Brigade Hotel Ventures Ltd Q2FY26 – When Occupancy Hits 76.7%, But P/E Hits 129. Welcome to India’s Most Expensive Pillow Fight!

1. At a Glance

Brigade Hotel Ventures Ltd (BHVL) has checked into the stock market with the kind of swagger you usually see in wedding processions — loud, over-valued, and entirely sure the party will never end. With amarket cap of ₹3,089 crore, this hospitality arm of the Brigade Group ownsnine plush hotels with 1,604 keysacross Bengaluru, Chennai, Kochi, Mysuru, and GIFT City.

InQ2FY26, it served up₹130 crore in revenue, a20% YoY rise, and₹11 crore PAT, up a striking58% YoY, despite a stock P/E of129x— that’s not valuation, that’s fiction. Operating margin still stands solid at30%, occupancy averaged76.76%, and average room rate is a cool₹6,693.

The cherry on this overpriced sundae? IPO proceeds of ₹759 crore (listed July 2025), of which ₹591 crore have been utilised — mostly to repay borrowings and buy land. The rest? Probably under the mattress in the Grand Mercure suite.

2. Introduction

Remember when hotels were about hospitality? Brigade Hotel Ventures made them about hospitalityand hype. The company, freshly spun out from Brigade Enterprises, has positioned itself as South India’s second-largest chain-affiliated hotel owner, flaunting affiliations withMarriott, Accor, and IHG.

Their pitch to investors is simple — “We own hotels, they run them, and we count the money.” The market’s response? “Here, take my kidney too.” With a P/E north of 100 and a P/B ratio of 3.4, the company’s valuation smells like freshly printed optimism sprayed with room freshener.

But to be fair, Brigade’s hospitality journey isn’t just room service and ribbon-cutting. Thehotel segment now contributes over ₹468 crore annually, roughly7–8% of Brigade Enterprises’ consolidated revenue, yet offers some of the group’s highest margins. The IPO in July 2025 was pitched as a growth unlocker — think expansion into Chennai, Hyderabad, and even aRitz-Carlton wellness resort in Kerala(because apparently, we need a luxury spa to think about our valuations).

So yes, Brigade Hotels is officially India’s latest “asset-heavy, profit-light” love story. But does it have enough rooms to grow into its own hype?

3. Business Model – WTF Do They Even Do?

Let’s simplify it:they build hotels, others run them. Brigade Hotel Ventures Ltd follows ahybrid model— owning, leasing, and managing properties while letting global chains handle daily operations, branding, and customer management.

They make money through three main routes:

1. Room Revenue– The core. Around 70–75% of income.
2. F&B and Banquets– Corporate events, weddings, and overpriced buffets (15–20%).
3. Leases, Rentals, and Other Ops– Minor revenue streams (5–10%).

The company’s strength lies inlocation— every property is near IT corridors, business parks, or airports. That’s no accident; being part of theBrigade Group, they get early dibs on prime real estate in projects likeWorld Trade CentersandBrigade Tech Gardens.

Their nine-hotel portfolio is run underthree top brands:

• Marriott Group (Sheraton, Four Points)
• Accor Group (Grand Mercure, Ibis)
• IHG (Holiday Inn)

Basically, BHVL builds the fort, global brands run the army, and both share the spoils — except the global brands take the fame, and BHVL takes the debt.

4. Financials Overview

EBITDA margin slipped to30%from33%, likely due to higher employee and energy costs (and maybe that one guest who took the minibar too seriously). PAT margin, however, climbed to8.7%, showing operational efficiency is still improving — or accounting creativity is.

5. Valuation Discussion – Fair Value Range (Educational Only)

Method 1 – P/E ApproachCurrent EPS (annualised) = 0.24 × 4 = ₹0.96Industry average P/E (Hotels & Resorts) ≈ 60×Fair Value Range (P/E method): ₹58 – ₹72 per share

Method 2 – EV/EBITDA ApproachFY25 EBITDA: ₹165 croreEnterprise Value: ₹3,122 croreEV/EBITDA (current): 18.9×Industry median: ~14×Fair Value Range (EV/EBITDA method): ₹63 – ₹75

Method 3 – Simplified DCFAssume free cash flow CAGR 12%