Chalet Hotels Limited core EBITDA rises 13.5% in Q2 FY27

Chalet Hotels Limited increased core EBITDA by 13.5% year on year to Rs 227.4 crore in Q2 FY27, while core margin expanded 110 basis points to 44.5%, as higher hotel room rates and 22.0% rental-annuity revenue growth offset a fall in hospitality occupancy to 64.2%.

How did CHL's core operations perform in Q2 FY27?

CHL's core operations, excluding residential activities, reported total income of Rs 511 crore in Q2 FY27, up 10.7% from Rs 461.7 crore in Q2 FY26. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose faster than income, increasing from Rs 200.4 crore to Rs 227.4 crore and lifting the margin to 44.5% from 43.4%.

Against the preceding Q1FY26 period reported in the release, core income was 0.6% lower than Rs 514 crore and EBITDA was 5.2% lower than Rs 240 crore. Core margin declined 220 basis points sequentially from 46.7%, contrasting with the 110-basis-point year-on-year expansion. A basis point is one-hundredth of a percentage point.

CHL's consolidated total income was Rs 511.4 crore, down 31.2% from Rs 743.8 crore in Q2 FY26, while consolidated EBITDA declined 26.2% to Rs 227 crore from Rs 307.7 crore. The core comparison excludes residential activities, whereas the consolidated figures include them. Consolidated EBITDA margin nevertheless rose 300 basis points to 44.4% from 41.4%.

Why did CHL's hospitality earnings rise despite lower occupancy?

CHL's hospitality EBITDA increased 11.2% to Rs 169.1 crore because a 11.3% rise in average daily rate, or ADR, to Rs 13,546 exceeded the effect of lower occupancy. Occupancy fell to 64.2% from 66.7%, but revenue per available room, or RevPAR, increased 7.2% to Rs 8,702 from Rs 8,115.

Management said reduced air connectivity and higher airfares affected certain business-travel markets during Q2 FY27. It said leisure properties delivered 34% RevPAR growth, supported by improvements in occupancy and room rates. CHL also rebranded its Navi Mumbai business hotel as ATHIVA Pulse, Navi Mumbai - Autograph Collection.

Hospitality revenue grew 8.2% to Rs 411.5 crore from Rs 380.2 crore, while segment EBITDA margin rose 110 basis points to 41.1%. Sequentially, hospitality revenue was 1.7% lower than Rs 418.5 crore in Q1FY26 and EBITDA was 5.2% lower than Rs 178.4 crore, although RevPAR was 1.4% higher than Rs 8,582.

What contribution did rental annuity make to CHL's growth?

CHL's rental-annuity business was its faster-growing operating segment in Q2 FY27, with income rising 22.0% to Rs 90.1 crore and EBITDA increasing 23.5% to Rs 75 crore. The segment's EBITDA margin rose 90 basis points to 83.2% from 82.3%, while occupancy stood at 91%.

The monthly rental-annuity revenue run-rate reached Rs 30 crore in September 2026, up from Rs 29 crore in June 2026. Q2 income was also 4.1% above Rs 86.5 crore in Q1FY26, and EBITDA was 2.0% higher than Rs 73.5 crore. However, the margin was below the preceding quarter's 85.0% by 170 basis points.

Rental annuity generated Rs 75 crore of EBITDA from Rs 90.1 crore of income, compared with hospitality EBITDA of Rs 169.1 crore on Rs 411.5 crore of income. The disclosed segment margins of 83.2% for rental annuity and 41.1% for hospitality explain why the annuity segment accounted for a larger share of core EBITDA than of core income.

Why was CHL's consolidated profit after tax higher?

CHL reported consolidated profit after tax, or PAT, of Rs 216.3 crore in Q2 FY27, up 39.7% from Rs 154.8 crore, despite lower consolidated EBITDA and profit before tax. Profit before tax fell 39.4% to Rs 124.1 crore from Rs 204.9 crore, while the tax line was Rs 92.1 crore compared with negative Rs 50.1 crore a year earlier.

The company said PAT was affected by a Rs 112.5 crore tax credit recorded in the quarter. CHL opted for the concessional tax regime under Section 206 of the Income Tax Act, 2025, formerly Section 115BAA of the Income-tax Act, 1961, at a stated rate of 25.17% rather than 34.94%.

CHL remeasured its opening net deferred-tax liabilities as at April 1, 2026, resulting in the tax credit, and said tax expense for the quarter and six months ended September 30, 2026 was not comparable with other reported periods. On September 7, 2026, it also acquired 100% of Lakeview Mercantile Company Private Limited for net consideration of Rs 99.2 crore, accounted for as an asset acquisition rather than a business acquisition.

What milestones has CHL set for its development pipeline?

CHL expects CIGNUS II in Powai, Mumbai to reach substantial completion by the end of FY27 and Taj Delhi International Airport in New Delhi to open in early FY28. Management described both projects as progressing towards completion, making these targets forward-looking development milestones rather than current operating results.

At The Ritz-Carlton, Hyderabad, foundation work is under way and guest-room interior design has started. CHL said 70% of foundation work at Hyatt Regency, Airoli, Navi Mumbai had been completed, with waterproofing in progress. It said branding for the Udaipur Resort's expansion potential remained under evaluation.

CHL reported 11 operating hotels and resorts with 3,389 keys and about 2,036 rooms under development. Its commercial real-estate platform is growing from 2.4 million square feet to 3.3 million square feet, supporting the rental-annuity business that generated Rs 90.1 crore of Q2 FY27 income.

Conclusion

CHL's Q2 FY27 core performance showed EBITDA growth of 13.5% to Rs 227.4 crore and a 44.5% margin, driven by higher room rates and rental-annuity income growth. Hospitality RevPAR increased 7.2% despite a 2.4-percentage-point occupancy decline, while rental-annuity revenue rose 22.0%. The 39.7% increase in consolidated PAT was affected by a Rs 112.5 crore deferred-tax credit.

The next disclosed milestones are substantial completion of CIGNUS II by the end of FY27 and the planned early-FY28 opening of Taj Delhi International Airport. CHL's future updates may also show whether September 2026's Rs 30 crore monthly rental-annuity run-rate, the 34% leisure RevPAR growth cited by management, and the ATHIVA pipeline continue to support core income and margins.