Whalesbook
📉 The Financial Deep Dive
The Numbers:
SAMHI Hotels reported a robust Q3 FY26, with total income reaching ₹342 Cr, marking a significant 16.2% increase year-on-year. Same-store asset income grew by approximately 14% YoY, and same-store RevPAR saw a substantial 13% jump to ₹5,643. Underlying EBITDA (excluding GST impact) surged by 19.2% YoY to ₹126 Cr, demonstrating strong operating flow-through. However, reported EBITDA growth was 13.2% YoY to ₹126 Cr. Profit After Tax (PAT) for the quarter stood at ₹48 Cr, with ₹30.6 Cr attributable to SAMHI shareholders.
The Quality:
The company's underlying EBITDA growth highlights efficient operations. However, reported EBITDA faced margin compression. EBITDA margins moderated to 36.9% from 37.9% YoY, a drop of approximately 200 basis points, primarily due to changes in GST regulations, which the company noted had an estimated impact of ₹6.7 Cr on EBITDA. Finance costs saw a significant reduction, declining to ₹40 Cr from ₹60 Cr YoY. Trailing 12-month (TTM) Free Cash Flow was ₹300 Cr, projected to exceed ₹400 Cr in the next 12 months.
The Grill:
Management reiterated its long-term revenue target of approximately ₹3,000 Cr by FY30. Near-term RevPAR growth is expected in the high single-digit to early double-digit range, with a low teens growth projected for the next 2-3 years. Key growth drivers identified include strong office absorption in key markets, expansion into upscale and upper upscale segments (projected to increase from 42% to 60% of revenue mix), and a pipeline of capital-efficient variable leases. SAMHI Hotels plans to fund its growth capital expenditure through internal accruals, aiming to maintain its net debt-to-EBITDA ratio at a stable 3x. The company anticipates no significant tax outflows for the next 3-5 years due to accumulated losses. As of December 31, 2025, net debt stood at ₹1,450 Cr.
🚩 Risks & Outlook
Specific Risks:
The primary short-term risk identified is the margin compression caused by GST regulations. While management expresses confidence in absorbing these effects within a couple of quarters, any sustained or increased regulatory impact could challenge profitability. Execution risks related to the development and rebranding of 1,900 new rooms also warrant attention.
The Forward View:
SAMHI Hotels remains optimistic, citing India's economic momentum and favorable hospitality sector dynamics. Investors will be watching the company's ability to translate RevPAR growth into bottom-line improvements, the successful ramp-up of new projects like the W Hyderabad and Westin Bangalore, and the continued management of debt levels within the targeted ratio. The long-term revenue target of ₹3,000 Cr by FY30 serves as a key benchmark for future performance.