Chalet Hotels reported a 40% rise in net profit to ₹216.2 crore for the second quarter of fiscal 2027, even as headline revenue fell 31.7% to ₹501.9 crore. The revenue drop reflects the absence of residential project sales from the previous year, while core hospitality operations showed resilience with margins reaching 44.5%.
Chalet Hotels released its financial results for the second quarter of fiscal year 2027 on November 4, showing a mixed performance due to changes in its revenue mix. The company reported a net profit of ₹216.2 crore, marking a 39.7% increase compared to the same period last year. This bottom-line growth was significantly helped by a deferred tax credit rather than purely operational income.
At the same time, the company's reported revenue declined by 31.7% to ₹501.9 crore. This drop is primarily a result of the base effect from the previous year, when the company recorded income from residential projects. Since these sales do not happen every quarter, the headline revenue figures appear lower this time. When excluding the residential segment, the core hospitality business—which includes the company's hotels—actually performed well, with revenue climbing 11% to ₹511 crore.
Operational performance remains a key indicator of health for the company. Core hospitality EBITDA grew 13%, with margins expanding to 44.5%. This 110-basis-point improvement suggests that the company is effectively managing costs despite the volatility often seen in the hospitality sector. Leisure properties were a major contributor, recording a 34% increase in revenue per available room, driven by higher occupancy rates and room pricing.
Looking ahead, the company is focusing on expanding its capacity to capture future demand. Construction on several key assets is currently underway, including the Taj Delhi International Airport, CIGNUS II in Powai, and the ATHIVA Pulse in Navi Mumbai. These projects are intended to boost the company’s portfolio, though investors should monitor the execution timeline for these developments to ensure there are no major cost overruns or delays.
While the core hospitality business remains robust, there are factors investors should track. The company's reliance on residential projects can lead to volatile revenue reports quarter-to-quarter, as income is recognized only when projects reach specific stages. Additionally, the hospitality sector remains sensitive to changes in air travel connectivity and fluctuating ticket prices, which can impact business travel segments.
Another area to monitor is the promoter group's shareholding status. As of recent filings, there is a promoter pledge level of approximately 31.9%. While such arrangements are common in large real estate and infrastructure-linked businesses, high pledge levels are a factor that investors generally watch as part of the company's governance and balance sheet health. The company's future revenue growth will likely depend on the successful commissioning of its new properties and its ability to maintain high occupancy levels across its existing portfolio.