SAMHI Hotels Limited

Performance Highlights

Operational Metrics:

  • Same-store revenue growth: 12.6% YoY (exceeding long-term guidance of 9-11%)
  • RevPAR growth for same-store hotels: 14% YoY
  • Occupancy rate: 78.6% in Q2 FY27 (up from 75% in Q2 FY26)
  • 37% of nights above 90% occupancy (vs 32% a year ago)
  • 80% of room nights sold to domestic travelers
  • Flow-through rate: 60% before accounting for loss of input tax credit

Market Context:

  • Bangalore and Hyderabad office markets absorbed 7.9 million sq ft net office space in Q2 (vs 5.1 million sq ft a year ago)
  • Hyderabad alone doubled absorption from 1.6 million to 3.8 million sq ft
  • Airline passenger traffic declined due to route rationalization from higher fuel prices, not demand issues

Financial Results

Q2 FY27 Performance:

  • Total income: ₹342.7 crores (15.6% YoY growth)
  • Increase breakdown: ₹35.5 crores from same-store growth, ₹10.1 crores from new/acquired assets (Trinity Bangalore, Holiday Inn Express Greater Noida and Calcutta)
  • Consolidated EBITDA: ₹123.8 crores (12% YoY growth, 36.1% margin)
  • Comparable EBITDA (excluding GST impact): ₹133.8 crores (21.3% YoY growth, 39.1% margin)
  • GST regulation impact: ₹10 crores (effective late September 2025)
  • Finance cost: ₹38.3 crores (10.3% decline YoY due to lower interest costs and improved credit profile)
  • Depreciation: ₹32 crores
  • Profit before tax and exceptional items: ₹53.4 crores (39.9% YoY growth)
  • Exceptional gain: ₹3.9 crores from sale of non-core land parcel at Kusur
  • Tax expense: ₹16.2 crores (largely deferred tax, non-cash)
  • PAT: ₹41.1 crores (₹33.5 crores attributable to SAMHI shareholders)
  • YoY PAT decline attributed to high base in Q2 FY26 which included exceptional gains of ₹54.1 crores

H1 FY27 Performance:

  • Profit before tax and exceptional items: ₹86.2 crores (35.4% growth)
  • PAT: ₹66 crores
  • Excluding one-time exceptions in Q2 FY26, PAT for Q2 FY27 grew approximately 137% YoY

Balance Sheet & Capital Structure

As of September 2026:

  • Net debt: ₹1,458 crores (reduced by ₹35 crores from June despite growth investments)
  • Capital work in progress: ₹219 crores (increased from ₹139 crores in March)
  • Net debt to trailing 12 months EBITDA: 3.1x
  • Adjusted net debt to EBITDA (excluding growth projects): 2.2x
  • Credit rating: A+
  • Effective interest rate: 7.8% (300 bps lower than IPO time)
  • Free cash flow: ₹53 crores after cash interest payment of ₹38 crores
  • Cash and cash equivalents: ₹279 crores

Growth Pipeline & Strategic Updates

Portfolio Transformation:

  • Secured pipeline adds 1,670 rooms and rebrands 473 rooms upmarket
  • Target: Upper and upper upscale to increase from 42% to 60% of income by FY30
  • Upscale hotels showed 800 bps higher EBITDA margins than broader portfolio

Specific Project Updates:

  • W Hotel, HITEC City Hyderabad (170 rooms): Final stages, MEP, facade and fit-outs progressing. Expected opening Q2 FY28. Projected to add 10% to FY27 income base at above-portfolio margins. Most rooms expected to sell above ₹7,500 rate threshold.
  • Westin and Tribute Portfolio, Whitefield Bangalore: 142 existing rooms + 220 new rooms. Existing Trinity Hotel being renovated into Tribute portfolio. Westin Tower moved from excavation to basement construction. Combined 370-room upscale hotel.
  • Ingka Center, Noida (162 rooms): Part of 2.5 million sq ft mixed-use development. Long-term variable lease limiting upfront capital. At second floor slab stage.
  • Sriperumbudur Project: Changed from Fairfield extension to separate Marriott hotel. 155-room hotel with expected capex of ~₹160 crores. Target yield on cost: 15-17%.
  • Navi Mumbai Project: MIDC issued OC. 658 rooms split between Westin and Fairfield. Expected capex: ₹900-1,000 crores. Groundwork expected early FY28.

RARE India Platform:

  • Integration work at final stages
  • Targeted go-live on Marriott Bonvoy Outdoor Collection in December 2026
  • Currently 70 hotels with 900 rooms (down from 75 hotels/1,050 rooms in Q1)
  • Strong pipeline of 20-25 hotels waiting to join
  • Expected to reach 85-90 hotels in next 5-6 months
  • Projected FY28 revenue: ₹15-20 crores
  • Expected to contribute to growth without material capex

Guidance & Outlook

Financial Guidance:

  • Net debt target: 2.5x in long term, expected to reach "2 handle" by end FY27 or early FY28
  • Expect gradual increase in borrowing costs following RBI repo rate hikes
  • Expect strong Q3 and Q4 with multiple marquee events in key cities:
  • Bangalore: Aero India, DCC India Expo, AI India Expo, Digital Manufacturing Expo, CAHO Diagnostic Con
  • Hyderabad: BioAsia, Kisan Agri Show, India Pharma Expo
  • Delhi NCR: Bharat Mobility, Auto Expo, India At Fair, Medical Fair
  • Expect subsequent quarters to be stronger than previous ones (unlike previous year Q4 dip)
  • Deferred tax asset recognition: ~₹100 crores expected in Q4 FY27
  • Net tax benefit for H2 FY27: ₹25-30 crores

Operational Guidance:

  • Long-term same-store revenue growth guidance maintained at 9-11%
  • Expect 13-14% same-store total revenue growth in H2 FY27
  • Expect 14-15% RevPAR growth in H2 FY27 driven by 10-11% rate growth and better capacity utilization
  • Company targeting return to high teens revenue growth combining 10% same-store and new inventory additions

Capital Recycling:

  • Identified 2 hotels for monetization with expected realization of ₹200-230 crores
  • Target execution of at least half in FY28
  • These are small hotels with insignificant EBITDA contribution

Capex Plan:

  • FY27-FY31 cumulative capex: ~₹2,400 crores
  • GIC to fund ₹150 crores
  • Net SAMHI capex: ~₹2,250 crores over 4 years
  • Funding from internal accruals, net debt to remain around current levels

Sustainability Initiative

  • Published first sustainability report in Q2 FY27, setting baseline for future accountability

Q&A Session Key Points

GST Regulation Update:

  • October 2026 GST council meeting suggested allowing limited ITC benefit for hotels operating below ₹7,500 ARR
  • Final notification still pending
  • Company waiting for clarification on OTA commission eligibility

ROC E Targets:

  • Mature assets delivering 15-16% ROCE
  • ACIC depressed by goodwill from pre-IPO fair valuation
  • Target mid-to-high teen ROCE as new hotels stabilize
  • Long-term variable lease properties (W Hyderabad, Ingka Noida) expected to be less ROCE dilutive

Market Performance:

  • Bangalore: 12% total revenue growth, 8% RevPAR growth
  • Hyderabad: 21.4% total revenue growth, 19.1% RevPAR growth
  • NCR: 44% RevPAR growth (boosted by Hyatt Place Gurgaon renovation completion)
  • Pune: 17.2% RevPAR growth