Brigade Hotel Ventures Ltd (BRIGHOTEL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Brigade Hotel Ventures Limited Q2 FY '27 earnings conference call. Before we begin, I would like to remind participants that this conference call may contain forward-looking statements which are based on the beliefs, opinions, and expectations of the company as of today. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity to ask questions after the presentation concludes. Should you require assistance during the call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. With this, I now hand the conference over to Ms. Nirupa Shankar, Managing Director of Brigade Hotel Ventures Limited. Thank you, and over to you, ma'am.
Nirupa Shankar (Brigade Hotel Ventures Ltd): Thank you. Good afternoon, everyone, and a very warm welcome to the Brigade Hotel Ventures Limited Q2 FY '27 earnings conference call. I'm joined today by members of our senior leadership team. First of all, our Chairman, Mr. Jaishankar; Mr. Vineet Verma, our Director; Mr. Vineet Gupta, our CEO; Mr. Anand Natarajan, our CFO; Mr. Ryan Aranha, our Vice President; Nikhil Jaju, Senior Business Analyst; and now we're also joined by Amar Mysore, our Director. I will now dive deeper into this quarter's performance compared to Q2 of FY '26. Our growth for this quarter is rate-led. ADR for the portfolio grew by 11% from 7,100 to approximately 7,900. This is something we actively worked towards in the portfolio over the last three quarters to increase the ADR, and I'm very happy that we achieved it. We are now working to increase the ADR of each of our individual hotels to above 7,500, which we are working to do over the next few quarters. Occupancy stayed relatively flat for our portfolio at 75%, with 76% of our customers coming in from domestic demand, a Y-o-Y increase of just 1%. Our room revenue, F&B revenue, and total revenue increased by 10% for the quarter compared to the previous quarter of FY -- compared to Q2 FY '26. What we're very happy about is that EBITDA increased by 26% from 130 crores to 142 crores for the half year, thereby increasing our margins from 32% to 37%. We were able to sustain our margins through tight cost control, with employee and operating costs growing below the revenue growth. The margins increased substantially despite the GST 2.0 impact with 1.6% impact on margins coming from the GST aspect. Profit doubled from 11 crores to 22 crores, and lower financing costs helped double this profitability. On the F&B side, the quarter marked a clear turnaround. After a muted Q1 impacted by dry events calendar and cancellations due to the West Asia crisis, MICE activity picked up meaningfully this quarter on the back of strong domestic demand. Large electronic conferences hosted in Bangalore in September contributed to both rooms and F&B, and F&B returned to double-digit growth for the quarter. Moving to market-wise performance. Bangalore developed a strong quarter with ARR growing 8% Y-o-Y to 9,400 ADR and an occupancy improving from 81% -- improving to 81% from 78% last year, resulting in 12% RevPAR growth to 7,600. Unlike the first quarter when we chose to optimize occupancy in a softer demand environment, this quarter we were able to grow both rate and occupancy.
Nirupa Shankar (Brigade Hotel Ventures Ltd): a reflection of the recovery in the corporate and MICE demand in the city. Across our other markets, ARR grew by 13% YoY to 6,300 while occupancy moderated to 70% from 74% last year, resulting in a RevPAR growth of 8%. This was a deliberate attempt to play on ARR in cities like Grand Mercure GIFT City and Mysore. In Mysore Grand Mercure, we were able to improve our ARR by 27% YoY, improving its positioning in the market. The ibis Styles, Mysore, also recorded a healthy 68% occupancy in its second year of operations. At Grand Mercure, Ahmedabad, GIFT City, ARR grew by 16% and RevPAR grew by 37% as the business ecosystem in GIFT City continues to deepen. The Courtyard by Marriott, Kochi, Infopark, completed its first full quarter after rebranding with ARR growing by 17%. Occupancy is still on the way to increase. It declined for this quarter, but we believe that it is temporary, and we will see the uptick in the occupancy in the coming quarters. Looking ahead to the third quarter, we are encouraged by what we are seeing so far. October trends and forward inquiries indicate a strong Q3, supported by festive demand, the start of the wedding season, and healthy MICE calendar across our markets. Industry outlooks also point to stronger growth in the second half of FY '27 as corporate travel normalizes and international arrivals gradually recover. We also remain firmly on track with our portfolio expansion strategy. The Courtyard by Marriott, Chennai, at World Trade Centre, a 45-key hotel in one of Chennai's key business districts is well on track to open in H2 of FY '27. In parallel, we are actively evaluating acquisition opportunities that fit our portfolio and return criteria. Together, these can meaningfully add to our growth in the second half over and above the performance of our existing portfolio. We have a clear growth runway with 1,700 keys under development, set to expand our portfolio to 3,300 keys by FY '31, anchored by brands like Grand Hyatt, InterContinental, and JW Marriott and the Ritz-Carlton across markets of Chennai, Hyderabad, Kochi, and Bangalore. This will lift our luxury and upper-upscale mix from 14% today to 31% by FY '29 and 38% by FY '31. Of our 3,600 crore planned CapEx for this expansion, 484 crores has been invested till September 2026. On the sustainability front, renewable energy now accounts for 67% of our total energy needs across the portfolio. With a strengthened balance sheet and clear development pipeline, we will remain well-positioned to continue delivering growth in both revenue and profitability. With that, I would now like to hand over the call to our CFO, Mr. Anand Natarajan, to take you through the financial highlights in detail.
