Apart from the recent acquisition of The Westin Resort and Spa, Himalayas in Rishikesh, the company's expansion plans remain on track with renovation and expansion of the Dukes Retreat, Lonavala (150 keys overall) likely to complete by Q1 FY26.
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ICICI Securities Report
Chalet Hotels Ltd. has announced the completion of the acquisition of 141 keys five-star luxury hotel – The Westin Resort and Spa, Himalayas in Rishikesh at an acquisition cost of Rs 5.3 billion.
We estimate the hotel to reach stabilised occupancy of 65% in FY27E and generate Ebitda of Rs 546 million in FY26E and Rs 735 million in FY27E.
Incorporating the Westin hotel earnings, we raise FY26/27E revenue and Ebitda by 6-7% and estimate hotel Ebitda CAGR of 19% over FY24-27E at Ebitda margin of 44-45%.
Retain Buy with SoTP-based revised target price of Rs 1,017 (earlier: Rs 965), based on Mar'27E, incorporating Westin hotel, valuing Chalet Hotels at 23 times EV/Ebitda, 8% cap rate for rental assets and residual value of Vivarea, Bengaluru residential project.
Key risks: Slowdown in hotel demand and office leasing.
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