SAMHI Q4 FY2026: Growth held up through disruptions as free cash flow compounds

SAMHI Hotels closed Q4 FY2026 with growth that largely held up even as the quarter absorbed the sharpest disruption of the year. Consolidated total income rose to ₹3,535 million, up 9.3 percent year on year, while same store growth was 6.4 percent. Same store RevPAR increased 4.1 percent to ₹6,041, a reminder that underlying demand in SAMHI’s core city markets remained intact.

Profitability looks weaker on the headline, but the company provided a clear bridge for what changed. Consolidated EBITDA fell 6.0 percent year on year to ₹1,202 million, with margin at 34.0 percent versus 39.5 percent a year ago. Management attributed the decline to a mix of a GST regime change that reduced input credit, one off costs such as FF and E expensed through the P and L, and the March geopolitical shock that hit inbound travel and certain corporate contracts.

Reported PAT for the quarter jumped to ₹3,994 million, up 770.8 percent year on year. This number is not a clean operating indicator because it includes deferred tax income of about ₹3,000 million and other exceptional items. The more useful frame is operating momentum and cash generation. For FY2026, SAMHI generated about ₹3,000 million of free cash flow post interest, versus about ₹900 million at IPO. That cash compounding is now central to the equity story.

A year that beat guidance, but not without scars

FY2026 was presented as a year of resilience: income grew 12.3 percent year on year to ₹12,790 million, ahead of the guided 9 to 11 percent range. Consolidated EBITDA rose 8.8 percent to ₹4,626 million. Management also quantified what could have been. Across four disruption events and the GST impact, the company estimates income loss of ₹440 to ₹520 million for the year. On that basis, potential income growth could have been 16 to 17 percent, and potential EBITDA growth 19 to 20 percent.

The misses are important because they help separate structural issues from temporary ones. Q4 was the most affected quarter. Revenue growth ran at about 10.6 percent year on year through February, but slipped in March as the Middle East conflict led to cancellation of inbound foreign FITs, disruption to airline crew and MENA contracts, and deferral of MICE. Asset revenue growth in March was 6.3 percent year on year, pulling the quarterly average down.

On the cost side, the GST change from 12 percent with input tax credit to 5 percent without ITC compressed reported EBITDA growth. Management estimated the GST change cost about ₹180 million on EBITDA for FY2026, with Q4 hit hardest because a larger number of room nights were sold below ₹7,500 due to the Gulf crisis effects on demand mix.

At the same time, the company highlighted a cleaner operating picture once these temporary factors are adjusted out. For Q4, SAMHI estimated an EBITDA loss of around ₹290 million versus the potential quarter. Reported Q4 EBITDA of ₹1,202 million could have been about ₹1,493 million absent the GST impact, FF and E and other one offs, and the Middle East disruption. That implied a potential year on year EBITDA growth of 16.8 percent for the quarter on an adjusted basis.

Balance sheet repair is changing the cash flow shape

The clearest shift in the SAMHI model since listing has been balance sheet repair and lower interest cost. Net debt was about ₹18,000 million at IPO and stood at ₹14,507 million as of March 31, 2026. Effective interest rate fell to 7.9 percent as of May 19, 2026, around 290 basis points lower than post IPO levels. Net annualized interest run rate fell from about ₹2,400 million at IPO to about ₹1,270 million by March 2026.

Management’s message is that incremental EBITDA now largely flows through to free cash. The bridge it provided is simple: at IPO, with about ₹3,400 million of consolidated EBITDA and about ₹2,400 million of annual interest outflow, free cash post interest was roughly ₹900 million. By FY2026, with proforma consolidated EBITDA around ₹4,700 million and annualized interest outflow around ₹1,450 million, free cash post interest was about ₹3,000 million.

This is also where capital allocation ties into strategy. Since IPO, SAMHI unlocked about ₹9.6 billion through asset sale and primary infusion in subsidiaries, used about ₹6.5 billion for debt reduction, and deployed the balance partly to fund acquisitions and growth. Four non core hotels with about 470 rooms were sold for ₹2,100 million at around 20x average EV to EBITDA. This is not just cleanup. It signals a willingness to recycle capital when returns improve elsewhere.

The bigger event was the GIC partnership. GIC invested about ₹6,000 million with a further about ₹1,500 million committed, and the presentation also references about ₹7,500 million primary infusion for a 35 percent minority stake in a platform of about 1,000 rooms. The partnership covers Courtyard Bangalore ORR, Fairfield Bangalore ORR, Hyatt Regency Pune, and the Westin Tribute Bangalore asset. Beyond the capital itself, the strategic value is that it validates asset quality, strengthens governance confidence, and expands SAMHI’s ability to fund the pipeline without stretching leverage.

Operating momentum by segment and what it implies

SAMHI’s portfolio is built around business travel in large cities, with a multi brand mix. In Q4 FY2026, revenue contribution was 43 percent from Upper Upscale and Upscale, 41 percent from Upper Mid scale, and 16 percent from Mid scale. Segment wise RevPAR growth in the quarter was steady across the portfolio: Upper Upscale and Upscale up 4.1 percent, Upper Mid scale up 5.5 percent, and Mid scale up 1.3 percent.

