Brigade Hotel Ventures plans Rs 400-450 crore in H2 capex

Brigade Hotel Ventures Limited expects to deploy Rs 400 crore to Rs 450 crore in H2 FY27, including capital earmarked for an unidentified acquisition, while management expects peak net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) of 3.5 to 4 times in FY28-FY29 as construction activity rises.

How much will Brigade Hotel Ventures spend in H2 FY27?

Brigade Hotel Ventures expects H2 FY27 capital expenditure of Rs 400 crore to Rs 450 crore, according to Chief Financial Officer Ananda Natarajan. The range includes capital set aside for an unidentified acquisition, meaning part of the planned deployment is not yet tied to a named hotel or signed transaction. Management had spent Rs 84 crore during H1 FY27.

The H2 outlay would follow Rs 484 crore deployed through September 2026 from the company’s total planned expansion capex of Rs 3,600 crore. In response to an analyst, Managing Director Nirupa Shankar said the pace would pick up in the second half, although the year’s spending could be about Rs 400 crore rather than the earlier Rs 450 crore expectation because of a slight delay.

The planned H2 spend is materially higher than the Rs 84 crore incurred in H1 FY27, but it does not establish an exact full-year run rate because management gave a range and indicated timing may shift. The company therefore has both development spending and acquisition funding within the same H2 capital plan, while the acquisition itself remains unidentified.

Which projects will Brigade Hotel Ventures fund next?

Brigade Hotel Ventures has 1,700 keys under development and aims to expand its portfolio to 3,300 keys by FY31. Its stated Rs 3,600 crore programme is anchored by Grand Hyatt, InterContinental, JW Marriott and Ritz-Carlton projects across Chennai, Hyderabad, Kochi and Bangalore, with Rs 484 crore invested by September 2026.

The nearest scheduled opening is the 45-key Courtyard by Marriott Chennai at World Trade Center, which management said remains on track for H2 FY27. Management also said the two Fairfield by Marriott hotels, at BIAL and Brigade Valencia in Bangalore, are expected to open towards the end of FY28 after civil work and interior fit-outs.

Construction spending is expected to rise more substantially in FY28, for which management has allocated Rs 700 crore. The planned pipeline would also change the portfolio mix: luxury and upper-upscale hotels are expected to represent 31% by FY29 and 38% by FY31, compared with 14% at the time of the call.

What leverage does Brigade Hotel Ventures expect at peak debt?

Brigade Hotel Ventures expects net debt to EBITDA of 3.5 to 4 times at peak debt in FY28-FY29, according to Natarajan. This is a management expectation for the period when construction funding rises, rather than a current reported leverage ratio, and it followed an analyst’s question on whether the peak would occur in FY28 or FY29.

Management also said debt service coverage ratio, or DSCR, should remain around 2 to 2.5 times. DSCR measures the cash available to meet debt-service obligations relative to those obligations. Shankar said this range means management does not expect debt servicing to be a problem, but the transcript does not disclose the debt amount, repayment timetable or EBITDA assumptions behind the projected peak ratio.

The forecast contrasts with Brigade Hotel Ventures’ position at September 30, 2026, when it reported net cash of Rs 29 crore. The expected move from net cash to a peak net-debt-to-EBITDA range reflects the funding requirements of the development programme, including the Rs 400 crore to Rs 450 crore H2 FY27 outlay and planned FY28 construction acceleration.

What has changed in Brigade Hotel Ventures’ financing position?

Brigade Hotel Ventures used Rs 468 crore of initial public offering proceeds to repay debt, and its Q2 FY27 finance cost fell to Rs 9.7 crore from Rs 13.5 crore in Q2 FY26. The company also refinanced a loan from an unsecured facility carrying 10.25% interest to a secured facility at 8.1%, according to the CFO.

Lower financing costs coincided with higher quarterly profitability. Q2 FY27 EBITDA rose to Rs 52 crore from Rs 41 crore a year earlier, while profit after tax doubled to Rs 22 crore from Rs 11 crore. Total income increased 10% to Rs 142 crore, and the EBITDA margin was 36.7%, despite management citing a 1.4% impact from Goods and Services Tax 2.0 on the quarter’s margin.

For H1 FY27, EBITDA rose 18% year on year to Rs 98 crore on total income of Rs 273 crore, while profit after tax was Rs 39 crore against Rs 18 crore in H1 FY26. These reported results show an improved earnings and interest-cost position before the heavier planned capital deployment, but management did not provide a revised FY27 debt figure.

When could Brigade Hotel Ventures make an acquisition?

Brigade Hotel Ventures is actively evaluating multiple acquisitions and has made the unidentified opportunity a priority for the next two to three quarters, management said. The company is looking in markets where it does not currently operate, including prime business or strong leisure locations, while its existing development activity is concentrated in markets such as Chennai, Hyderabad, Kochi and Bangalore.

No acquisition has been finalised because management said suitable hotel assets are difficult to secure at the required value and return criteria. Shankar cautioned that documentation and due diligence could push a transaction by a quarter or two, so the inclusion of acquisition capital in the Rs 400 crore to Rs 450 crore H2 plan should not be read as confirmation that a deal will close within H2 FY27.

Management separately said that hotels being developed in certain Brigade Enterprises mixed-use projects could enter Brigade Hotel Ventures’ portfolio at a later stage. Two Hyatt Regency-branded Bangalore hotels, with about 350 rooms and 250 keys respectively, are expected to start construction within the next two to three quarters, but management did not commit to a date for their transfer to Brigade Hotel Ventures.

Conclusion

Brigade Hotel Ventures has outlined a funding transition from a Rs 29 crore net-cash position at September 2026 toward a projected 3.5 to 4 times peak net-debt-to-EBITDA range in FY28-FY29. The change is linked to a Rs 3,600 crore development programme, Rs 400 crore to Rs 450 crore of H2 FY27 spending and possible acquisition funding, following Rs 468 crore of debt repayment from initial public offering proceeds.

The next markers are the planned H2 FY27 opening of the 45-key Courtyard by Marriott Chennai, the pace of FY28 construction spending allocated at Rs 700 crore, and whether an acquisition is finalised within management’s stated next two-to-three-quarter priority window. Brigade Hotel Ventures also intends to maintain mid-teens revenue and EBITDA growth guidance while expecting better second-half revenue per available room growth.