Anand Natarajan (Brigade Hotel Ventures Ltd): Thank you, Nirupa. And good afternoon, everyone. I will take you through the key financial highlights for the quarter. On a consolidated basis, total income for Q2 FY '27 stood at 142 crores, up by 10% year-on-year. Room revenue grew 10% to 87 crores, and F&B revenue grew 10% to 46 crores. Consolidated EBITDA for the quarter came in at 52 crore compared to 41 crore in Q2 FY '26, translating to an EBITDA margin of 36.7%. GST 2.0 had an impact of 1.4% on our EBITDA margin for the quarter. Finance cost declined to 9.7 crore from 33.5 crore in Q2 FY '26, following the debt repayment from our IPO proceeds. Profit after tax stood at 22 crore compared to 11 crore in Q2 FY '26, growing 105% YoY. On the operating side, ARR for the quarter stood at 7,876, up by 11% year-on-year with occupancy at 75.2%. This translated into RevPAR of 5,922, a growth of 10% year-on-year. For H1 FY '27, total income stood at 273 crore, up by 7% YoY. EBITDA grew 18% to 98 crore with a margin of 35.8%, and GST 2.0 had an impact of 1.6% on EBITDA for
Anand Natarajan (Brigade Hotel Ventures Ltd): PAT stood at Rs. 39 crore compared to Rs. 18 crore in H1 FY '26, growing 122% YoY. Sorry. ARR for H1 FY '27 stood at Rs. 7,559 up 9% with occupancy at 75.4%, translating into RevPAR of Rs. 5,702, up by 9% YoY. As on 30th September 2026, our net cash position stood at Rs. 29 crore. On debt and deleveraging, post IPO, we deployed Rs. 468.1 crore of the proceeds towards debt repayment. The benefits are already visible with finance cost declining by over 28% to Rs. 9.7 crore in Q2 FY '27 compared with 13.5 - Rs. 13.5 crore in Q2 FY '26. We have also further optimized our cost of debt by refinancing our loan from a unsecured facility at 10.25% to a secured facility at 8.1%. Of the approximately Rs. 3,600 crore CapEx plan for our upcoming projects, Rs. 484 crores has been deployed, of which Rs. 84 crore was incurred during H1 FY '27. We expect to deploy a further Rs. 400 to Rs. 450 crores in H2 FY '27, including capital earmarked unidentified acquisition. With this, I conclude the financial highlights for the quarter. We will now be happy to take your questions. Thank you.
Moderator: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone. If you wish to remove yourself from the question queue, you may press "*" and "2". Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Karan Kamdar from Choice Institutional Equities. Please go ahead.
Karan Kamdar (Choice Institutional Equities): Hello. I hope I'm audible.
Moderator: Yes, please.
Karan Kamdar (Choice Institutional Equities): Yeah. Congrats on a great set of numbers. My first question is on the differential in occupancy trends between Bangalore and non-Bangalore. So, what happened there? And can you throw some more color on will this normalize and will both reach some equilibrium or what is our strategy there?
Vineet Gupta (Brigade Hotel Ventures Ltd): Thank you for your question. This is Vineet responding to you. Bangalore, we have all mature stable assets which are delivering optimized occupancies. However, in other cities, ibis Styles in Mysore is a 2-year-old hotel where we are price positioning, and it's expected to reach its stabilized occupancy next year. In Kochi, we rebranded our hotel only 4 months ago from Four Points to Courtyard, where we took the rate positioning by 17% rate increase. Again, as a result, we displaced a lot of low paying accounts, which will stabilize over the coming two to three quarters leading to the full potential of the occupancy. Similarly in GIFT City, the market's showing greater strength and growing rapidly towards the higher 70, 70s occupancy. So, putting them all together, we would be leading to higher occupancy in other states similar to Bangalore in coming few quarters to 12 months.
Karan Kamdar (Choice Institutional Equities): Okay, okay, great. Sir, we saw a couple of announcements from Brigade Enterprises regarding two hotels, both of them in Bangalore. And we've read in the news that Brigade has signed a contract with Grand Hyatt for management. So, any strategy or plan for Brigade Hotels in participating in these assets?
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