Chalet Hotels targets ₹2,000 crore revenue in FY26

Revenue outlook: double-digit growth target

Chalet Hotels has guided for double-digit revenue growth in FY26, supported by demand across its hospitality portfolio and a scaling annuity (office leasing) business. The company expects FY26 revenue to exceed ₹2,000 crore, compared with about ₹1,700 crore in FY25. Management commentary also indicated that occupancy and room rates are expected to improve further in the coming quarters. While the company acknowledged some cancellations in May due to geopolitical uncertainty, it still reported a 12% year-on-year revenue rise for that month. The outlook is also linked to asset ramp-ups and new inventory coming into operations. Chalet’s model combines hotel operations with commercial rentals, which can stabilise cash flows in periods of travel demand volatility.

May cancellations, but growth held up

The company said it saw a few cancellations in May amid geopolitical uncertainty. Even with that, it recorded 12% year-on-year revenue growth in May 2025, which it described as a sign of resilience. The comment matters because the hotel industry can see short booking cycles and demand swings around events and disruptions. Chalet’s performance in May is being read alongside strong Q4FY25 numbers, where pricing improved sharply. The company also flagged that demand remains supported by both business and leisure travel. It cited corporate travel, weddings and leisure as key drivers during FY25, after a relatively slow start linked to the election period.

FY25 base: revenue up, profitability mixed

For FY25, Chalet Hotels reported revenue from operations of ₹1,717.82 crore, up 21.21% year-on-year. Full-year net profit fell 48.75% to ₹142.56 crore, with the company attributing the decline to higher operating expenses and one-time tax adjustments. Even so, management described FY25 as its strongest year to date in terms of operating performance. A key milestone highlighted was that hospitality revenue crossed ₹1,500 crore for the first time, alongside a strong EBITDA margin in the segment. The combination of pricing power and cost control was a recurring theme in the company’s commentary.

Q4FY25: strong quarter led by room rates

In Q4FY25, Chalet reported revenue from operations of ₹521.97 crore, up 24.8% year-on-year. Net profit rose 50.2% to ₹123.85 crore, while profit before tax (PBT) increased 60.39% to ₹158.82 crore. EBITDA increased 36% year-on-year to ₹256.9 crore, and the EBITDA margin improved to 47.8% from 44.5% a year ago. The company also reported consolidated total income of ₹537.4 crore for the quarter. The quarter was supported by higher room rates and steady occupancy, with contributions from the rental/annuity business.

Operating metrics: ARR, occupancy and RevPAR

Chalet’s average room rate (ARR) rose 21% year-on-year to ₹14,345 in Q4FY25. Same-store ARR was ₹14,158, up 19% year-on-year. Occupancy increased by 30 basis points to 76% compared with 75.7% a year earlier. Revenue per available room (RevPAR) increased 21% year-on-year to ₹10,909. In parallel commentary, the company flagged that ARRs improved 21% in Q4FY25 and expects this to support margin expansion in FY26. It also indicated that stabilised hotels could see a slight uptick in occupancy levels.

Annuity (office leasing): ₹300 crore annual run-rate target

The annuity business is a key part of Chalet’s FY26 revenue visibility. The company said exit rental rates were about ₹21 crore in March 2025 and were projected to rise to about ₹25 crore in May, translating to about ₹300 crore annually. It also said around 95% of rental income flows through to the bottom line, reflecting high operating leverage in this segment. In Q4FY25, revenue from the rental/annuity business stood at ₹61.9 crore, up 75% year-on-year. The company disclosed overall committed leasing of 77% and leased space of 71% in its office assets.

Room inventory: 3,300-plus keys with more coming

Chalet is expanding room capacity, which it expects to support growth over FY26 and beyond. The company said it has around 3,300 rooms in operation and about 1,250 rooms in the pipeline. It also stated that room inventory will rise by about 30%, with over 1,200 new rooms expected to be added. During Q4FY25, Chalet acquired The Westin Resort & Spa, Himalayas, adding 141 keys to the portfolio. It also expanded Marriott Hotel Whitefield in Bengaluru with 121 keys, which became operational from May 2025 (Q1FY26). The company said the renovation and expansion of The Dukes Retreat, Khandala is set for completion in H1FY26.

Project pipeline and upcoming completions

Chalet flagged specific projects scheduled for completion in FY27, including Taj at the T3 Terminal, Delhi International Airport (385-390 rooms) and CIGNUS POWAI Tower II in Mumbai. Separately, it entered into a binding term sheet to acquire Lakeview Mercantile Company Private, the owning entity of a land parcel at Bambolim in Goa with potential for a hotel development of around a 170-room luxury resort. The proposed acquisition consideration for Lakeview is ₹136.9 crore. The company also spoke about expanding its presence in markets like Goa and Rishikesh as part of portfolio diversification.

Balance sheet and funding: net debt near ₹2,000 crore

Chalet’s net debt stands just under ₹2,000 crore after recent acquisitions, according to the company. It has secured board approval to raise ₹1,000 crore in the future if growth opportunities arise. However, the company indicated that most of its current expansion pipeline is expected to be funded through internal cash flows. It also expects capex of about ₹2,300 crore (₹23 billion) over the next two to three years, with the majority planned through internal accruals. Management also indicated an aim for meaningful debt reduction over the next two years.

Market reaction and what investors will track

After the Q4FY25 results, Chalet Hotels stock moved up 2.43% to ₹886.60 in the reported session. For investors, near-term monitoring points include how quickly new keys stabilise, whether ARR gains sustain, and the pace at which office rentals move toward the ₹300 crore annual target. The company’s FY26 revenue goal of over ₹2,000 crore depends on both operating performance in hotels and the ramp-up of annuity income. Execution on the stated completion timelines for H1FY26 and FY27 projects will also be relevant to expectations around future revenue growth.

Key numbers at a glance

Conclusion

Chalet Hotels is entering FY26 with a clear growth plan anchored on higher room rates, steady occupancy and a growing office leasing annuity stream. The company has guided for more than 10% revenue growth, with revenue expected to exceed ₹2,000 crore in FY26. Over the next few quarters, investors are likely to focus on how quickly new hotels and expansions ramp up and whether rentals progress toward a ₹300 crore annual run-rate. The company has also outlined project milestones, including Dukes Retreat upgrades in H1FY26 and larger completions targeted for FY27, which will shape the medium-term growth trajectory.