This article first appeared on GuruFocus .
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Total Income:INR308.3 crores for Q1 FY2027, up 7.3% year-on-year on a reported basis; comparable revenue growth was 10.8% after adjusting for one-time items.
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Same-Store RevPAR:Grew 9.6% year-on-year to approximately INR5,220.
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Portfolio Occupancy:79.3%, up from 74.2% in the year-ago quarter.
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EBITDA:Reported lower by 4% year-on-year, but on a comparable basis grew healthily at approximately 12.1%.
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Finance Costs:Declined 25.5% year-on-year to INR27.7 crores.
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Profit Before Tax (PBT):INR32.7 crores, up 26.4% year-on-year.
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Net Debt:Approximately INR1,490 crores as of June 30, 2026.
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Net Debt-to-EBITDA:Approximately 3.2x on a trailing 12-month basis; approximately 2.4x for operating assets excluding growth capital.
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Effective Interest Rate:7.8%, approximately 300bps lower than at the time of IPO.
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Domestic Traveler Mix:Domestic travelers made up 82% of room nights sold, up from 78% a year ago.
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High-Occupancy Days:36% of days in the quarter saw occupancy exceeding 90%.
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Release Date: August 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Same-store RevPAR grew 9.6% year-on-year to approximately INR5,220, with portfolio occupancy up to 79.3% from 74.2%.
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Comparable revenue growth was 10.8% year-on-year, excluding one-time items, and same-store total revenue growth was around 9-9.5%, within the guided 9-11% range.
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Finance costs declined by 25.5% year-on-year, and net debt-to-EBITDA improved to approximately 3.2x on a trailing twelve-month basis.
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Domestic travelers now make up 82% of room nights sold, providing resilience against international travel disruptions.
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The company has a strong growth pipeline with 1,660 rooms across seven new hotels in upper upscale and upscale segments, expected to increase upscale revenue share from 41% to 60% by FY2030.
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RARE India platform has expanded to 75 hotels and is expected to generate INR35-40 crores EBITDA within two years, with a high return on capital employed.
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July 2026 trends show stronger performance with rate growth returning, indicating a positive outlook for H2 FY2027.
Negative Points
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Reported EBITDA was lower by 4% year-on-year due to one-time items and GST impact, though comparable EBITDA grew 12.1%.
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ARR growth was nearly flat year-on-year, with rate growth diluted by softer international business due to geopolitical disruptions.
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F&B revenue growth slowed to 3.7% due to lower international traveler spending, a restaurant renovation, and event cancellations.
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The GST regime change from 12% with input tax credit to 5% without it negatively impacted margins, particularly in mid-scale hotels.
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The company has taken an enabling resolution for a capital raise of INR750 crores, which may create an overhang of potential equity dilution for investors.
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The Itmenaan Estate acquisition in Uttarakhand has underperformed recently, though management expects improvement with RARE relisting.
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The Navi Mumbai project is large and will require significant capital, with major investments expected in FY2029-FY2030, and construction is expected to take 3-4 years.
Q & A Highlights
Q: Can you talk a bit more about the Itmenaan Estate acquisition in Binsar Almora? With RARE India and now Itmenaan, you've already deployed INR60 crores towards leisure. How are you thinking of leisure as a part of your business in your 2030 outlook? A: (Ashish Jakhanwala, MD & CEO) The hotel's recent performance was not reflective of its potential because the owners moved to Canada, and it was delisted from RARE. It will now be relisted, and with the combination of RARE and potentially the Marriott Bonvoy Outdoor Collection, it should reclaim its price positioning of INR20,000 to INR40,000. On capital allocation, the total investment in RARE is around INR47 crores, and with Itmenaan, it's about INR60 crores. Over a 4-5 year view, leisure will remain a small portion of capital allocation, in the zip code of 10% plus/minus. However, the value creation will be disproportionate because these hotels have an arbitrage where the capital required and the average room rate produced are totally disconnected.
