Buy Chalet Hotels; target of Rs 1095: ICICI Securities

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Chalet Hotels' hospitality revenue and EBITDA are expected to grow 15%/20% CAGR over FY26-29, driven by a strong asset pipeline and demand recovery.
  • The company's expansion plans are on track, with the Delhi Airport hotel and Cignus Powai Tower II expected to commence operations in H1FY28.
  • Chalet Hotels' operational hotels' portfolio is poised to grow by 1,655 keys to over 5,400 keys by Mar'30E, alongside its leasing traction.
  • The company's annuity asset portfolio may generate over INR 4bn of annual EBITDA upon full stabilization in FY29E.

Thesis Validation Checklist

  • Investors should watch for a demand bounce back in H2FY27, driven by a pick-up in weddings/MICE and recovery in Westin Powai's occupancy.
  • The successful commencement of operations at the Delhi Airport hotel and Cignus Powai Tower II will be key drivers of growth.
  • Chalet Hotels' ability to maintain its leasing traction and stabilize its annuity asset portfolio will be crucial to delivering a 20% EBITDA CAGR over FY26-29E.
  • Any slowdown in hotel demand or office leasing could pose a risk to the investment thesis.