Buy Chalet Hotels; target of Rs 1058: ICICI Securities

ICICI Securities research report on Chalet Hotels

For FY25 overall, Chalet Hotels’ (CHALET) hotel revenue has grown by 18% YoY to INR15.2bn while EBITDA has grown 19% to INR 6.8bn. As of Mar’25, CHALET has 3,314 operational hotel keys across 11 hotels, along with 2.4msf of annuity rental assets. With the company’s operational hotel portfolio likely to grow by 1,371 keys over FY25–28E to 4,564 keys, we estimate CHALET’s hotel revenue to grow at a 17% CAGR over FY25–27 to INR 20.8bn and hotel EBITDA to grow at a 17% CAGR to INR 9bn over the same period.

Outlook

We retain our BUY rating with an unchanged Mar’27E SoTP-based TP of INR 1,058/share, 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.

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