Chalet Hotels' Q2 profit jumps 40% on ₹112 crore tax credit; core EBITDA rises 13%

Chalet Hotels reported a 40% year-on-year rise in consolidated net profit to ₹216.3 crore in the September quarter of FY27, aided by a ₹112.5 crore deferred tax credit following its shift to a lower corporate tax regime. The hospitality and commercial real estate operator also reported double-digit growth in its core business, even as lower occupancy and disruptions to business travel weighed on parts of its hotel portfolio.

The company's consolidated profit after tax (PAT) stood at ₹216.3 crore in Q2 FY27, compared with ₹154.8 crore in the corresponding quarter last year. However, the increase was largely supported by a tax adjustment rather than a comparable improvement in operating performance. Chalet Hotels opted for the concessional corporate tax regime of 25.17%, against the earlier applicable rate of 34.94%, resulting in a one-time tax credit of ₹112.5 crore from the remeasurement of deferred tax liabilities.

Consolidated revenue for the quarter declined 31.2% year-on-year to ₹511.4 crore from ₹743.8 crore, while EBITDA fell 26.2% to ₹227 crore. The company attributed the tax adjustment to its decision to exercise the option available under Section 206 of the Income Tax Act, 2025. Consequently, the tax expense for the quarter is not directly comparable with previous periods.

Core business grows, but hotel occupancy remains under pressure

Excluding its residential business, Chalet Hotels' total income from its hospitality and annuity operations rose 10.7% to ₹511 crore in Q2 FY27, against ₹461.7 crore a year ago. EBITDA from these operations increased 13.5% to ₹227.4 crore, while margins expanded 110 basis points to 44.5%.

The hospitality business reported revenue growth of 8.2% to ₹411.5 crore, while EBITDA increased 11.2% to ₹169.1 crore. However, hotel occupancy slipped to 64.2% from 66.7% in the year-ago quarter. Average daily rates (ADR) increased 11.3% to ₹13,546, helping revenue per available room (RevPAR) rise 7.2% to ₹8,702.

The company said its leisure portfolio was a key growth driver, recording 34% growth in RevPAR, supported by improvements in both occupancy and room rates.

"Despite reduced air connectivity and higher airfares impacting certain business travel markets, we delivered an 11.3% YoY growth in ADR and a 7.2% increase in RevPAR," said Shwetank Singh, managing director and CEO, Chalet Hotels.

The company's commercial real estate business provided another source of growth. Rental and annuity revenue increased 22% to ₹90.1 crore, while EBITDA rose 23.5% to ₹75 crore. Occupancy in the commercial portfolio stood at 91%, with the monthly revenue run-rate improving to ₹30 crore in September from ₹29 crore in June.

Expansion pipeline gathers pace

Chalet Hotels also continued to expand its hospitality portfolio. It rebranded its Navi Mumbai business hotel as ATHIVA Pulse, Navi Mumbai, under Marriott's Autograph Collection. The company said the initial guest response had been positive.

Its development pipeline includes CIGNUS II in Powai, Mumbai, which is expected to achieve substantial completion by the end of FY27, and Taj Delhi International Airport, which is expected to open in early FY28. Foundation work is also underway for The Ritz-Carlton in Hyderabad, while 70% of foundation work has been completed for Hyatt Regency in Airoli, Navi Mumbai.

The company currently operates 11 hotels and resorts with 3,389 rooms, with around 2,036 additional rooms under development.