Samhi Hotels Eyes Strong Double-Digit Revenue Growth For Next Four Years On Back Of Expansion

Samhi Hotels anticipates sustaining mid-to-high teens total revenue growth over the next three to four years, driven by both stable hotel performance and expansion initiatives, according to Chief Executive Officer Ashish Jakhanwala. He emphasised the importance of evaluating growth through two distinct lenses: organic, same-store growth and revenue generated from rebranding, renovation, and inventory expansion.

"It's important that we split it into two buckets—one is same-store and the other is the growth coming from innovation, rebranding, and inventory addition. Given that most of our inventory is in Tier 1 office locations, we expect total revenue growth to remain within high single digits to early double digits. That’s only for stable hotels. If we add the impact of rebranding, renovation, and inventory addition, I would say mid-to-high teens total revenue growth over the next three to four years," Jakhanwala told NDTV Profit.

The company’s shareholding pattern has evolved, with FIIs holding 64.6% of shares as of September 2023, while DIIs and the public held 22.4% and 12.9%, respectively. By December 2024, FIIs had reduced their stake to 54.8%, DIIs to 18.6%, and public shareholding increased to 26.7%.

Addressing this shift, Jakhanwala clarified that the FII stake reduction was primarily due to pre-IPO investors exiting after their lock-in period ended. 

“Part of the FII stake reduction is on account of the sale by some of our pre-IPO investors that happened last year. I wouldn't really classify that as FIIs selling. These are investors who were in the company for the last 10-12 years and had a six-month lock-in that expired last year. So the FIIs' reduction from 64.6% to 54.8% was largely due to some of these pre-IPO investors exiting,” he explained.

As part of its capital recycling strategy, Samhi Hotels has divested smaller properties with minimal earnings contribution to strengthen its balance sheet. Additionally, the company has outlined an annual capital expenditure plan of Rs 700 crore to Rs 800 crore over the next four years.

"We feel fairly confident that we'll be able to bring the net debt-to-EBITDA ratio below 3.5 times over the next 12 to 15 months. In terms of capital expenditure, we have a planned outlay of Rs 700 to Rs 800 crore, and on an annualised basis, we will see about Rs 150 to Rs 180 crore of capital expenditure over the next four years, all funded from internal accruals," Jakhanwala said.

Samhi Hotels remains confident about sustaining profitability, with all growth initiatives being funded through internal cash flows.

Jakhanwala emphasised that Samhi Hotels does not foresee a rise in gross debt. “I would say capex-to-revenue conversion—you would see the impact of that coming down to the bottom line. So you will see both net debt-to-EBITDA and profitability improve year on year,” he added.

Shares of Samhi Hotels ended Monday’s trade flat at Rs 151.65, while the benchmark Nifty50 closed 1.32% higher at 23,658.35.