Chalet Hotels Skyrockets: New Luxury Brand & Stellar Q2 Results Spark Massive Investor Frenzy!

Chalet Hotels' stock experienced a significant rally on Wednesday, reaching an intraday high of ₹918, as the company unveiled its new premium hospitality brand, Athiva Hotels & Resorts. This launch, coupled with strong financial performance for the second quarter of FY26, has significantly boosted investor confidence.

New Brand Ignites Rally

The introduction of Athiva Hotels & Resorts marks an aggressive expansion by Chalet Hotels into the upscale resort and convention segment. The portfolio is set to comprise six hotels with over 900 keys. Key upcoming properties include Athiva in Navi Mumbai, Athiva Resort & Spa at Aksa Beach in Mumbai, Athiva Resort & Spa in Varca and Bambolim in Goa, and the Athiva Resort & Convention Centre in Thiruvananthapuram.

Robust Q2 Financial Performance

Chalet Hotels reported impressive financial results for Q2 FY26. Total revenue soared by 94% year-on-year to ₹740 crore, while Earnings Before Interest, Taxes, Depreciation, and Amortization (Ebitda) nearly doubled.

• The core hospitality business showed solid growth, with revenue increasing by 20% year-on-year to ₹460 crore.
• Hospitality Ebitda improved by 25% year-on-year to ₹200 crore.
• Margins expanded by 1.4 percentage points to 43.4%.
• The company declared its first interim dividend of ₹1 per share, signaling a focus on shareholder returns.
• Inventory grew 10% year-on-year through acquisitions and new additions.
• The company also met Climate Group’s EV100 target and handed over 55 flats under a Bengaluru residential project.

Analyst Confidence Soars

Axis Securities reiterated its 'Buy' rating on Chalet Hotels, raising the target price to ₹1,120 from ₹1,030. This optimism is supported by robust annuity growth, strong margin performance, and the strategic transition towards a brand-led hospitality platform with Athiva.

• Q2 FY26 results were largely in line with analyst estimates for revenue, Ebitda, and profit after tax (PAT).
• The hospitality business achieved 13.4% year-on-year growth, driven by a 15.6% rise in Average Room Rate (ARR) to ₹12,170.
• Management acknowledged a temporary dip in occupancy to 67% due to new supply additions.
• Axis Securities anticipates a strong H2 FY26 outlook, fueled by festive demand, holidays, and the MICE season, alongside the company's dual strategy in hospitality and commercial real estate.

Company Snapshot

Chalet Hotels Limited, part of the K Raheja Corp group, is a prominent owner, developer, and operator of high-end hotels and luxury resorts in India. The company currently operates 11 hotels with 3,359 keys under global brands like JW Marriott, The Westin, and Novotel, with nearly 1,200 additional rooms under development. It is also expanding its commercial real estate portfolio.

Impact

• The launch of Athiva Hotels & Resorts and strong Q2 results are expected to positively impact Chalet Hotels' stock price and investor sentiment.
• This move could signal renewed growth and expansion opportunities within the Indian hospitality sector, particularly in the premium resort and convention segments.
• Analyst upgrades suggest potential for further capital appreciation, attracting investors looking for growth opportunities.
• Impact Rating: 7/10

Difficult Terms Explained

• Ebitda: Earnings Before Interest, Taxes, Depreciation, and Amortization. It measures a company's operating performance.
• Keys: Refers to the number of hotel rooms available for guests.
• ARR (Average Room Rate): The average rental income earned per occupied room per day.
• MICE: Stands for Meetings, Incentives, Conferences, and Exhibitions, referring to a segment of business tourism.
• EV/Ebitda: Enterprise Value to Ebitda. A valuation metric used to compare companies within the same industry.
• PAT (Profit After Tax): The net profit of a company after all expenses and taxes have been deducted.