Q: If I look at the RevPAR performance, ARRs were largely flat on a YoY basis with a 2-3 percentage point improvement in occupancy. For the rest of FY2027, how much growth is penciled in via ARRs vs occupancy? Also, have you seen a sharp recovery in July? A: (Ashish Jakhanwala, MD & CEO) In the first six months, occupancy will drive total revenue growth. We can now easily underwrite 70% to early 80% occupancy for business hotels. However, the domestic share of occupancy has gone from 78% to 82%, and international business always came at a premium of 10%-20%. As we re-balance domestic vs international in H2, rate will automatically come to the portfolio. July is trending far ahead of where we ended the previous quarter, and we are seeing growth in rate now which we did not see in Q1. However, one month is never representative of the balance of the year.
Q: My question is on RARE. Out of 75 hotels, roughly 40 have agreed to be part of the Marriott Outdoor Collection program. Were we expecting this trajectory, and what could be the reason for not signing up? A: (Ashish Jakhanwala, MD & CEO) The sign-ups are far ahead of our own expectations. About 10-12 hotels are currently on other similar platforms (like Mr. and Mrs. Smith), and we don't want to interrupt existing contracts. For the balance, it's about getting in touch with owners, explaining the benefit analysis, and doing property reviews for fire and safety measures. It's just a matter of time and process. The level of confirmations is a lot more encouraging than what we anticipated originally.
Q: Given the promoter holding is slightly lower and given the free cash generation, any specific reason to go ahead and take this enabling resolution for a capital raise of INR750 crores? A: (Ashish Jakhanwala, MD & CEO) Starting last year with Operation Sindoor, Indigo crisis, and Middle East crisis, every quarter we've seen something unexpected. While SAMHI has weathered these storms well due to strong domestic demand, the world is clearly not normal. Sometimes when the world is not going right, you get hit with opportunities. We have one promise we will never violate: financial discipline and balance sheet strength. We want the board to be capable of taking decisions in time. You should expect this enabling resolution every year as a practice to provide the board with financial flexibility.
Q: If I look at ADR growth, it's the lowest in the last two quarters. Is it primarily because of West Asia disruption? With occupancy touching 79%, is it a tactical play of lower rates to bump up occupancy? A: (Ashish Jakhanwala, MD & CEO) A 79% occupancy indicates a very strong and resilient demand environment. The West Asia crisis has led to disruption in international inbound travel, causing rate growth to be soft. We focus more on total revenue growth. Same-store total revenue growth was around 9%-9.5%, squarely in the 9%-11% zip code we've guided. In July, we've already seen total revenue growth split between half rate and half occupancy. We also see the margin profile significantly improving due to the GST impact, new openings last year, and the increasing share of upscale which doesn't get affected by GST.
Q: You mentioned that rate growth was slower this quarter, but segment-wise, upper upscale rate growth was softer than mid-scale. Is there a pattern where upper upscale underperforms when demand softens due to down-trading? A: (Ashish Jakhanwala, MD & CEO) The raw average room rate was in the zip code of 3.5%-4% for all segments. The mid-scale outperformed with RevPAR growth of 13.7%, led by very healthy occupancy levels of 81.3% vs 78.4% for upper upscale. For FY2027, we identified that the broader mid-scale had an opportunity to perform better, and it has delivered as we thought. Early indications are that the part of the portfolio that underperformed in FY2026 is performing really strong, and early trends for Q2 and beyond are far ahead of what we delivered in Q1.
Q: On the GIC investment, you mentioned evaluating a partnership for new opportunities. Can you highlight which assets and if any partnership is being evaluated for existing assets? A: (Ashish Jakhanwala, MD & CEO) We are not evaluating any partnership for existing assets. As per the GIC agreement, they have the right to participate with 35% in new upscale opportunities after we sign the joint venture agreement. The only opportunity signed since the GIC JV is the Ingka opportunity in Noida. The JV is structured so we share 65% (SAMHI) and 35% (GIC). The joint venture is extremely well capitalized with firepower to grow, but there is no conversation on existing operating assets. The Navi Mumbai and W Hyderabad projects were seeded prior to the GIC JV and will be 100% owned by SAMHI.
Q: In terms of RARE's revenue model, how is it different from your upper upscale and upper midscale? For INR100 of billing, how much do we get? A: (Ashish Jakhanwala, MD & CEO) There are
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
