Chalet Hotels Expects 'Bullish' Growth To Continue For Next 4-5 Years, Says CEO
He expects the debt to come down further in the near future due to healthy cash flow and strong Ebitda numbers.
Chalet Hotels Ltd. expects 'bullish' growth for the next four-to-five years on the back of the benefits of supply-demand arbitrage in the country, Chief Executive Officer Sanjay Sethi said on Tuesday.
"The arbitrage we have between demand and supply today, I see the wave riding in (the) next four to five years at least," he told NDTV Profit in an interview.
With a current capacity of 2,800 rooms, Chalet Hotels is currently working to expand it by 880 rooms at a cost of Rs 1,200–1,300 crore. The company is also working on expanding its office space, with the aim of adding a total of 3.2 million square feet of office space to its portfolio, the managing director said.
Sanjay Sethi, CEO of Chalet Hotels (Source: company)
As of now, the high-end hotel operator has laid out a Rs 2,000 crore capital expenditure, which it intends to utilise in the next four to five years, according to Sethi.
He exuded confidence that the debt would likely come down further in the near future due to healthy cash flow, strong Ebitda numbers and the expansion of its portfolio.
Chalet Hotels' debts are for mostly work-in-progress projects, which will further help in reducing them once they are operational. The firm has also announced a Rs 2,000 crore fundraise, and it may use a part of it to reduce debt, Sethi said.
The CEO expects that the majority of the investment will go towards building big-box hotel rooms in Tier-I cities. In terms of portfolio, Chalet Hotels is "aggressively" looking for new opportunities in the leisure segment.
Last year, it acquired the Dukes Retreat in Lonavala, and it is under renovation and expansion. The hotel developer also intends to expand its resort on Madh Island in Mumbai, according to Sethi.
"We always have leisure in our stated strategies. We like to get into Goa, Rajasthan and resorts in drivable spaces from Mumbai and Delhi," he said. "That part of the strategy continues. We don't see (the) leisure portfolio going over 20% of the total portfolio."
(Correction in last paragraph)