Apeejay Surrendra Park Hotels FY26: Growth with margin pressure, and a bigger FY30 playbook

Apeejay Surrendra Park Hotels Limited closed FY26 with revenue from operations of INR 707.3 crore, up 12.0% year on year. EBITDA rose to INR 218.0 crore, but EBITDA margin fell to 30.82% from 33.00% in FY25. Profit after tax came in at INR 65.7 crore.

The March quarter was softer on profitability. Q4 FY26 revenue was INR 183.7 crore, up 3.6% year on year, but EBITDA declined to INR 53.0 crore and PAT fell to INR 11.9 crore. In the call, management attributed part of the pressure to cancellations in Delhi and Hyderabad due to the war and tension in the Middle East, along with higher depreciation and finance costs.

The company’s investment case continues to be built around a lifestyle-led hospitality model. In the investor presentation, the FY26 revenue mix was shared as 50% rooms, 43% food and beverage, and 7% others. That mix is unusual for a listed hotel operator and ties directly to ASPHL’s focus on restaurants, bars, and nightlife formats across its portfolio.

FY26 performance: revenue up, margins down

Operationally, the company highlighted strong occupancy and pricing. FY26 ARR for owned hotels was reported at INR 8,304, occupancy at 92%, and RevPAR at INR 7,584. The snapshot section also cited a 28% five-year RevPAR CAGR and a 32% five-year revenue CAGR, reflecting the broader upcycle in domestic travel.

At the same time, the consolidated income statement shows the trade-off: operating expenses grew faster than revenue in FY26. Depreciation increased to INR 74.4 crore and interest rose to INR 29.9 crore. These two lines alone explain why EBITDA grew only 4.6% despite a 12% revenue increase, and why PAT declined year on year.

Management also pointed to disruptions during the year. In Q&A, it cited two events that impacted performance: “Operation Sindoor” in Q1 and the Middle East war-related disruption from late February into April. The company argued that even with these disruptions, 12% growth was “very good”.

The operating model: brands, keys, and a large F&B engine

ASPHL’s hotel portfolio is positioned across four brands: THE PARK Hotels, THE PARK Collection, Zone by the Park, and Zone Connect by The Park. As of FY26 end, the company reported 42 hotels with 2,677 keys across 32 cities and union territories.

It also disclosed the ownership structure: 8 owned hotels (1,115 keys), 27 managed hotels (1,226 keys), and 7 leased hotels (336 keys). The asset-light managed model is already a large part of the network.

The differentiator, according to management, is not only room performance but total revenue per room. The company repeatedly emphasised that it operates a large portfolio of restaurants, nightclubs, and bars, and that beverage and entertainment revenues are meaningful in certain markets.

Food and beverage revenue was reported at INR 303.8 crore in FY26 (INR 2,663 million to INR 3,038 million in the presentation series). In the call, the MD said F&B revenues crossed INR 300 crore in FY26 and contributed about 43% of total revenue.

Pipeline to FY30: a scale-up led by managed hotels

The clearest strategic disclosure in the presentation is the FY30 roadmap.

The company shared a consolidated view of the “future hospitality portfolio” at 6,635 keys by FY30, up from 2,677 keys today. It also quantified the mix: owned keys of 2,112, managed keys of 4,040, and leased keys of 483.

This matters because it signals capital allocation intent. Management explicitly stated it expects a 2x growth in owned hotels and a 3x growth in the asset-light model under Zone and Zone Connect over the next four years.

Near-term, the FY27 development update slide guides to 12 hotels and 472 keys additions, split into 1 owned, 3 leased, and 8 managed.

Project execution, however, remains a variable. A key example is Vizag, where management stated environmental clearance delays pushed the timeline, and the company now shows completion as early 2030.

EM Bypass Kolkata: apartment monetisation and cash flows

The EM Bypass Kolkata project combines a 218-room hotel with 69 serviced apartments. The investor presentation states approvals are in place and provides apartment sales metrics: 29 apartments booked (42% of total), with average realisations of INR 20,857 per square foot including parking.

The same page estimates gross sale proceeds of INR 626.26 crore for all units and INR 257.67 crore for booked units, while disclosing that ASPHL share received is INR 11.11 crore.

In the concall, management linked this directly to cash flow. It stated cash flows improved by over INR 11 crore up to April 2026 due to apartment sales, and guided to close to INR 70 crore additional cash flow improvement during the course of the year. It also indicated the second apartment block could be launched in September-October.

Flurys: growth, expansion, and a revised execution model

Flurys has become a separate growth vector inside the group. FY26 total income from Flurys was reported at INR 82.9 crore, up from INR 64.3 crore in FY25. Store count reached 110 at FY26 end.

Management guided to add more than 30 outlets over the next 10 months and named specific market entries: NCR (8 outlets), Pune (5 outlets), and Bangalore (4 outlets). It also said expansion will be largely in cafe format, with one or two flagship stores per new market.

A notable change disclosed in Q&A is the shift away from building a central kitchen in Delhi. Management said it has dropped that plan and will outsource manufacturing to a vendor, describing this as a faster, more asset-light path that avoids a 20 to 30 crore factory investment. It also said quality checks and recipe standardisation will be implemented at the production facility.

The company did not disclose Flurys segment margins, and management explicitly said it does not share segment analysis, beyond stating Flurys is profitable.

Key investor takeaways

ASPHL’s FY26 results show a business that is scaling, but also absorbing higher costs from expansion and financing. Revenue growth remains healthy, occupancy is strong, and the company continues to present itself as an industry leader in RevPAR across its upper-upscale peer set.

The medium-term story is now centred on execution: delivering a large managed-hotel pipeline, monetising the EM Bypass apartment inventory to strengthen cash flows, and scaling Flurys with a revised, outsourced production model. Investors will likely watch for two proof points in the next year: margin stabilisation as disruptions ease, and whether the FY27 addition of 12 hotels and 472 keys lands on schedule.