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Hidden Gem - Chalet Hotels

ICICIdirect Research 27 Feb 2026 DISCLAIMER

Chalet Hotels Ltd (Chalet) is an owner, developer and operator of premium hotels, commercial office spaces and residential properties in India. The Company’s portfolio comprises 11 fully operational hotels representing 3389 keys across seven cities across India.

Chalet’s hotel business revenues are expected to grow at a CAGR of 18% over FY25-28E with double digit RevPar growth We expect EBIDTA margins of the hotel business to stand at 44-45% over the next two years.

Chalet’s annuity business (commercial leasing) is complementing well to the overall business of the Chalet. The business not only add to incrementally to the revenues and profitability of Chalet but also cross pollinize by helping to acquire corporate customers for its core hotel business.

The company has commercial space of 2.4mn sq.ft (operates at 83% occupancy), which will increase upto 3.3mn sq,ft by end of FY27E post the addition of CIGNUS Tower II in Powai. Chalet’s annuity business revenues and EBIDTA are expected to grow at CAGR of 39% and 42% respectively over FY25-28E.

Recently, Chalet Hotels announced development of ~330-room hotel in Mindspace Madhapur, Hyderabad. Mindspace Madhapur is Hyderabad’s largest A-grade integrated business campus with ~13mn sqft of commercial space. The hotel will be branded under “Ritz Carlton” and will have 330 rooms and ~36,255 sqft of commercial luxury retail space. Overall, Hyderabad has ~120mn sqft of commercial space out of which Madhapur has largest commercial space of ~73.1mn sqft.

Overall, Chalet Hotels is adding 5 hotels (ex. new Hyderabad hotel) to its portfolio with ~1180 rooms out of which 2 hotels (580 rooms) are under construction. 3 hotels with 600 rooms are awaiting regulatory approvals post which construction is expected to begin.

Its parent company, K Raheja Group, also provides an advantage of mix-used development synergies and cross business synergies.

Room expansion, strong annuity income is expected to fuel Chalet’s growth in medium to long term with revenue and PAT expected to grow at CAGR of 18% and 21% over FY25-28E. We have Buy rating on Chalet Hotels with SoTP based price target of Rs.1055

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