Buy Chalet Hotels; target of Rs 1058: ICICI Securities

ICICI Securities's research report on Chalet Hotels

Chalet Hotels’ (CHALET) Q1FY26 hospitality revenue and EBITDA grew 18% and 20% YoY, respectively, led by 7% same-store RevPAR growth. For FY25 overall, hotel revenue grew 18% YoY to INR 15.2bn while EBITDA grew 19% to INR 6.8bn. With company’s operational hotel portfolio likely to grow by 1,371 keys to 4,564 keys by Mar’28E, we estimate CHALET’s hotel revenue to grow at 17% CAGR to INR 20.8bn and hotel EBITDA to grow at 17% CAGR to INR 9.0bn, in FY27E. Retain BUY with an unchanged SoTP-based TP of INR 1,058 based on Mar’27E, valuing the company at 23x EV/EBITDA, 8% cap rate for rental assets and residual value of Vivarea, Bengaluru residential project. Key risks: Slowdown in hotel demand and office leasing.

Outlook

We retain BUY with an unchanged SoTP-based TP of INR 1,058 based on Mar’27E, valuing the company at 23x EV/EBITDA, 8% cap rate for rental assets and residual value of Vivarea, Bengaluru residential project.