26 Performance with 27% Revenue Growth
Chalet Hotels Limited reported strong Q3 FY26 results with consolidated revenue growing 27% to ₹5,892 million and EBITDA increasing 29% to ₹2,726 million. The hospitality business achieved 12% RevPAR growth driven by 16% ADR increases, while the commercial real estate segment grew revenue 29% with 83% portfolio occupancy. The company successfully launched Athiva Khandala and rebranded its Aravali property, demonstrating effective brand portfolio expansion.
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Chalet Hotels Limited demonstrated strong operational and financial performance in the third quarter of fiscal year 2026, showcasing the resilience of India's hospitality sector amid favorable industry dynamics. The company's results reflect both organic growth and strategic expansion initiatives across its diversified portfolio.
Financial Performance Highlights
The company delivered impressive consolidated financial results for Q3 FY26, demonstrating strong growth across key metrics:
| Metric | Q3 FY26 | Growth (YoY) |
|---|---|---|
| Consolidated Revenue | ₹5,892 million | +27% |
| Consolidated EBITDA | ₹2,726 million | +29% |
| EBITDA Margin | 46.3% | +76 bps |
| Ex-Residential Revenue | ₹5,726 million | +23% |
| Ex-Residential EBITDA | ₹2,686 million | +24% |
The hospitality business specifically generated revenue of ₹4,913 million, representing a 23% year-on-year increase. On a like-for-like basis, excluding The Westin Resort & Spa in the Himalayas, revenue grew 15% year-on-year, indicating strong underlying business performance.
Hospitality Segment Performance
The hospitality division showcased robust operational metrics during the quarter. RevPAR (Revenue Per Available Room) growth reached approximately 12%, primarily driven by a strong 16% increase in average daily rates across the portfolio. Excluding The Westin Resort & Spa in the Himalayas, RevPAR growth was 10%.
Occupancy levels experienced a decline of 230 basis points year-on-year, attributed to specific operational factors:
- Bangalore: Addition of 129 new keys during the fiscal year requiring stabilization
- Athiva Khandala: 100 rooms made operational during the current fiscal year
- Powai: Temporary impact from construction work at CIGNUS II affecting crew business
- Vashi: Massive renovation in preparation for Athiva rebranding
Despite these temporary challenges, the Mumbai Metropolitan Region (MMR) delivered high single-digit RevPAR growth, driven by 6% ADR growth and 2% occupancy increase, outperforming the broader market.
Strategic Brand Initiatives
Chalet Hotels made significant progress in its brand portfolio expansion and repositioning strategies. The company successfully rebranded its NCR resort property from Courtyard by Marriott Aravali Resort to Aravali Marriott Resort & Spa, implementing comprehensive upgrades including room and public area refreshes, a new clubhouse, pool bar, and enhanced meeting facilities.
The launch of Athiva Khandala marked a major milestone, with the property achieving 5 full sold-out days during its first 45-day operational period in Q3. The strong initial performance included sold-out periods driven by free individual travelers, indicating strong market positioning and guest appeal.
Commercial Real Estate Growth
The commercial real estate segment continued its strong performance trajectory:
| Parameter | Q3 FY26 Performance |
|---|---|
| Revenue Growth | +29% YoY to ₹744 million |
| EBITDA Growth | +37% YoY to ₹621 million |
| EBITDA Margin | 83.5% |
| Portfolio Occupancy | 83% |
| December Exit Run Rate | ₹250 million monthly |
During the quarter, the company contracted an additional 150,000 square feet at Powai, bringing total occupancy levels to over 80%. Management expects to reach 90% occupancy at Powai in the near term, with March 2027 monthly revenue exit run rate projected at ₹270 million.
Project Pipeline Updates
Chalet Hotels provided updates on several key development projects. Construction work continues at full capacity for CIGNUS II Powai, remaining on track for FY27 launch. The Taj project at Delhi International Airport faces some delays due to pollution-related construction stoppages, with revised timelines indicating partial launch by Q4 FY27 followed by staggered openings.
Significantly, the company received requisite environmental clearances for its Hyatt Regency Airoli project, resolving previous regulatory entanglements. The mixed-use property, with hotel operations starting from the 26th floor, is expected to require approximately 36 months from construction commencement to completion.
Financial Position and Outlook
The company maintained a strong balance sheet with net debt of ₹20 billion and average cost of finance declining by 14 basis points quarter-on-quarter to 7.48%. Chalet Hotels successfully raised ₹1 billion through commercial paper issuance at a competitive 6.3% fixed coupon, rated A1+ by CRISIL, reflecting strong creditworthiness.
Management outlined planned capital expenditure of approximately ₹25 billion over FY27 to FY29, covering both hospitality and commercial real estate businesses, to be funded primarily through internal accruals. The commercial real estate business is expected to generate annual cash flows of ₹3-4 billion upon full leasing of existing 2.4 million square feet.
Historical Stock Returns for Chalet Hotels
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.67% | +2.00% | +0.25% | +0.56% | +19.95% | +400.80% |
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