Samhi Hotels Ltd Q1 FY27 Earnings Analysis

- Long-term same-store revenue growth guidance is stable at 9% to 11% annually, maintained since IPO despite market fluctuations. - FY27 expected same-store revenue growth is about 9% to 11% Y-o-Y, reflecting a cautious outlook amid ongoing crises. - New hotel openings, notably W Hyderabad in FY28, expected to add an incremental 6% to 7% revenue growth that year. - Beyond FY28, significant openings like Tribute Bangalore, Westin Bangalore, and Noida development will drive further growth. - Overall, total revenue growth (including new openings) in FY27 estimated around 10% to 11%. - Management acknowledges potential upside beyond guidance with stronger-than-expected market conditions, which would accelerate EBITDA and margins. - Revenue growth is expected to be supported by micro-market evaluations, with focus on core areas to manage supply-demand effectively.

- SAMHI Hotels expects long-term same-store revenue growth of 9% to 11%, maintained consistently since IPO (Page 16). - EBITDA growth is expected at around 9% to 10%, generating incremental INR 700 crores free cash from existing assets over 5 years (Page 17). - New hotel openings (e.g., W Hyderabad in FY28) will contribute an additional INR 400-500 crores EBITDA by FY31 (Page 17). - Capital expenditures are planned around INR 250-270 crores annually for FY27 and FY28, mainly toward new hotels and renovations (Page 11). - Margins are expected to remain stable at approximately 38%, despite permanent GST impact (Page 7). - Interest costs are forecasted at INR 135-140 crores for FY27 considering expected interest rate hikes (Page 11). - Management is cautious in outlook but optimistic for upside beyond these conservative estimates (Pages 14-15).

- FY27 capex allocation is about INR 250-270 crores. - Major investment is INR 150 crores towards the W Hyderabad, targeted to open by end of FY27. - Remaining capex for ongoing Westin Bangalore work, maintenance, and minor renovations at Four Points Pune and Jaipur, and some leisure investments. - FY28 capex expected to be similar at INR 250-270 crores, primarily directed towards Westin Bangalore. - Capex plans are secured by a stable free cash flow base (~INR 310 crores) over the next 4-5 years. - Company focuses on disciplined capital allocation with an asset-light, leasehold strategy for growth. - Asset recycling targeted at INR 200-250 crores over the next 2 years to redeploy capital in higher-growth opportunities. - Board will consider shareholder returns once leverage and capex plans are on track.

- The company targets to reduce net debt-to-EBITDA leverage from the current ~3.07x to a stable 2.5x within the next 12 to 18 months (Page 16, 24). - They are focused on disciplined capital allocation to support growth, capex, and deleveraging without disturbing long-term prospects (Page 24). - There is no explicit mention of immediate new debt or equity fundraisings planned. - Minority dilution (equity) is mentioned only as a longer-term strategic option, dependent on value creation in assets (Page 19). - Free cash flow generation (~INR 310 crores) is expected to largely fund capex and growth over the next 4-5 years, suggesting internal funding is prioritized (Page 16). - Asset recycling initiatives (selling non-core assets worth INR 200-250 crores) aim to redeploy capital into higher-ROCE opportunities, potentially reducing the need for external fundraising (Pages 18-19).

- The opening of the W Hyderabad hotel is scheduled for 2027, with most of the work expected to be completed by the end of the year. - Hyatt Regency Pune's pre-opening status is due to 22 completed apartments awaiting final regulatory approvals. - Capital expenditure for FY27 is allocated at INR 250-270 crores, largely for W Hyderabad (INR 150 crores) and Westin Bangalore, including minor renovations at Four Points Pune and Jaipur. - FY28 capex is expected to be in a similar range and primarily directed towards Westin Bangalore. - The balance INR 150 crores from GIC's committed investment will be received over the next two years, aligning with Westin Bangalore's capex spending. - There are no current plans for investments at the subsidiary level; only identified smaller hotels valued at around INR 200 crores may be considered.