Kamat Hotels (India) Ltd Q2 FY26 Earnings Analysis

- Kamat Hotels targets revenue of INR 400 crores in FY '25-'26, with a 10% growth over FY '25 actuals. - The company plans to expand room inventory from approximately 1,850 to 2,500 operational rooms within the year, a ~35% increase. - The ARR (Average Room Rate) target is to increase from INR 6,500 to INR 7,200, aiming for a blended ARR of around INR 7,500. - Expansion includes opening around 30 hotels by March next year, adding 7-8 new hotels and 600-650 rooms. - By FY '27, Kamat Hotels aspires to reach INR 500 crores in topline revenue, supported by new properties including large inventory hotels in premium markets. - Growth approach is qualitative with focus on larger hotels having higher ARR and better operating margins. - New projects in strategic locations like Rishikesh (target ARR INR 15,000), Puri (around INR 10,000 ARR), and others are expected to drive revenue and occupancy improvements.

- Management expects revenue to be around INR 400 crores in FY '26, considering conservative estimates due to recent sector challenges but is open to revising upwards. - With the addition of 7-8 new hotels (~600-650 rooms), room inventory is increasing ~35%, potentially driving higher revenues beyond current guidance. - ARR (Average Room Rate) is targeted to increase from INR 6,500 to INR 7,200, supporting margin expansion. - Occupancy is expected to improve from ~65% to approximately 68-70%. - EBITDA margins are aimed to remain stable around 29-30%, with efforts to possibly exceed these levels. - By FY '27, Vishal Kamat indicated hitting INR 500 crores in revenue is very doable if growth momentum continues. - New premium properties with higher ARR (e.g. Rishikesh targeting INR 15,000 ARR) expected to boost profitability. - Net cash flow from new properties estimated between 12-20% of total revenue share.

- Renovation and construction ongoing for a new 156-room property at Puri, replacing the existing 33-room hotel; some rooms to remain operational during construction with a brief 3-month closure for integration work between towers (Page 14). - Expansion plans include opening Orchid Rishikesh (two hotels totaling 98+ rooms), Orchid Nashik (April opening), Orchid Panchgani (September opening), Bhavnagar and Dwarka (September openings), and Orchid Gwalior and Dehradun targeted for December openings (Pages 3, 9, 10). - Increasing banquet halls at Orchid Pune with new 7,000 and 5,000 sq ft halls and public area renovations funded from internal accruals (Page 5). - Revising Puri building plans due to new airport height restrictions, shifting from a 40-meter tower to a shorter 27-meter structure with larger base, aiming to boost MICE and wedding tourism facilities (Page 13). - The company is selective in property acquisitions, focusing on quality and large hotels (100+ rooms) for robust revenue and EBITDA growth (Pages 4-5).

- The management has highlighted that the company is currently a debt-zero company, having repaid its debt ahead of schedule. - Current debt is around INR 95-98 crores with an interest rate of about 10%, targeted to be reduced to 9% or below. - No explicit mention of any new fundraising through debt or equity in the near term was made. - The company seems focused on asset-light growth and internal accruals for expansion, such as renovations funded from internal accruals. - Corporate actions like merger approvals are underway but no direct indication of raising new capital was stated. - Overall, the management's tone suggests cautious and judicious financial discipline without immediate plans for fresh fundraising.

- The company is targeting to have around 30 operational hotels by the end of the current financial year. - Several new properties are planned to open soon, including: - Orchid Rishikesh (54 and 44 rooms), expected to open by August or September 2025. - Hotels in Bhavnagar and Dwarka scheduled for opening by September 2025. - Orchid Panchgani set to open by September 2025. - Orchid Nashik expected to open by April 2026. - Orchid Dehradun and Orchid Gwalior targeted for opening by December 2025. - The pipeline includes larger properties, such as a 156-room new hotel in Puri expected by 2027. - The company emphasizes qualitative growth and asset-light expansion, aiming to grow from ~1,825 rooms to ~2,500 operational rooms within this year. - Corporate merger approval from NCLT is pending, which relates to some corporate restructuring process.