SAMHI Hotels Limited
Q2 FY26
Call date · October 29, 2025
1 · Management Commentary
Key Positives
- Same-store RevPAR grew by 11.2% YoY to INR 5,026, in line with long-term guidance.
- Total income up 11% YoY to INR 296 crores; EBITDA up 14% YoY to INR 110 crores with margin improvement to 37.3%.
- Profit after tax at INR 99 crores, including INR 57 crores reversal of Navi Mumbai land impairment.
- Net debt to EBITDA reduced to 2.9x; average interest cost down to 8.5%; credit rating upgraded to A+ (stable outlook).
- Announced entry into Mumbai with a dual-branded hotel in Navi Mumbai and a new 260-room hotel in Hyderabad Financial District.
- Over 1,500 rooms under active development or rebranding, taking the portfolio to over 6,300 rooms in the near future.
Key Negatives
- Occupancy declined in Q2 due to travel restrictions and adverse events (India-Pakistan issue, Ahmedabad crash, monsoons).
- Slight dip in mid-scale segment occupancy due to absence of last year’s group movements.
Forward Guidance
- Capex for Navi Mumbai Phase 1 (400 rooms): ~INR 650 crores over 3–4 years; potential expansion to 700 rooms (total ~INR 1,000 crores).
- Hyderabad Financial District hotel (260 rooms) to be operational in 36–42 months; capex structure minimizes upfront investment.
- W Hyderabad (170 rooms) targeting December 2026 opening; Westin Tribute Whitefield Bangalore and other projects progressing as planned.
- Staggered investments in Trinity Bangalore; next round of INR 20–25 crores post-February/March.
- Guidance for same-store revenue growth of 9–11% CAGR over 3–5 years; portfolio ARR and EBITDA expected to rise with new upscale additions.
- Focus on M&A and long-term variable leases for growth; not actively pursuing land acquisitions for greenfield development.
- No near-term plans to transfer new Mumbai/Hyderabad assets to GIC JV; will consider capital recycling only after value creation.
2 · Q&A Highlights
Q 1 (Composite): How will SAMHI fund upcoming capex and manage leverage, especially with new projects?
A (Management):
• Net debt/EBITDA at 2.9x (2.4x for operating assets); debt is long-tenure with low amortization.
• Capex to be funded largely from operating free cash; expect INR 1,700 crores investable surplus.
• Short-term leverage to remain below 3x; mid-term target 2.5x.
Q 2 (Composite): What is the outlook for occupancy, RevPAR, and demand given recent declines and market events?
A (Management):
• H2 expected to see higher RevPAR, occupancy, and revenue than H1.
• Structural demand remains strong; supply additions limited in key markets.
• Guidance for 9–11% same-store revenue CAGR over 3–5 years.
Q 3 (Composite): Details and rationale for dual-branded Navi Mumbai project and Hyderabad lease model; future growth strategy?
A (Management):
• Navi Mumbai land acquired via ACIC acquisition at low cost; dual-branded model leverages base business and premium rates.
• Hyderabad lease model minimizes upfront capex; future growth to focus on M&A and variable leases, not land acquisition.
Q 4 (Composite): Capex plans, timing, and expected returns for new and ongoing projects (Navi Mumbai, Hyderabad, Trinity, etc.)?
A (Management):
• Navi Mumbai Phase 1 capex ~INR 650 crores (includes premiums); total for 700 rooms ~INR 1,000 crores.
• Hyderabad lease hotel capex ~INR 125 crores, delivered at INR 45–50 lakhs per key; operational in 36–42 months.
• Trinity renovation: INR 8 crores invested; next INR 20–25 crores post-March; total expected INR 25–30 crores (vs. earlier estimate of INR 70–80 crores).
Q 5 (Composite): Revenue mix, ROCE by segment, and rationale for multi-segment strategy vs. upscale concentration?
A (Management):
• Upscale share to rise to 60% of portfolio; multi-segment presence in key micro-markets preferred over single-segment focus.
• Mid-scale assets (e.g., Holiday Inn Express HITEC City Hyderabad) deliver high ROCE (up to 45%).
• Strategy is to dominate Tier 1 office markets across price points for long-term growth and risk mitigation.
Q 6 (Composite): Interest cost trends, refinancing, and impact of rate changes?
A (Management):
• Recent refinancing at 7.9% (coupon 7.55%); target sub-8% average cost by FY27.
• 55–60% of loans linked to repo; further rate cuts will reduce interest cost.
Q 7 (Composite): Supply outlook in Navi Mumbai and impact on project returns; assumptions for EBITDA guidance?
A (Management):
• Current announced supply (excluding SAMHI) ~1,500 rooms; with SAMHI, ~2,200 rooms.
• Expect more supply as airport precinct develops, but demand from 110 million passenger airport and commercial growth is robust.
• EBITDA guidance for Navi Mumbai assumes flat RevPAR through 2030; upside possible if rates grow.
Q 8 (Composite): Tax outflow and deferred tax; expectation for future tax payments?
A (Management):
• No cash tax outflow; only deferred tax created in P&L.
• No cash tax expected for next few years due to available tax shields.
3 · Other Key Numbers
- Same-store RevPAR: INR 5,026 (up 11.2% YoY)
- Total income: INR 296 crores (up 11% YoY)
- EBITDA: INR 110 crores (up 14% YoY); margin 37.3% (vs. 36.2% YoY)
- Profit after tax: INR 99 crores (includes INR 57 crores impairment reversal)
- Net debt: INR 1,370 crores; Net debt/EBITDA: 2.9x (2.4x for operating assets)
- Average interest cost: 8.5%; recent refinancing at 7.9% (coupon 7.55%)
- Capex for Navi Mumbai Phase 1: ~INR 650 crores (400 rooms); total for 700 rooms: ~INR 1,000 crores
- Capex for Hyderabad lease hotel: ~INR 125 crores (260 rooms); cost per key: INR 45–50 lakhs
- Trinity Bangalore renovation: INR 8 crores invested; next INR 20–25 crores post-March; total expected INR 25–30 crores
- Cumulative capex over next 5 years: ~INR 1,500 crores
- Premium to MIDC for Navi Mumbai: Extension premium INR 75–80 crores; FSI premium estimated INR 100–150 crores
- Portfolio under development/rebranding: >1,500 rooms; total portfolio to exceed 6,300 rooms
- W Hyderabad (170 rooms) opening targeted for December 2026
- No cash tax outflow; deferred tax only
- 55–60% of loans linked to repo; 20% fixed; 20% MCLR-linked
- EBITDA potential for Navi Mumbai (700 rooms): INR 180–185 crores (at current RevPAR)
- Occupancy across segments: 74–76%
- ROCE for Holiday Inn Express HITEC City Hyderabad: ~45%
- Free cash generation last 12 months: ~INR 350 crores
All figures as stated in the call; undisclosed numbers marked as Not disclosed.