Chalet Hotels Growth Story Intact Despite Q4 Demand Pressure: ICICI Securities

Chalet Hotels: Expansion Pipeline Keeps Long-Term Growth Story Intact

Hospitality major Chalet Hotels reported a stable Q4FY26 performance despite temporary geopolitical disruptions impacting travel demand during March 2026. According to analysis by ICICI Securities, the company’s long-term growth trajectory remains strong due to its aggressive hotel expansion pipeline and improving annuity income visibility.

CMP: Rs. 753 | Target Price: Rs. 1081 | Upside Potential: 44% | Rating: BUY

Q4FY26 Performance Remains Resilient

Chalet Hotels reported:

Particulars	Q4FY26 Performance
Hotel Revenue Growth	3% YoY
Hotel EBITDA Growth	1% YoY
Hotel EBITDA Margin	42%
RevPAR Movement	Down 3% YoY

The company indicated that geopolitical tensions and temporary demand disruptions during March 2026 affected occupancy and travel demand, particularly in the premium hospitality segment.

However, management highlighted that demand conditions have improved during April–May 2026 and expects stronger recovery momentum during H2FY27.

FY26 Financial Performance Highlights

Particulars	FY26
Hotel Revenue	Rs. 17.3 bn
Revenue Growth	14% YoY
Hotel EBITDA	Rs. 7.6 bn
EBITDA Growth	12% YoY

Despite short-term pressure, operational performance remained healthy, supported by strong premium hotel demand and stable corporate travel trends.

Expansion Pipeline Continues To Drive Growth Visibility

The key long-term trigger for Chalet Hotels remains its large expansion pipeline.

The company expects its operational portfolio to increase by approximately 1,655 keys, taking total inventory beyond 5,000 keys by March 2030.

Key Upcoming Assets

Project	Status
Athiva, Khandala (147 Keys)	Fully Operational
Taj Delhi Airport Hotel (390 Keys)	Expected Q4FY27
Cignus Powai Tower II (0.9 msf)	Expected Q4FY27

These projects are expected to meaningfully contribute to both revenue growth and EBITDA expansion over the coming years.

Earnings Growth Expected To Accelerate

ICICI Securities estimates:

Financial Metric	FY25–28 CAGR
Hotel Revenue CAGR	14%
EBITDA CAGR	20%

The brokerage expects:

stable occupancy growth,
improving room rates,
increasing contribution from annuity assets,
and operational leverage from new hotel launches.

The annuity asset portfolio itself could generate annual EBITDA exceeding Rs. 4 bn upon stabilisation by FY29E.

Financial Snapshot

Particulars	FY25A	FY26A	FY27E	FY28E
Net Revenue (Rs. mn)	17,178	27,698	22,327	26,186
EBITDA (Rs. mn)	7,359	11,874	10,767	12,714
EBITDA Margin (%)	42.8	42.9	48.2	48.6
Net Profit (Rs. mn)	1,425	6,450	6,395	7,192
EPS (Rs.)	6.5	29.5	29.3	32.9
P/E (x)	115.3	25.5	25.7	22.8
EV/EBITDA (x)	25.2	15.3	17.2	14.3
RoCE (%)	11.6	17.2	13.6	15.1
RoE (%)	6.3	19.7	15.9	15.3

ICICI Securities View

ICICI Securities has retained its “BUY” rating on Chalet Hotels with a revised target price of Rs. 1,081.

The brokerage believes the company remains well-positioned to benefit from:

premium hospitality demand recovery,
expansion-led earnings visibility,
rising annuity income,
and long-term structural growth in India’s hotel industry.

Key Risks To Monitor

Risk Factors
Slowdown in premium hotel demand
Weak office leasing momentum
Delays in project commissioning
Geopolitical disruptions impacting travel demand

AnalysisLibrary View

Chalet Hotels continues to remain among the stronger premium hospitality plays with visible long-term expansion triggers. While near-term travel disruptions impacted Q4FY26 performance, the broader structural demand environment for premium hotels in India remains healthy.

The large pipeline of upcoming properties, improving annuity income contribution and stable balance sheet position may continue supporting long-term earnings growth visibility.