The segment metrics also show a portfolio that is operating at high occupancy while still growing rate. In Q4, Upper Upscale and Upscale occupancy was 77 percent, with ARR at ₹13,259 and RevPAR at ₹10,146. Upper Mid scale occupancy was 74 percent, ARR at ₹7,852 and RevPAR at ₹5,793. Mid scale occupancy was 76 percent, ARR at ₹4,331 and RevPAR at ₹3,290. The picture is of a portfolio that is not chasing occupancy at the cost of price, even in a disrupted quarter.

City wise RevPAR trends for FY2026 highlight where the earnings engine is strongest. Bangalore RevPAR rose 13 percent to ₹7,089 and Hyderabad rose 9 percent to ₹6,745. Pune increased 12 percent to ₹5,160 and Chennai rose 10 percent to ₹4,353. Delhi NCR fell 9 percent to ₹4,391, with the company attributing the decline to temporary impact from Hyatt Place Gurgaon renovation and out of order rooms reducing occupancy.

The operational efficiency bridge for Q4 shows where margins were absorbed. From asset income of ₹3,454 million, payroll was 15.6 percent, fixed costs 12.2 percent, variable costs 21.2 percent, utilities 5.4 percent, management fees 4.2 percent, lease rentals 1.7 percent, and ownership expenses 3.3 percent. Asset EBITDA was ₹1,262 million, implying a 36.5 percent asset EBITDA margin, before net corporate G and A of ₹60 million took consolidated EBITDA to ₹1,202 million.

Growth pipeline: big boxes plus a leisure adjacence

The most consequential part of the presentation is the next leg of supply. SAMHI is positioning the pipeline as transformative, both in scale and mix.

The company highlighted six key assets with potential to add about ₹10,000 million of incremental revenue on current RevPARs, equivalent to a 78 percent uplift on the current revenue base of ₹12,790 million. These include W Hyderabad (170 rooms, opening Q4 FY27) with potential revenue of about ₹1,500 million, and the Westin and Fairfield combo in Navi Mumbai (700 rooms, opening FY31) with potential revenue of about ₹3,250 million and potential EBITDA of about ₹1,450 million on current market RevPAR.

Other additions include a 260 room mid scale hotel in Hyderabad’s Financial District (opening FY29 to FY30, potential revenue about ₹700 million), an upscale 162 room hotel in Noida in partnership with Ingka Centres (variable lease, opening FY30, potential revenue about ₹900 million), and a new Marriott branded 135 room hotel at Sriperumbudur alongside the existing Fairfield (opening FY30, potential revenue about ₹1,000 million versus current revenue of about ₹4,800 million for the cluster as presented).

A key detail is the capital structure choice. Two of the new developments are structured as long term variable leases, including the Ingka Centres Noida asset and the Hyderabad Financial District hotel. This matches SAMHI’s stated strategy of disciplined equity deployment while expanding presence in core office micro markets.

Alongside the business hotel engine, the company has added a leisure optionality. SAMHI acquired a 70 percent stake in RARE India, a curated platform of 73 hotels with about 1,015 rooms across 15 Indian states and 3 other countries. The plan is to overlay distribution through Marriott Bonvoy via an Outdoor Collection affiliation across India, Nepal, Sri Lanka and Bhutan. The economics are framed as asset light and platform style, with fee income rather than asset ownership. RARE contributed about ₹36 million in FY2026 revenue, and SAMHI presented potential revenue of about ₹1,000 to ₹1,200 million over time.

What investors should take from Q4 FY2026

The quarter itself is best understood as a stress test. The revenue line held up, RevPAR continued to grow, and the company was transparent in quantifying the disruption impact. The EBITDA decline is explainable and partly mechanical, driven by GST and one offs that do not change the underlying demand profile.

The bigger signal is the balance sheet and cash flow trajectory. With net debt to EBITDA around 3.0x to 3.1x and interest cost down to 7.9 percent, SAMHI is entering FY2027 with a cash generation profile that can fund growth without returning to the leverage that constrained the story post IPO. Management has articulated a medium to long term net debt to EBITDA target of around 2.5x, while also committing about ₹22,000 million of capex across the pipeline over the next five years.

Execution risk remains, especially on large developments like Navi Mumbai and the longer dated Bangalore Westin and Tribute timeline. But the strategy is coherent: recycle capital, co invest with institutional partners, add scale in high demand office markets, and build an adjacent leisure distribution platform without heavy balance sheet load.

For investors, the theme coming out of Q4 FY2026 is disciplined execution through volatility. If demand in key commercial markets stays firm and the pipeline comes online broadly on schedule, the combination of higher quality mix, lower interest outflows, and incremental EBITDA conversion to free cash flow is likely to remain the core driver of equity value in the next phase.