Viceroy Hotels LtdQ1 FY27
Viceroy Hotels Ltd Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹120P/E: 37.0Market Cap: ₹843 CrSector: Leisure Services
Management growth scorecard
Revenue
Category 3
Margin
Category 1
Fundraise
Yes
Order
N/A
Capex
Yes
3 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 3- →The company expects a strong revenue jump from renovated assets, with Phase 1 at Courtyard driving revenue north of INR50 crores from a previous INR30 crores, a 60% increase.
- →ADR (Average Daily Rate) growth is anticipated at 10-12% specifically in Hyderabad and Bangalore for upscale hotels over the next 2 years.
- →The business strategy focuses on increasing occupancy and RevPAR through renovation completions and reopening the convention center.
- →Executive Apartments segment has strong occupancy with potential for ADR hikes due to supply shortage in long-term stay offerings.
- →Management targets EBITDA margins above 30% for FY27, progressing towards a long-term 40% margin with new assets and portfolio expansion.
- →The company actively seeks selective growth opportunities including Greenfield, Brownfield, and distressed assets to enhance the portfolio and revenues.
Margin guidance
Category 1- →The company targets maintaining and exceeding EBITDA margins of 30% in FY27, aiming for a long-term 40% margin with full renovation completion and addition of convention center facilities.
- →Revenue growth is expected, with Phase 1 renovations delivering a 60% jump from ~INR30 crores to over INR50 crores in annual revenue.
- →ADR (Average Daily Rate) growth anticipated at 10%-12% in key markets like Hyderabad and Bangalore over the next 2 years, outpacing national averages.
- →The Greenfield 200-room Courtyard project is expected to start construction in Q4 FY27 and become operational in FY29-FY30, supporting future revenue growth.
- →Expansion includes integrating executive apartments and ancillary businesses with high ADRs to strengthen profit contributions.
- →The company anticipates more acquisitions, including possible distressed assets, to grow earnings.
- →Overall, profitability is expected to improve with the combination of ramped-up occupancy, rate hikes, and cost efficiencies post-renovations.
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Fundraise plans
Yes- The company has applied for approval for a rights issue to raise around INR107 crores.
- The rights issue proceeds are intended primarily to repay debt and maintain borrowing capacity for the Greenfield project or future expansions.
- The rights issue is linked to meeting SEBI's mandate to reduce promoter shareholding below 75% by October.
- The company currently has a debt-equity ratio close to 1 and can raise an additional INR100 crores of debt based on the current portfolio.
- Existing long-term debt has a blended interest rate of around 8.7%-9% with repayments of about INR39-40 crores annually.
- No indication of new separate SPVs or promoter-side equity for acquisitions; all acquisitions and expansions are through the main entity.
Hence, fundraising activities include planned rights issue and potential debt raising to support growth and debt repayment.
Order book
The transcript provided does not mention any information related to current or expected orderbook or pending orders for Viceroy Hotels Limited or related entities. The discussion primarily revolves around financial performance, renovation updates, revenue metrics, operational efficiencies, acquisition details, and growth strategies within the hospitality sector. No references to orderbook or pending orders are made in the document.
Capex plans
Yes- →A Greenfield project: a new 200-room Courtyard hotel in Madhapur, with a total project cost of around INR120-130 crores and expected construction start in Q4 FY27. Expected operations by FY29-FY30.
- →Ongoing renovation phases: Phase 1 at Courtyard is complete; Phase 2 and Phase 3 renovations focus on Marriott Hotels and are expected to complete by December FY27.
- →Rights issue approval pending to raise INR107 crores primarily to repay debt and keep headroom for Greenfield project/future expansion.
- →Actively evaluating brownfield and distressed hospitality assets for strategic acquisition to expand portfolio, with no separate SPV planned.
- →Capital work-in-progress stands at INR8 crores (consolidated) mostly related to Courtyard renovations.
- →The company aims to enhance asset quality, operational efficiency, and portfolio growth prudently aligned with capital discipline.
How does Viceroy Hotels Ltd rank vs peers in Leisure Services?
Pro feature1Viceroy Hotels Ltd
Rev 3Mar 1
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How does Viceroy Hotels Ltd rank in Leisure Services?
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