Chalet Hotels delivers record Q2 FY25 performance with 20% revenue increase

Chalet Hotels Limited reported its highest-ever revenue growth for the second quarter of FY25, ending September 30, 2024. The company announced a total income of INR 3.8 billion, marking a 20% year-on-year increase from the same period in FY24.

The hospitality group attributed the rise in revenue to strategic operational improvements and the expansion of its hotel portfolio. The company’s Average Daily Rate (ADR) reached INR 10,532, reflecting a 10% increase, while its total Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) stood at INR 1.6 billion, also up by 20%.

Hospitality Segment Leads Growth

The hospitality segment, a major contributor to Chalet Hotels’ growth, posted a revenue of INR 3.3 billion for the quarter, an 18% rise compared to Q2 FY24. The company reported an occupancy rate of 74%, with the Revenue Per Available Room (RevPAR) increasing by 10% year-on-year to INR 7,756. The segment’s EBITDA also grew to INR 1.4 billion, up 18% from the previous year.

Chalet Hotels’ CEO, Sanjay Sethi, noted that the positive trend in room rates and robust EBITDA margins demonstrate the company’s successful execution of its strategic initiatives. He emphasized the importance of operational excellence, highlighting that the recent 11-acre beachfront acquisition in Varca, Goa, would significantly enhance their portfolio and transform the region over the next three years.

ESG Recognition and Awards

Chalet Hotels continued its success beyond financial performance, gaining recognition for its environmental, social, and governance (ESG) efforts. The company received the KPMG ESG Excellence Award 2024 in the Mid-cap/Small-cap Companies category. Additionally, it was named one of ‘India’s Best Workplaces for Women’ by Great Place To Work for 2024.

Development and Future Plans

Chalet Hotels is actively expanding its footprint, focusing on various projects that promise further growth. The company acquired prime beachfront land in Varca, Goa, with plans to develop around 170 upscale rooms. Additionally, its ongoing projects include the expansion of its Bengaluru Marriott Hotel Whitefield and the renovation of The Dukes Retreat, expected to complete in Q4 FY25.

The company also announced the construction timeline for several significant properties: ‘Taj’ at the T3 Terminal of Delhi International Airport, ‘Hyatt Regency’ in Navi Mumbai, and CIGNUS POWAI® Tower II in Mumbai, with expected completion in FY27. Renovations have also commenced at the Four Points by Sheraton in Navi Mumbai.

Financial Overview

Chalet Hotels’ consolidated income for Q2 FY25 reached INR 3.8 billion, a 20% rise from Q2 FY24. EBITDA for the same period increased by 20%, reaching INR 1.6 billion, with a margin slightly dipping to 40.6% compared to 40.7% in Q2 FY24. The Profit Before Tax (PBT) stood at INR 794 million, marking a remarkable 79% rise year-on-year.

The company highlighted that the withdrawal of the indexation benefit on long-term capital gains as per the Finance (No. 2) Act, 2024, led to a one-time, non-cash impact of INR 2.02 billion on its profits. Despite this, Chalet Hotels remains optimistic about its performance trajectory, citing strong fundamentals and expanding opportunities.

Industry analysts suggest that Chalet Hotels’ performance indicates a robust recovery in the hospitality sector post-pandemic. Experts highlighted the company’s strategic investments in high-potential regions like Goa and its focus on enhancing the guest experience through upscale developments as crucial to its sustained growth.