Chalet Hotels Q2 FY26: Revenue Nearly Doubles Year-on-Year and Profit Turns Positive After Last Year’s Loss
Chalet Hotels reported a powerful turnaround in the second quarter of FY26 (for the period ending September 30, 2025). The company saw a strong YoY gain in revenue and EBITDA, with profitability returning after a loss in the same quarter last year. Operational performance in hospitality and annuity businesses improved, margins expanded and the board declared the maiden interim dividend. The results reflect a recovery in travel demand and the benefits of scaling up room inventory and rental properties.
*Key Highlights*
* Revenue from Operations: ₹735.31 crore in Q2 FY26: +~95% YoY from ₹377.05 crore in Q2 FY25.
* Consolidated Net Profit (PAT): ₹154.84 crore in Q2 FY26: turned positive from -₹138.49 crore loss in Q2 FY25.
* Operating Profit (EBITDA): ₹299.23 crore in Q2 FY26: +~100% YoY.
* Operating (EBITDA) Margin: 40.69% in Q2 FY26, improved ~104 bps YoY.
* Interim Dividend Declared: ₹1 per equity share (face value ₹10).
* Room Inventory Growth: ~10% increase YoY.
* New Premium Brand Launched: Athiva Hotels & Resorts introduced.
*Revenue & Profit Analysis*
Chalet Hotels demonstrated a strong revenue rebound with nearly double the income compared with the same quarter last year. Total revenue reached ₹735.31 crore in Q2 FY26, up almost 95% YoY, mainly due to higher contributions from hotel operations and annuity businesses.
Profit also saw a dramatic shift: PAT was ₹154.84 crore, compared with a loss of ₹138.49 crore in Q2 FY25. This is a substantial YoY swing, indicating that not only did revenue improve, but the company also controlled costs and reaped the benefits of higher operational scale.
EBITDA nearly doubled, reaching ₹299.23 crore and the operating margin improved, showing that the company is capturing more profit from each rupee of revenue compared with a year ago.
*Segment & Operational Performance*
1. Hospitality Core Business: Chalet’s core hotel operations excluding residential project income, delivered solid growth. On a like-for-like basis:
* Core revenue: ₹460 crore, up ~20% YoY.
* EBITDA for core operations: ₹200 crore, up ~25% YoY.
* EBITDA margin: 43.4%, which is ~1.4 percentage points higher than last year.
This improvement reflects higher room utilisation, stronger room rates and better cost efficiency in managing hotel operations.
2. Room Inventory Growth: Room inventory expanded by about 10% YoY, aided by acquisitions and new hotel additions. This helped drive topline growth and indicates ongoing expansion of business scale.
3. Brand Expansion: The company launched Athiva Hotels & Resorts, a premium lifestyle brand focused on experiential travel, positioning Chalet to capture demand in higher-margin segments.
*Margins & Cost Efficiencies*
Margins improved across the board:
* Operating (EBITDA) margin: ~40.69%.
* Margin expansion reflects better ability to convert revenues into profits, an indication that fixed costs were spread over higher revenues and that operational efficiencies have improved.
*Balance Sheet & Shareholder Returns*
The board declared a maiden interim dividend of ₹1 per share, which is a positive sign that the company is returning value to shareholders as profitability stabilises. The quarter also saw growth in room inventory and progress on ongoing projects, suggesting that the company continues to invest in expanding its hotel footprint and asset base.
*Management Commentary & Outlook*
Management highlighted that the company delivered a strong and steady performance in Q2 FY26, despite challenges like fluctuating travel patterns and weather impacts. The launch of the ATHIVA Hotels & Resorts brand reflects a strategic move to build a premium, scalable hospitality brand. Expansion projects such as the Taj at Delhi Airport and the Varca Beachfront Resort in Goa are on track, supporting future revenue streams once completed.
*Valuation Standpoint*
Several points stand out in Q2 FY26 results:
1. Strong Turnaround: The swing from a net loss to a meaningful profit (~₹155 crore) in just one year shows significant improvement in business fundamentals.
2. Revenue Momentum: Almost doubling revenue YoY (95%) signals strong demand for the hospitality and annuity businesses and this momentum can support higher valuation multiples.
3. Margin Expansion: Improved operating margin reflects operational discipline, which is attractive to investors seeking quality earnings growth.
4. Brand & Growth Strategies: The launch of a new brand (Athiva Hotels & Resorts) and continued addition of room inventory underline the company’s drive to grow both in scale and market positioning.
Chalet Hotels can be viewed relative to peers such as Indian Hotels, Lemon Tree and EIH. These hotel companies typically trade in the range of mid-20s to high-30s on forward P/E and around 14–20× on EV/EBITDA, depending on their growth visibility and asset mix. Chalet’s sharp improvement in profitability, expanding EBITDA margin and increasing room inventory position it closer to the premium end of this range. While it may still trade at a slight discount to the largest players due to smaller scale, its strong Q2 FY26 recovery and pipeline of new properties suggest that the valuation gap could narrow over time as earnings stabilise and cash flows strengthen.
*Conclusion*
Chalet Hotels’ Q2 FY26 performance was strong and strategic. Revenue almost doubled YoY, EBITDA nearly doubled and the company swung from a loss to a healthy net profit, while margins expanded. The launch of a premium brand and a maiden dividend declaration are additional positives for shareholders. Overall, the quarter suggests that Chalet Hotels is emerging from the pandemic and macro slowdowns with stronger operational resilience and growth potential.
The image added is for representation purposes only
