Financial Performance Highlights

Q2 FY27 Performance:

  • Revenue: ₹86 crores, up 12% year-on-year (YoY)
  • EBITDA: ₹22 crores, up 131% YoY
  • EBITDA Margin: 26%, expanding by 1300 basis points YoY
  • PAT: ₹5 crores (versus loss of ₹2 crores in Q2 FY26)
  • PAT Margin: 6%
  • Occupancy: Increased by 800 basis points to 58%
  • RevPAR: Improved by 20%

H1 FY27 Performance:

  • Revenue: ₹179 crores, up 11% YoY
  • EBITDA: Crossed ₹50 crore mark, up 67% YoY
  • EBITDA Margin: 28%
  • PAT: ₹15 crores
  • PAT Margin: 8%

Same Store Performance (Excluding IRA Mumbai, Orchid Shimla, and IRA Bhavnagar)

  • Revenue: ₹85 crores, up 31% same store basis
  • EBITDA: ₹23 crores, up 98% same store basis
  • EBITDA Margin: 27%, up 900 basis points

Balance Sheet and Debt Position

  • Gross Debt (as of September 30, 2026): ₹96 crores
  • Cash and Cash Equivalents: ₹65 crores
  • Net Debt: ₹31 crores
  • Net Debt to EBITDA: 0.23x (down from 0.52x last quarter)
  • Subsequent to quarter end: Repaid ₹30 crores loan to Axis Finance Limited

Expansion Strategy and FY30 Vision (KHIL 3.0)

  • Target: Increase inventory by more than 50% to 3,000 keys (from current 1,900+)
  • Target Portfolio ARR: ₹8,000 (33% increase from current ₹6,000)
  • Geographic Expansion: From 10 states to 11 states
  • Portfolio Expansion: From 24 to 31 properties
  • New Property Openings: Gwalior (December/January, lease model), Dwarka and Nasik (management contracts)
  • Pipeline: Additional 266 keys from new properties, with Rishikesh and Dehradun expected

Operational and Strategic Updates

  • Focus on driving RevPAR and operational efficiencies
  • 100% EV car fleet adoption across organization
  • Electric kitchen implementation (e.g., Pune Orchid handling 3,000-4,000 meals daily)
  • Strengthening digital sales and distribution
  • Disciplined asset-light expansion approach
  • Maintaining net cash positive philosophy

Industry Context and Outlook

  • Industry showed resilient performance despite challenges (war, fuel shortage, monsoon seasonality, aviation issues, geopolitical tensions)
  • Q2 typically weak due to monsoon and seasonal factors but performed exceptionally
  • H2 expected to be strongest period with robust demand
  • Demand drivers: Large format MICE events, wedding season (though weaker than last year), sustained leisure demand, spiritual tourism
  • Premiumization trend benefiting hospitality sector
  • Foreign tourist recovery gradual but Indians becoming primary spending demographic

Management Commentary

Vishal Kamat highlighted:

  • Breakout quarter with decisive turnaround in profitability
  • Operating leverage delivering margin expansion
  • Focus on sustainable growth with financial discipline
  • Expansion criteria: Properties with 40+ rooms for management contracts, 60-70+ rooms for lease/revenue share models
  • Challenges in industry viability for smaller properties (40-50 rooms) due to GST structure

Milind Wadekar emphasized:

  • Business model now structurally profitable and scalable
  • Revenue growing with tight cost control
  • Expect profitability to grow faster in H2
  • Financial capacity for expansion: Estimated ₹600 crore available from cumulative EBITDA (less tax) over next 5 years, plus additional debt capacity of ₹600+ crore with EBITDA growth

Q&A Session Highlights

EBITDA Margin Sustainability: Attributed to occupancy growth (50% to 58%), flat ADR growth (~3%), property-specific performance (Pune up 32%), and cost efficiencies. Management believes margins are sustainable.

H2 FY27 Outlook: Expected to be strongest period with continuous increase in rates and occupancy driving heightened top line and EBITDA growth.

IRA by Orchid Performance: Weaker metrics due to exclusion of high-performing IRA Mumbai from portfolio and occupancy hit in Ayodhya. Excluding IRA Mumbai, RevPAR was ₹2,477 vs ₹2,337 (small drop).

New Properties (Bhavnagar, Rishikesh): Currently showing negative EBITDA but expected to turn positive in next two quarters. Typically takes one year for stabilization.

Expansion Pipeline: Focus on states where already operating rather than new states. Active negotiations with strict internal norms. Looking at micro-markets with good returns.

Business Models:

  • Management contracts: Flat 6% of top line (no GOP-based models)
  • Lease/revenue share: Minimum 60-70+ rooms required
  • Avoid properties below 40 rooms due to viability issues

Mumbai Hotel Royalty: Addresses question about interest-free deposit to Plaza Hotels (promoter entity) and royalty increase from 3% to 5%. Management noted potential land value of ₹300-350 crore and cost of finance around ₹35 crore versus current royalty of ~₹9 crore. Evaluating amalgamation options but not currently in minority shareholder interest.

Demand Segments: Q2 demand from corporate (business hotels) and leisure travel (leisure properties). H2 outlook promising with robust demand expected.

ARR vs Occupancy Strategy: Focus on RevPAR growth. Last quarter emphasized occupancy growth; will push rates as occupancy increases based on micro-market conditions.