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Viceroy Hotels Checks In With Strong Q3, Eyes Major Expansion Post ₹215 Cr Hyderabad Acquisition
Viceroy Hotels Limited has reported a significant upturn in its financial performance for the third quarter of FY26, alongside a substantial acquisition and ambitious expansion plans that signal a robust growth trajectory for the hospitality player.
Financial Performance
The company posted consolidated revenues from operations of ₹38.33 Crore in Q3 FY26, marking a modest 1.5% year-on-year (YoY) increase and a healthy 24.5% jump quarter-on-quarter (QoQ). Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) saw a stronger 6.5% YoY rise to ₹12.09 Crore, with an improved EBITDA margin of 31.5%. Profit Before Tax (PBT) surged by 53.2% YoY to ₹10.7 Crore, leading to a 50% YoY jump in Profit After Tax (PAT) to ₹10.9 Crore. The PAT margin stood at a healthy 28.5%.
For the nine-month period (9M) of FY26, consolidated revenue stood at ₹94.5 Crore, a slight dip of 2.7% YoY, attributed by the company to disruptions from ongoing renovation projects. However, PBT grew by 9.2% YoY to ₹15.3 Crore.
Average Daily Rates (ADR) showed positive momentum, with Marriott's ADR rising 10.3% YoY to ₹8135 and Courtyard's ADR increasing by 11.3% YoY to ₹8386. This contributed to a combined RevPAR of ₹5235 for the quarter.
The Big Deal: Hyderabad Acquisition
In a significant strategic move, Viceroy Hotels has acquired the Marriott Executive Apartments in Hyderabad for ₹215 Crore. This property boasts 75 executive rooms and spans 1,57,000 square feet. The acquisition is expected to contribute ₹48 Crore in turnover and ₹21 Crore in EBITDA for the calendar year 2025, as per the disclosed figures.
Building the Future: Expansion and Capex
Viceroy Hotels has laid out an aggressive expansion blueprint, targeting a total of 1,000 hotel keys by the year 2030. The company is investing in a ₹120 Crore capex program for its Marriott properties. Phase 1, which involved adding 56 rooms to the Courtyard hotel at a cost of ₹50 Crore, has been completed and has already boosted ADR. Phase 2 will see the convention capacity at Marriott double to 20,000 sq ft by December 2026 (₹20-30 Crore) alongside a ₹40 Crore refurbishment of 295 Marriott rooms. Phase 3 includes lobby and rooftop restaurant upgrades, estimated at ₹10-15 Crore.
Future Flavors and Outlook
Management expressed confidence in sustaining EBITDA margins above 30% and aiming for 40% in the long term. The contribution from Food & Beverage (F&B) is projected to rise to 48% of revenues post-renovation, with banquet facilities expected to account for 30% or more. A new rooftop bar is anticipated to generate an additional ₹50 Lakhs per month, equating to ₹6 Crore annually. The company sees favorable macro tailwinds, including supportive tourism policies, increased domestic air travel, and Hyderabad's enhanced connectivity, positioning its portfolio to capture market momentum.
Peer Comparison
The Indian hospitality sector has witnessed a strong rebound post-pandemic, with major players like Indian Hotels Company, EIH Limited (Oberoi Group), and ITC Hotels reporting improved occupancy rates and robust revenue growth. Companies are actively investing in property upgrades and expansions to cater to rising demand. Viceroy Hotels' strategic acquisition and expansion plans align with this sector-wide trend, aiming to consolidate its position and capitalize on the growing tourism and business travel market in India, particularly in key metropolitan hubs like Hyderabad. While competitors are also expanding, Viceroy's specific focus on Hyderabad and its strategic acquisition targets a growing market segment.
Impact
Rating: 7/10. This acquisition and expansion plan position Viceroy Hotels for substantial growth in the recovering Indian hospitality sector, particularly in the key market of Hyderabad. It signals confidence in the industry's future and potentially consolidates market share.
Terms Explained
- ADR (Average Daily Rate): The average rental income collected per occupied hotel room per day. It is calculated by dividing the total room revenue by the number of rooms sold.
- EBITDA: Stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a key financial metric used to assess a company's operating performance, showing profitability before accounting for financing, taxes, and asset wear-and-tear.
- PAT (Profit After Tax): This is the net profit a company earns after all expenses, including taxes, have been deducted from its total revenue. It represents the actual profit available to shareholders.
- Keys: In the hotel industry, 'keys' is a term used to denote the total number of guest rooms available in a hotel or a hotel chain.
- RevPAR: Revenue Per Available Room. It is a performance metric in the hotel industry that divides the total revenue from a rented room by the number of rooms and the number of days being considered. It indicates how well a hotel is filling its available rooms at an appropriate average rate.