Chalet Hotels (CHALET) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever Q2 performance with consolidated revenue and EBITDA both up 20% year-over-year, driven by strong hospitality and rental segments.

• Hospitality revenue grew 18% YoY, with EBITDA also up 18%; rental and annuity revenue surged 39% YoY.

• Residential sales in Bengaluru picked up, commanding higher average prices per sq. ft.

• Strategic acquisition of 11-acre beachfront land in Goa for a new upper-upscale resort, expected to open in three years.

• Credit ratings upgraded by CRISIL, ICRA, and India Ratings, reflecting improved financial strength.

Financial highlights

• Consolidated Q2 FY25 revenue was INR 3.8 billion (+20% YoY); EBITDA reached INR 1.6 billion (+20% YoY) with a margin of 40.6%.

• Profit before tax was INR 0.8 billion, nearly doubling YoY; net loss of INR 1.4 billion due to a one-time deferred tax asset reversal.

• Rental and annuity revenue was INR 419 million (+39% YoY), with EBITDA of INR 323 million (77% margin).

• Residential segment sold 32 units at an average rate of INR 21,835 per sq ft; 80% of total units sold.

• Finance costs reduced 32% YoY in Q2 FY25, reflecting deleveraging.

Outlook and guidance

• H2 expected to be robust, driven by corporate travel, MICE, weddings, and continued leasing and residential sales momentum.

• CapEx plan of INR 15 billion over the next six quarters, largely funded by internal accruals.

• Multiple new projects in pipeline, including expansions in Lonavala, Bengaluru, Delhi, Mumbai, and Goa.

• Expectation of achieving 90% leasing (including LOIs) in Bengaluru and Powai office assets by March 2024.

• International arrivals nearly back to pre-COVID levels, with 33% of Q2 room nights from foreigners.