CHALET - Chalet Hotels Limited Share Price

Management expressed a positive outlook, emphasizing strong sector resilience driven by economic growth, rising travel demand, and upcoming infrastructure developments like new airports in Mumbai and Delhi, expected to boost passenger capacity and international traffic. Key highlights include:

1. Record Performance: Q3 FY25 was Chalet's best-ever quarter, with consolidated revenue up 22% YoY (Rs.4.6B) and EBITDA up 23% (Rs.2.1B). Hospitality RevPAR grew 16% YoY (18% ADR growth, 70% occupancy).
2. Growth Drivers: Robust corporate travel, MICE, leisure, and weddings. Mumbai, Bengaluru, and Pune led RevPAR growth. Annuity (rental) revenue surged 92% YoY (Rs.577M), nearing Rs.20Cr monthly run rate.
3. Pipeline Projects:
   • The Dukes Retreat (partial opening), Taj Delhi Airport (Q2 FY27), and Bengaluru Marriott expansion (Q4 FY25).
   • Goa (175"“180 keys), Airoli (Mumbai), and Cignus 2 (Powai commercial) progressing.
   • Repositioning Courtyard Aravali to Marriott brand.
4. Leasing Momentum: 400k sq. ft. leased in Q3; targeting full occupancy (2.4M sq. ft.) in 2"“3 quarters. Rental EBITDA margins at 79%.
5. Residential Sales: 18 units sold in Q3 (avg. Rs.22k/sq. ft.), with Rs.4B receivables outstanding.
6. Financial Strength: Net debt at Rs.15.8B, manageable capex plan (Rs.20B over 3 years funded via internal accruals). Margins sustained at 45.5% despite project ramp-up costs.
7. Leadership & Culture: New COO addition; sixth consecutive Great Place to Work certification.

Management remains confident in double-digit RevPAR growth, margin expansion, and leveraging India's infrastructure boom for sustained growth.

Question 1:
Karan Khanna (Ambit Capital): When we talk about the MMR market, where for 9 months FY '25 you've seen a RevPAR growth of about 6%, while peers reported 12"“14% growth, could you highlight key reasons? What impact are you expecting from the upcoming Fairmont hotel?

Answer:
MMR RevPAR grew 6"“7% due to prioritizing ADR growth (13% YoY) over occupancy (mid-70s). Fairmont's 450-room supply (200 rooms initially) is manageable, as Chalet's Marriott partnership and loyalty programs ensure competitiveness. JW Marriott Sahar's premium positioning and distribution strength will sustain RevPAR leadership.

Question 2:
Karan Khanna (Ambit Capital): Has foreign traveler share (39%) shown recovery signs to aid ARR growth?

Answer:
Foreign room nights grew 5% YoY (72,684 vs. 69,326). Mumbai's new airport (Navi Mumbai) will ease flight capacity constraints, enabling more international carriers and boosting foreign travel. Domestic demand remains robust, supporting overall growth.

Question 3:
Karan Khanna (Ambit Capital): Please elaborate on the Kerala project (capex, timelines, demand).

Answer:
The 150-room Kerala project (Phase 1) includes a convention center to drive demand. Timelines depend on government land transfers. Future phases may expand to 300"“400 rooms, with waterfront villas considered. Demand will focus on conventions and leisure, with corporate potential.

Question 4:
Jinesh Joshi (PL Capital): Why did finance costs rise to Rs.45 crores in Q3?

Answer:
Higher interest costs followed the capitalization of Powai's commercial building (Cignus 2) post-OC. Net debt remains Rs.1,580 crores, with future capex (Rs.20B over 3 years) funded via internal accruals.

Question 5:
Jinesh Joshi (PL Capital): What drove Bengaluru's 30% ADR growth?

Answer:
Bengaluru's ADR surged due to strong corporate demand and limited supply. Occupancy rose 4%, driving 40% RevPAR growth. Additional rooms (129) will stabilize soon, supporting sustained growth.

Question 6:
Archana Gude (IDBI Capital): How has Aravali Resort (Courtyard by Marriott) performed post-acquisition?

Answer:
Aravali's RevPAR grew 15% YoY, with ADRs exceeding Rs.15,000. Plans to rebrand it as a Marriott property (higher tier) will enhance positioning and rates further.

Question 7:
Adhidev Chattopadhyay (ICICI Securities): What is the leasing portfolio's exit run-rate expectation?

Answer:
Leasing momentum added 400,000 sq. ft. in Q3 (1.6M sq. ft. total). Exit run-rate targets Rs.30 crores/month (~Rs.400 crores annualized) with 90% EBITDA flow-through. Full occupancy expected in 2"“3 quarters.

Question 8:
Abhay Khaitan (Axis Capital): Will JW Marriott Sahar face occupancy pressure from new supply?

Answer:
JW Marriott Sahar's 76% occupancy and Marriott's distribution/loyalty programs ensure resilience. F&B upgrades and RFP lock-ins for corporate rates support premium positioning despite competition.

Question 9:
Aliasgar Shakir (Motilal Oswal AMC): Why was F&B growth muted (8"“9%) despite festive/wedding demand?

Answer:
F&B growth slowed due to new hotels (e.g., Aravali, Dukes Retreat) with lower non-resident dining. Upcoming high-energy F&B outlets at JW Marriott Sahar and Westin Powai will boost growth. Focus remains on room revenue (higher margins).

Question 10:
Rajiv Bharati (Nuvama): Are greenfield projects viable amid high capital costs?

Answer:
Chalet's pipeline (1,100 rooms under development) targets Tier 1 cities with high barriers to entry (e.g., Mumbai). Returns are prioritized, with growth via mixed-use/JV models. Current projects leverage existing land, reducing costs.