BHVL keeps mid-teens H2 FY27 growth target after Q2 recovery

Brigade Hotel Ventures Limited is maintaining its mid-teens H2 FY27 revenue and EBITDA growth objective after Q2 FY27 consolidated income increased 10% year on year to Rs 142 crore, with food-and-beverage revenue also rising 10% to Rs 46 crore as meetings, incentives, conferences and exhibitions activity recovered.

Why is BHVL retaining its H2 FY27 growth target?

BHVL is retaining its mid-teens objective for H2 FY27 revenue and EBITDA growth rather than increasing it. Management said revenue per available room, or RevPAR, should be broadly in line with that range after RevPAR grew 10% year on year in Q2 FY27 and 9% in H1 FY27. It did not provide a specific H2 RevPAR forecast.

The company cited the Q1 FY27 disruption as the reason to keep the existing range. Management said cancellations related to the West Asia crisis affected nearly Rs 14 crore, or almost 10%, of Q1 top line. Nirupa Shankar said BHVL must make up that impact before considering whether it has exceeded the guidance.

Q2 FY27 provided a better operating base than H1 FY27. Consolidated income rose 10% in Q2, compared with 7% growth to Rs 273 crore in H1, reflecting the different Q1 and Q2 trends. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 18% to Rs 98 crore in H1, while profit after tax increased 122% to Rs 39 crore from Rs 18 crore in H1 FY26.

How did BHVL's MICE and food-and-beverage business recover?

BHVL said food-and-beverage and MICE business returned to growth in Q2 FY27 after food-and-beverage declined in Q1 FY27. Food-and-beverage revenue increased 10% to Rs 46 crore in Q2, matching the 10% rise in room revenue to Rs 87 crore. Vinay Gupta said the two quarters had different trend lines and that the company had returned to normal growth in Q2.

Management identified Electronica and Space Expo as events that supported the recovery during Q2 FY27. For Q3 FY27, it pointed to a greater number of favourable wedding dates than last year and said several large citywide conferences had already sold out hotels. It also expects large conferences in Q4 FY27, while Gupta said the Q3 increase in conferencing typically continues into Q4.

The Q2 rebound did not erase the H1 comparison. H1 FY27 food-and-beverage performance reflected a Q1 decline, while total income growth was 7%, below the Q2 10% rate. Management nevertheless said the wedding calendar, conference pipeline and post-cancellation MICE recovery support better business conditions in the final two quarters of FY27.

Can BHVL improve RevPAR in the second half?

BHVL expects H2 FY27 RevPAR growth to improve as occupancy recovers at repositioned hotels and average room rates continue to rise. Average room rate, or ARR, increased 11% year on year to Rs 7,876 in Q2 FY27, while occupancy was 75.2%, producing RevPAR of Rs 5,922. In H1 FY27, ARR was Rs 7,559, occupancy was 75.4%, and RevPAR was Rs 5,702.

The Courtyard hotel in Kochi has reduced portfolio occupancy during its repositioning from Four Points, according to management. Its occupancy had been in the mid-80% range, fell to 40% in H1 FY27 and then improved to 66% in Q2 FY27. BHVL raised rates by 17% and displaced lower-paying accounts; management expects the property to stabilise over the next two to three quarters.

The portfolio's regional trends also vary by asset maturity. Bengaluru has mature, stable hotels with optimised occupancy, Gupta said, whereas ibis Styles Mysore is a two-year-old hotel expected to reach stabilised occupancy next year. BHVL said GIFT City occupancy was moving towards the higher 70s, while some smaller hotels delivered rate increases of 20% to 30%, compared with marginal rate growth at Sheraton Grand.

What spending, openings and acquisition plans does BHVL have?

BHVL expects to deploy Rs 400 crore to Rs 450 crore in H2 FY27 from an approximately Rs 3,600 crore capital-expenditure programme, including capital earmarked for an unidentified acquisition. It had deployed Rs 484 crore to date, including Rs 84 crore during H1 FY27. Management said the H2 outlay may be nearer Rs 400 crore because of slight delays, while Rs 700 crore is allocated for FY28 as construction activity accelerates.

The next addition is a 45-key Courtyard hotel expected at the end of Q3 FY27 or early Q4 FY27. Management said the hotel will initially be in ramp-up and therefore is not expected to materially alter FY27 guidance. Two Fairfield by Marriott hotels, at BIAL and Brigade Valencia in separate Bengaluru micro-markets, are expected to open towards the end of FY28 after civil work and interior fit-outs.

BHVL is examining acquisition opportunities in markets where it does not currently operate, including prime business and strong leisure locations. Management said an unidentified acquisition is a priority over the next two to three quarters, but no transaction has been finalised and documentation or due diligence could push a deal out by one or two quarters. As of September 30, 2026, BHVL reported net cash of Rs 29 crore.

How has BHVL's financing position changed?

BHVL's Q2 FY27 finance costs fell to Rs 9.7 crore from Rs 13.5 crore in Q2 FY26 after the company used Rs 468 crore of initial public offering proceeds for debt repayment. The company also refinanced a loan from an unsecured facility carrying 10.25% interest to a secured facility at 8.1%, according to management.

The lower finance cost contributed to Q2 FY27 profit after tax of Rs 22 crore, compared with Rs 11 crore a year earlier. EBITDA was Rs 52 crore, up from Rs 41 crore in Q2 FY26, and the EBITDA margin was 36.7%. Management said Goods and Services Tax 2.0 reduced the quarter's EBITDA margin by 1.4 percentage points.

Management expects net debt to EBITDA to be 3.5 to 4 in FY28 or FY29, when it expects peak debt, and said debt-service coverage ratio would remain around 2 to 2.5. Those are management expectations tied to the development programme, rather than reported FY27 financial outcomes.

Conclusion

BHVL's maintained H2 FY27 target rests on a Q2 recovery in rooms, food-and-beverage and MICE activity, while management continues to account for nearly Rs 14 crore of Q1 cancellations. The company reported 10% Q2 income growth and 27% EBITDA growth, but is not raising its mid-teens objective until the first-quarter impact has been recovered.

The next markers are business activity from the second week of November, Q3 wedding demand and Q4 conferences, including citywide events that management says have sold out hotels. Investors can also watch whether the 45-key Courtyard opens by early Q4 FY27, whether H2 capital expenditure approaches Rs 400 crore to Rs 450 crore, and whether BHVL finalises its unidentified acquisition within the next two to three quarters.