ICICI Securities research report on Chalet Hotels
Chalet Hotels (CHALET) delivered in-line Q3FY24 revenue/adjusted EBITDA of INR 3.7bn/INR 1.7bn with RevPAR growing 18% YoY to INR 7,838. While industry peers focus on the asset-light expansion route, Chalet is choosing to grow its hotel room/office rental portfolio over FY23-27E via the ownership route (mix of existing project expansion/long -term leases). We see this as the right strategy in an industry upcycle (FY23-FY28E).
Outlook
We estimate hotel EBITDA CAGR of 18% over FY23-26 at EBITDA margins of 44-45%. Retain BUY; SoTP-based TP revised to INR 885 (from INR 715) based on 21x Mar’26E EV/EBITDA for the hotel business (earlier 19x Dec’25E EV/EBITDA), 9% cap rate for rental assets and residual value of Vivarea, Bengaluru residential project.
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