SAMHI Hotels: Charting a Course for Growth with Strategic Expansion and Strong Financials

SAMHI Hotels Limited has delivered a robust performance in Q2 FY26, showcasing consistent operational growth and strategic advancements that are poised to redefine its trajectory for the coming decade. The company reported a total income of INR 296.3 crore, marking an impressive 11% year-on-year growth. This financial uplift was complemented by a significant 14.2% increase in Consolidated EBITDA, reaching INR 110.5 crore, with margins improving to 37.3%. For the first half of FY26, SAMHI recorded a 12% total revenue growth and a 16.3% EBITDA growth, establishing a strong foundation for the remainder of FY26 and into FY27.

Management highlighted that the quarter marks a pivotal moment, not just for consistent operating performance but also for the announcement of two transformational growth projects. These initiatives are set to expand SAMHI's portfolio into new strategic markets, reinforcing its position in India's dynamic hospitality sector. The company's balance sheet has strengthened considerably, with net debt to EBITDA reducing to 2.9x and average interest costs falling to 8.5%. A recent credit rating upgrade to A+ with a stable outlook further underscores its financial resilience and ample flexibility for future expansion.

Strategic Expansion: New Horizons in Mumbai and Hyderabad

The most significant announcement is SAMHI's entry into India's financial capital with a landmark dual-branded hotel development in Navi Mumbai. This project, proposed under the Westin and Fairfield brands by Marriott, will feature approximately 700 rooms, making it SAMHI's largest hotel by room count. Phase 1 will comprise around 400 rooms, with an estimated cost of INR 650 crore over 3-4 years. The total investment for the full 700 rooms is projected to be around INR 1,000 crore over a long-term period. This strategic move fills a critical gap in SAMHI's portfolio, establishing its presence across India's five largest office markets: Delhi NCR, Bangalore, Hyderabad, Pune, and now Mumbai. The company anticipates benefiting from the structural demand shift driven by large-scale infrastructure and corporate investments in Navi Mumbai.

Another key development is the signing of a long-term variable lease for a 260-room mid-scale hotel in Hyderabad's Financial District. This marks SAMHI's third property in the precinct, allowing it to operate across all three price points in Hyderabad's rapidly growing business district. This capital-efficient model minimizes upfront capital, with SAMHI investing only in fit-outs post-handover, aligning with its growth philosophy. The hotel is expected to be operational in 36 to 42 months.

Ongoing projects also show steady progress. The W Hyderabad in HITEC City, a 170-room luxury development, is in its final design stages and is targeting a December 2026 opening. Renovations and rebranding initiatives, such as the conversion of Four Points by Sheraton in Pune to a Courtyard by Marriott, are also underway, expected to be completed by the end of FY27. The Trinity renovation is progressing ahead of expectations, with a lower-than-anticipated investment achieving the desired rate profile.

Financial Health and Operational Efficiency

SAMHI's financial discipline is evident in its improved profitability and balance sheet metrics. The company's net debt to EBITDA has reduced significantly, and management aims to further bring it down to 2.5x in the midterm. This deleveraging, combined with strong free cash flow generation (an estimated INR 170 crore of investable surplus annually), provides ample capacity to fund its ambitious growth pipeline without putting undue stress on the balance sheet.

Note: All figures are converted from millions to crores. PAT includes reversal of Navi Mumbai land impairment and gain on sale of Caspia Delhi.

The company's operational efficiency is reflected in its sustained EBITDA margins. Despite some travel disruptions due to geopolitical tensions and severe monsoons in Q2, management expects a significantly stronger H2 FY26, driven by new inventory and ballroom renovations. The focus on micro-market-driven strategies across various price points ensures a balanced risk-reward profile and consistent returns.

Outlook and Vision

SAMHI's management expressed confidence in maintaining its long-term guidance of 9-11% CAGR for same-store total revenue growth. The strategic initiatives, coupled with a strong balance sheet and robust free cash flows, are expected to drive significant value creation for shareholders. The company's multi-price point strategy across key commercial districts aims to dominate markets and provide a runway for growth for the next decade or two. SAMHI is not just reacting to market trends but actively shaping its future through disciplined capital allocation and strategic foresight.

Segment Performance Overview (Q2 FY26)

Note: Based on same-store data, excluding specific asset sales and acquisitions.

SAMHI Hotels Limited is clearly in an inflection point, with its strategic clarity, disciplined execution, and strong financial health positioning it for sustained growth and enhanced shareholder value in the evolving Indian hospitality landscape.