Whalesbook
SAMHI Hotels concluded fiscal year 2026 with a significant 5.6-fold increase in profit after tax, reaching ₹5,665 million. Total income rose 12.3% to ₹12,790 million, surpassing revenue guidance. The company's stock saw a 2.35% gain on Friday.
Despite the strong profit growth, EBITDA margins narrowed to 36.2% from 37.3% year-over-year. This contraction was mainly due to Goods and Services Tax adjustments. Without these, EBITDA growth would have been a more substantial 13%. Revenue per available room (RevPAR) grew 9.5% to ₹5,365, with occupancy stable at 74%. The company's market capitalization is ₹3,332 crore, with a trailing P/E of 5.69.
SAMHI Hotels is pursuing an aggressive expansion strategy, adding four new hotel projects, including a large development in Navi Mumbai. It also acquired a 70% stake in RARE India, which manages 73 heritage and boutique properties, targeting niche markets. Singapore's GIC invested approximately ₹6,000 million for a 35% stake in a sub-platform holding about 1,000 rooms.
This growth increased the company's net debt to ₹14,507 million by March 31, 2026, raising the net debt-to-EBITDA ratio to 3.1x from 2.9x in September 2025. Borrowing costs have decreased, with interest rates falling to 7.9% from 9.2% a year ago.
The increased leverage is a key risk, especially if earnings falter or interest rates rise. The margin compression, even with tax adjustments, signals sensitivity to operational costs and regulations. Competitors like ITC Hotels, part of a diversified group, may have greater financial flexibility and pricing power.
While strategic investments and acquisitions are positive, they add complexity. The success of the RARE India acquisition will be crucial for its strategic value and profitability contribution. Looking ahead, SAMHI Hotels' ability to integrate new assets and manage its debt will be key. Investors will monitor RevPAR growth, occupancy, and margin sustainability amid ongoing investments and economic shifts.