Chalet Hotels Q3 Beats Estimates; IDBI Capital Holds 'Hold' Amid Hospitality Strength

TOURISM

Overview

Chalet Hotels Ltd. reported a strong Q3 FY26, exceeding IDBI Capital's expectations. The brokerage noted robust Indian hospitality demand driven by disposable incomes, travel trends, and MICE activity. Average daily rates saw healthy double-digit growth, particularly in key cities. Chalet's new Athiva Khandala resort brand also performed well, achieving sold-out days.

Chalet Hotels Ltd. posted a robust Q3 FY26, outperforming IDBI Capital's projections across key operating metrics. Management commentary remains optimistic, citing a structurally sound Indian hospitality market bolstered by rising disposable incomes, experiential travel, and increased MICE (Meetings, Incentives, Conferences, and Exhibitions) activity.

Revenue Growth Drivers

Average daily rates (ADRs) continued their healthy double-digit expansion across major markets, with Bangalore, Hyderabad, Pune, and the Mumbai Metropolitan Region (MMR) demonstrating significant momentum. Despite operational challenges at its Powai and Vashi properties, MMR achieved high single-digit RevPAR (Revenue Per Available Room) growth, signaling resilience and market outperformance.

New Brand Performance

The recently launched Athiva Khandala resort brand has made an immediate impact, recording numerous sold-out days within its initial 45-day operational period. Strong guest feedback and a surge in bookings for weddings and MICE events are credited for this rapid traction.

Valuation and Outlook

IDBI Capital has extended its valuation horizon to FY28E, reaffirming a 'Hold' rating. The brokerage adjusted its target price to Rs 1,007 from Rs 1,025, applying a 21x EV/EBITDA multiple to its FY28E estimates, reflecting confidence in the company's future earnings potential.

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