Chalet Hotels Q4 FY25: Buy Call, TP Raised to ₹1,130

What changed after Q4FY25 results

Prabhudas Lilladher (PL) reaffirmed its ‘Buy’ rating on Chalet Hotels Ltd after the company reported a strong Q4FY25 performance. The brokerage also raised its target price to ₹1,130, citing RevPAR growth, operating leverage and a supportive demand environment. Chalet’s quarter reflected improved profitability and a higher contribution from its annuity portfolio. The stock was cited as trading at ₹875 at the time of the note, implying upside to the revised target price. PL said it sees stronger visibility on earnings as the company expands across hospitality and annuity assets. The commentary also pointed to improving returns metrics such as RoCE, driven by better utilisation and cost control.

Headline numbers: revenue, EBITDA and PAT

Chalet reported a 24.8% year-on-year rise in consolidated revenue to ₹522 crore in Q4FY25. Hospitality revenue increased 20.2% YoY, while annuity income grew 75.1% YoY, highlighting the fast scaling of the commercial leasing portfolio. EBITDA rose 32% YoY to ₹241.4 crore, and the EBITDA margin expanded 260 bps to 46.3%, which PL said exceeded its estimate. Profit after tax (PAT) increased 50.2% YoY to ₹123.8 crore, reflecting operating improvements and cost optimisation. Separately, some company performance summaries also referenced consolidated total income of ₹537 crore and consolidated EBITDA of ₹257 crore for the quarter, indicating slightly different line items and classification across sources. But the core takeaway across disclosures remained consistent: margin expansion and higher earnings growth than revenue.

Operating metrics: RevPAR, occupancy and room pricing

The quarter was supported by stronger pricing and steady volumes. RevPAR was reported at ₹10,909 in Q4FY25, up 21% YoY, with performance drivers cited across Pune, Bengaluru and the Mumbai Metropolitan Region (MMR). Occupancy was reported at 76% for the quarter, improving from 71% a year ago in PL’s summary table. Average Room Rate (ARR) was disclosed at ₹14,345, up 21% YoY, reflecting pricing power in a tight demand-supply environment. Management commentary in the provided notes also referenced resilience despite geopolitical developments, with May 2025 revenue reported up 12% YoY.

Annuity segment: higher margins and rising occupancy

Chalet’s annuity segment emerged as a key driver of consolidated profitability in Q4FY25. Annuity revenue was reported at ₹61.9 crore (₹619 million), up 75% YoY, and the annuity margin was cited at 80.4% in one of the performance summaries. Management indicated that annuity occupancy is projected to reach around 90% over the next two to three quarters. Asset-level occupancy data in the notes showed Sahar at 98% occupancy, the new Bengaluru asset at 70%, and Cignus Powai Tower 1 at 57%. The combination of rising occupancy and high incremental margins is important because it supports EBITDA growth without a proportionate rise in operating costs.

Expansion pipeline: keys addition and new projects

Chalet outlined a multi-city expansion plan across leisure and metro markets. The company plans to add around 450 keys in Khandala and Delhi, with longer-term expansions mentioned in Goa, Airoli and Kerala. Total key count is expected to cross 4,500 over the next four to five years, based on the concall highlights provided. The Bambolim (Goa) project is expected to complete in about three years, with management indicating higher capex per key than the Varca property. The notes also stated that Chalet acquired The Westin Resort & Spa, Himalayas with 141 keys, strengthening its position in leisure and wellness tourism. In Bengaluru, the Marriott Hotel Whitefield expansion of 121 keys was stated to be operational from May 2025 (Q1FY26).

Capex, funding and balance sheet signals

To support its pipeline, Chalet anticipates capex of about ₹2,300 crore (₹23 billion) over the next two to three years, with the majority expected to be funded through internal accruals. During FY25, the company deployed ₹1,100 crore (₹11 billion) of capex, described as the highest in a single year in the provided notes. Chalet also passed an enabling resolution to raise ₹1,000 crore (₹10 billion) via non-convertible debentures (NCDs) and commercial papers (CPs), aimed at ensuring liquidity for expansion. The company’s cost of debt was reported as marginally lower at 8.35% in April 2025, with expectations of further downward revision in May.

Real estate update: Koramangala project nearing completion

The Koramangala residential project was described as nearly complete, with 92% of flats sold. The notes also mentioned ₹410 crore (₹4.1 billion) in receivables from this project. In Q4FY25, the company’s real estate segment recorded sales of 23 apartments, with an average selling price of ₹19,800 per square foot. While hospitality and annuity remain the primary earnings engines in the quarter’s discussion, the residential monetisation provides another source of cash flows that can support the capex cycle.

Valuation framework used by Prabhudas Lilladher

PL’s valuation approach in the provided text values Chalet’s hotel business at 24x FY27E EV/EBITDA. It values annuity assets at an 8.5% cap rate and residential assets at NAV of ₹29 per share. On earnings trajectory, the note stated FY25–FY27E EBITDA and PAT are projected to grow at 23% and 32% CAGR, respectively. The brokerage maintained its ‘Buy’ rating, pointing to earnings visibility, improving RoCE and execution on expansion initiatives.

Key financials snapshot (Q4FY25 vs Q4FY24)

Why the quarter mattered for investors

The Q4FY25 print reinforced two themes that matter for Chalet’s near-term narrative: pricing-led growth in hotels and margin-accretive scaling in annuity assets. The reported uplift in ARR and RevPAR shows Chalet’s ability to sustain rate growth while maintaining healthy occupancy. At the same time, the annuity portfolio’s higher margins provide operating leverage, which was visible in the expansion in consolidated EBITDA margins. Funding plans also featured prominently, with a large capex pipeline and an enabling debt resolution intended to preserve flexibility. The next set of updates investors are likely to track include project execution timelines, ramp-up of new keys, and progress toward the annuity occupancy targets cited by management.

Conclusion

Chalet Hotels’ Q4FY25 results showed strong year-on-year growth in revenue, EBITDA and PAT, supported by RevPAR expansion and faster growth in annuity income. Prabhudas Lilladher maintained a ‘Buy’ rating and raised its target price to ₹1,130, citing visibility on earnings and the expansion pipeline. The company has outlined capex and funding steps for the next phase of growth, including planned additions to hotel keys and continued ramp-up in commercial occupancy. Near-term updates will likely focus on execution milestones such as the Goa pipeline timeline and the performance of newly added inventory, including the May 2025 operational start of the expanded Bengaluru property.