Financial Performance and Regulatory Impacts
Samhi Hotels reported total income of ₹12,790 mn for FY26, exceeding its initial guidance of 9-11%. The consolidated EBITDA reached ₹4,626 mn, reflecting a margin of 36.2%. However, profitability was partially offset by structural regulatory changes, including a ₹180 mn impact from GST rate adjustments and a ₹35 mn hit from the new labor code implementation.
Despite these headwinds, the company achieved an 8.8% growth in EBITDA. On a same-store basis, the Revenue Per Available Room (RevPAR) saw a healthy 9.5% improvement, signaling strong underlying demand across its operating portfolio.
Strategic Expansion and Portfolio Mix
The management is steering a strategic shift toward the 'Upper Upscale' and 'Upscale' segments, which currently account for 43% of revenue. The company aims to increase this share to 60% in the medium term. Central to this growth is a committed pipeline of ₹22,000 mn, including high-profile projects like the W Hyderabad and Westin Navi Mumbai, which will add 700 rooms to the inventory.
Additionally, the acquisition of RARE India allows Samhi to enter the asset-light 'Experiential Leisure' market, diversifying its revenue streams beyond traditional corporate-led hotel demand.
Management Outlook and Sector Dynamics
Management expressed confidence in sustained demand, citing robust commercial office absorption as a primary driver for business travel. While geopolitical conflicts in the Middle East impacted room night yields in the final quarter, the overall outlook remains positive. The company is targeting a 78% revenue uplift through six identified transformative assets.
Financially, the focus remains on deleveraging, with a goal to bring the Net Debt/EBITDA ratio down to approximately 2.5x. The industry environment remains favorable with high occupancy rates in Tier-1 cities, supporting the company's pricing power.
What to Watch
- Operational launch of the 700-room pipeline including Westin Navi Mumbai and W Hyderabad.
- Ability to reach the medium-term Net Debt/EBITDA target of 2.5x through organic cash flows.
- Scalability of the RARE India asset-light model in the experiential leisure segment.
- Impact of continued geopolitical volatility on international travel yields and margins.
Management Commentary
We have seen tangible outperformance in our income growth despite significant macro headwinds and regulatory shifts during the fiscal year.
