Chalet Hotels: A Quarter of Strategic Evolution and Robust Growth

Chalet Hotels Limited, a prominent player in India's hospitality and real estate sectors, has reported a quarter of significant strategic advancements and robust financial performance for Q2 and H1 FY26. The company's consolidated revenue surged to INR743.8 crore, marking an impressive 94% year-on-year growth. This strong top-line performance was complemented by a 98% increase in consolidated EBITDA, reaching INR307.7 crore. The period was highlighted by the launch of a new proprietary brand, Athiva Hotels & Resorts, and continued progress on key development projects, underscoring Chalet's dual-engine strategy of hospitality and commercial real estate.

The company's performance was driven by its diversified business segments. The Hospitality Business contributed INR380.2 crore, growing 13% year-on-year. While overall occupancy saw a temporary dip to 67%, impacted by new inventory ramp-up and weather conditions, the average room rates (ADR) remained strong. The Commercial Real Estate segment demonstrated exceptional growth, with revenue increasing by 76% to INR73.8 crore, and an EBITDA margin of 82.3%. The Residential Project segment recognized INR282.1 crore in revenue, primarily from the handover of 55 apartments at the Vivarea, Koramangala, Bengaluru project.

Strategic Initiatives Driving Future Growth

Chalet Hotels is not just resting on its laurels; it is actively shaping its future through strategic initiatives. The most notable is the launch of Athiva Hotels & Resorts, a new-age premium lifestyle brand. This brand debuted with the transformation of 'The Dukes Retreat' in Khandala into Athiva Resorts & Spa Khandala, now featuring 147 rooms. The company plans to transition five additional properties with 900 keys into the Athiva brand over the next few years, aiming to create a distinct identity and potentially an asset-light business vertical in the future. This move strengthens Chalet's developer and owner DNA, positioning it for experience-led travel and conscious luxury.

In terms of development, the Taj at Delhi International Airport project, featuring 385-390 rooms, is progressing on schedule for an H1 FY27 opening. This hotel is envisioned as a transient-driven property with high occupancy expectations. The CIGNUS Powai® Tower II, a commercial project with 0.9 msf of leasable area, is also on track for completion in Q4 FY27. These projects highlight Chalet's commitment to expanding its asset base and diversifying revenue streams. The company has a planned capex of INR2,500 crore over the next three years, primarily funded through internal accruals, to support these growth initiatives.

Financial Health and ESG Leadership

Chalet Hotels has demonstrated robust financial health and disciplined capital allocation. The company's net debt stood at INR2,092.3 crore, with the average cost of finance contracting by 38 basis points to 7.62%. A significant green flag for investors was the declaration of the company's maiden interim dividend of INR1 per share, reflecting confidence in its performance and commitment to shareholder value. Furthermore, ICRA upgraded Chalet Hotels' credit ratings from A+ to AA- stable for long-term credit, underscoring its strong balance sheet and credibility with lenders.

Beyond financials, Chalet Hotels has emerged as a leader in environmental, social, and governance (ESG) initiatives. The company proudly announced achieving the Climate Group's EV 100 target, becoming the first hospitality brand in India to do so. As of September 2025, all operational assets are equipped with EV charging points, and the guest fleet is 100% electric, ahead of the target date. This commitment to sustainability, branded as 'Parivartan,' aligns with the company's vision for responsible growth.

Financial Summary (Consolidated - Q2 FY26)

Segment Performance (Q2 FY26)

Outlook and Concluding Remarks

Chalet Hotels is navigating a dynamic market with strategic clarity and disciplined execution. While the company acknowledged temporary pressures on occupancy and margins due to new inventory and external factors, management expressed strong optimism for the second half of FY26. They anticipate robust performance driven by festive demand, increased domestic travel, and a resurgence in MICE and corporate business. The focus remains on stabilizing new assets, leveraging the new Athiva brand, and continuing progress on its robust development pipeline. Chalet Hotels appears well-positioned for sustained growth, reinforcing investor confidence through transparent disclosures and a clear strategic roadmap.