Chalet Hotels Swings to Profit of ₹154 Crore in Q2 FY26 on Record Revenue Growth

Chalet Hotels Ltd. announced robust financial results for the second quarter of FY26, marking a dramatic turnaround from the previous year. The company reported a consolidated net profit of ₹154 crore, a significant swing from a net loss of ₹138 crore in the same quarter last year. This performance was propelled by exceptional revenue growth across its key business verticals: hospitality, rentals, and residential projects.

Total revenue nearly doubled, surging by 94% year-on-year to ₹735 crore from ₹377 crore. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a substantial increase, rising 98% to ₹299 crore from ₹150 crore in Q2 FY25. Profit Before Tax (PBT) jumped 158% to ₹2,049 million. The company's EBITDA margins improved slightly to 40.7% from 39.7%.

The hospitality segment, despite a dip in occupancy from 74% to 67% due to seasonal factors, grew its revenue by 13% to ₹3,802 million, primarily by increasing Average Room Rates (ARR) by 16% to ₹12,170. The rental and annuity segment was a strong contributor, with revenue up 76% to ₹738 million and EBITDA up 88% to ₹607 million, achieving a high margin of 82.3%. The residential segment, previously negligible, contributed ₹2,821 million in revenue and ₹1,073 million in EBITDA, thanks to the handover of 55 flats in its Bengaluru project.

In a strategic move, Chalet launched ATHIVA Hotels & Resorts, a new premium lifestyle brand focusing on wellness and sustainability, with its first property in Khandala. Chalet also became the first hospitality brand to achieve the Climate Group's EV100 target, highlighting its commitment to sustainability. The company declared its maiden interim dividend of ₹1 per share. Future developments include The Taj at Delhi Airport, Varca Beachfront Resort in Goa, and Cignus II at The Westin Powai Lake.

Outgoing MD & CEO Sanjay Sethi expressed confidence in operational resilience and the continuity of growth under new leadership. Chalet's stock ended near its trading price, having risen 17% year-to-date.

**Impact**: This news is highly significant for Chalet Hotels Ltd. shareholders and the broader hospitality and real estate sectors in India. The strong financial turnaround, strategic brand launch, and dividend declaration can positively influence investor sentiment and potentially lead to stock price appreciation. Its commitment to sustainability and future projects indicates continued growth potential. Rating: 8/10.

**Difficult Terms:** * **Consolidated Net Profit**: The total profit of a parent company and all its subsidiaries after all expenses and taxes have been deducted. * **EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. * **EBITDA Margins**: EBITDA expressed as a percentage of revenue, indicating how efficiently a company generates profit from its sales. * **Profit Before Tax (PBT)**: Profit earned by a company before deducting income taxes. * **Interim Dividend**: A dividend paid out by a company to its shareholders during the company's financial year, rather than at the end of the year. * **Hospitality Segment**: Business related to providing services like accommodation, food, and beverages, primarily in hotels and restaurants. * **Rental Segment**: Revenue generated from leasing out properties or spaces. * **Residential Segment**: Business related to the development and sale of housing properties. * **Average Room Rate (ARR)**: The average daily rate achieved for a sold room in a hotel. * **Revenue Per Available Room (RevPAR)**: A key performance indicator for hotels, calculated by dividing total revenue by the number of available rooms. * **Sustainability**: Practices that meet the needs of the present without compromising the ability of future generations to meet their own needs, often referring to environmental and social responsibility. * **EV100**: A global initiative led by The Climate Group, bringing together companies committed to transitioning to electric transport and ensuring charging infrastructure is in place by 2030.