At a Glance

Chalet Hotels just dropped a Q1 FY26 bombshell: revenue skyrocketed 146% to ₹895 crore while PAT went full-on “rocket emoji” at ₹203 crore (+235%). EPS came in at ₹9.3, turning heads faster than a free hotel buffet. Despite all this, the stock trades at a P/E of nearly 70, making investors stretch like yoga instructors to justify the valuation. Add to that a chunky 31.9% promoter pledge, and you have a mix of “wow” and “uh-oh”. No dividends because apparently, the management thinks compounding is better than your weekend plans.

Introduction

Welcome to Chalet Hotels Ltd – where rooms are plush, revenues are juicier, and valuations are enough to make Warren Buffett spill his Coke. This quarter, the company decided to show the market who’s boss, with sales and profits soaring like a hot air balloon on steroids. While the market cap nears ₹20,000 crore, investors are still trying to figure out whether this is a solid five-star stay or an overpriced Airbnb.

The business is riding on strong hotel occupancy, residential handovers, and a boom in Indian tourism. But let’s not get carried away – there’s debt, high promoter pledge, and ROE that’s barely out of single digits. Grab your popcorn; this analysis is going to be spicier than hotel sambar.

Business Model (WTF Do They Even Do?)

Chalet Hotels runs a mixed bag of hospitality, commercial, and residential assets. Their bread and butter? High-end hotels under brands like JW Marriott, Westin, Four Points, and Marriott Executive Apartments. Basically, they make money by renting you a fancy bed, charging you for Wi-Fi, and selling you water bottles at diamond prices.

Beyond hotels, they also play landlord with office spaces and retail properties. Real estate development is their side hustle – sometimes delivering projects, sometimes just holding land like a lazy landlord. The portfolio has 3,314 keys across Mumbai, Pune, Hyderabad, and Bengaluru – enough rooms to host a small city.

The upside? Asset-heavy model, stable cash flows when tourism booms. The downside? Capital-intensive, interest costs like a student loan, and valuations that scream “premium” even before you enter the lobby.

Financials Overview

Let’s crunch numbers like an overworked auditor.

Q1 FY26 vs Q1 FY25:

• Revenue: ₹895 crore (+146%)
• EBITDA: ₹379 crore (+150%)
• EBITDA Margin: 42% (solid for hotels)
• PAT: ₹203 crore (+235%)
• EPS: ₹9.3 vs ₹2.8 last year

Annual (FY25):

• Revenue ₹2,251 crore
• PAT ₹285 crore
• Net Margin: 12.6%
• ROE: 5.77% (meh)
• ROCE: 11.1%

The company is minting money this quarter, but long-term returns are as slow as hotel Wi-Fi.

Valuation

Now, let’s see if this luxury comes cheap (spoiler: it doesn’t).

1. P/E Method

• Current Price: ₹910
• Annualized EPS (Q1 x 4): ₹37.2
• Fair P/E Range: 35–45 (industry avg: 40)
• Fair Value: ₹1,302 – ₹1,674

2. EV/EBITDA

• EV: Market Cap ₹19,879cr + Debt ₹2,604cr – Cash ~₹91cr ≈ ₹22,392cr
• EBITDA (annualized): ₹1,428cr
• Fair EV/EBITDA: 14–16x
• Fair Value: ₹1,150 – ₹1,310

3. DCF (Quick & Dirty)

Assume FCF growth 12%, WACC 10%, terminal growth 4%.

• Fair Value: ~₹1,200

Valuation Verdict: Stock is already at the top end of reasonable valuation. Investors paying ₹910 are betting on continuous 30%+ growth.

What’s Cooking – News, Triggers, Drama

• Q1 FY26 Blockbuster: Revenue +146%, PAT +235% – enough to trend on FinTwitter.
• CEO Exit: MD & CEO retiring Jan 2026, successor lined up. Leadership transitions could shake things.
• Residential Handovers: Big revenue boost this quarter – won’t repeat every quarter.
• Tourism Boom: G20, weddings, IPL – tailwinds for hotels.
• Promoter Pledge: 31.9% pledged – like keeping your house mortgage while buying a Ferrari.

Balance Sheet

Auditor Remark: Looks stable but debt still hangs around like that relative who won’t leave your house.

Cash Flow – Sab Number Game Hai

Remark: Cash from ops is good, but investing eats cash faster than kids in a candy shop.

Ratios – Sexy or Stressy?

Verdict: P/E screams “expensive”, ROE whispers “meh”.

P&L Breakdown – Show Me the Money

Comment: Revenues grew, but PAT barely moved last year. Q1 FY26 changes the game – if it sustains.

Peer Comparison

Takeaway: Chalet is small fry compared to Indian Hotels but trades at a similar (if not higher) P/E. Premium pricing much?

Miscellaneous – Shareholding, Promoters

• Promoters: 67.4% (31.9% pledged)
• FIIs: 5.3%
• DIIs: 23.9%
• Public: 3.4%

Promoter Bio: K Raheja Corp – kings of malls, hotels, and pledges. They love leverage almost as much as they love real estate.

EduInvesting Verdict™

Chalet Hotels just delivered a quarter that deserves a standing ovation. Revenue doubled, profits tripled, and margins stayed healthy. But here’s the catch – a lot of this came from one-off residential handovers. Hotel segment growth is strong, but not 146% strong every quarter.

Strengths:

• Premium asset portfolio in top cities.
• Strong revenue momentum.
• Healthy cash flows and falling debt.

Weaknesses:

• Low ROE/ROCE.
• High valuation (P/E ~70).
• Promoter pledge remains a risk.

Opportunities:

• Tourism boom, rising occupancy, higher ARRs.
• Asset monetization, new room additions.

Threats:

• Economic slowdown, interest rate hikes.
• Leadership change uncertainty.
• Competitive pressure from bigger players.

Final Word: Chalet Hotels is like that luxury hotel – stunning but pricey. If Q1 performance sustains, it may justify its valuation. If not, investors may find themselves paying five-star prices for a three-star stay.

Written by EduInvesting Team | 1 Aug 2025
SEO Tags: Chalet Hotels, Hospitality Stocks, Q1 FY26 Results, Hotel Industry Analysis