Kamat Hotels (India) Ltd (KAMATHOTEL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Kamat Hotels India Limited Q2 H1 FY2027 earnings conference call, hosted by Valorem Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you.
Purvangi Jain (Valorem Advisors): Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Kamat Hotels India Limited. On behalf of the company and Valorem Advisors, I'd like to thank you all for participating
Purvangi Jain (Valorem Advisors): company's earnings conference call for the second quarter and the first half of the financial year 2027. Before we begin let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Mr. Vishal Vithal Kamat Executive Director, Mr. Milind Wadekar Chief Financial Officer, and Mr. Nikhil Singh Company Secretary and Compliance Officer. Without any delay I request Mr. Vishal Kamat to start with his opening remarks. Thank you and over to you sir.
Vishal Vithal Kamat (Kamat Hotels (India) Ltd): Namaskar all, thank you Purvangi for the introduction and thank you Valorem Advisors and thank you all for participating in this call. First and foremostly, I'd like to as already mentioned my colleague, Mr. Milind Wadekar and Mr. Nikhil are with us. The results have been we we're very happy to share the kind of progress we've had. I believe that many of you have gone through them and I thank you for taking this time to go through having recorded a great quarter EBIDTA with margins of the Q2 FY 27 up 1300 basis points year on year to 26% and EBIDTA more than doubling to 224 million and the occupancy also going up by 800 basis points. With all this coming up the ARR, RevPAR also has improved by 20%. We also have a set of FY 30 vision of the hotels of the Kamats with the number of keys being increased by more than 50% to excuse me, sorry, 3000 keys. And the average room rate also we're looking at increasing step-by-step more than 30% to 8000 on a whole. So, this would happen because of the various new properties coming in. We have in the month of December, January Gwalior which will open up, apart from that we also have Dwarka, Nashik. Though they are under management, Gwalior is under lease but Dwarka under management. We expect that these properties also will add a lot of boost adding more than 250, 266 keys to our portfolio, apart from other additions which are there. Further even our Rishikesh and our Dehradun will eventually also come in. So, we have a nice pipeline and side-by-side a active discussion pipeline also going forward. Mr. Milind Wadekar will take you through the details in his remarks which he has prepared along with any questions and answers we will be happy to answer. Let me just give you a brief overview of the hospitality industry. The key trends that have shaped the quarter by and large the Indian hospitality as a whole has delivered a resilient result. This has various reasons. Well, that it has shown a good performance despite having challenges of war, fuel shortage, the fuel monsoon seasonality, aviation erraticness, and other various, you know, West Asian geopolitical tensions. Some going in our favor, some adding to the top line, some going against us hitting us at a bottom line, yet, overall the industry has and in that Kamat Group has managed these challenges very well due to certain foresighted decisions also which we'll articulate ahead. Typically, H H1 quarter two the quarter two is a very poor general quarter because of monsoon and because of various other aspects happening in it. You know, you have Pitrupaksh and others in so and all this aspects make the overall spending lower in sentiment and in practicality. But this a quarter two has been excellent in terms of the overall performance by various of our hotels and hence, quarter one has given a holistic improvement. Typically, quarter two accounts for 60-65% of the annual business. So, based on that we feel the year ending also will be fairly robust. Hospitality where its leaders have also shared their figures how their overall revenue has grown anywhere between 12 to 17%, you know, and within that also in the hotel segment particularly. So, we are also optimistic about H2 and FY 27 end being quite robust and encouraging. Even our October numbers are fairly encouraging in terms of
Vishal Vithal Kamat (Kamat Hotels (India) Ltd): you know, now having a good October, otherwise normally October end is when Diwali is there, first week November. This year November may not be as great as what it was last year because having Diwali bang in the middle of November, but the second half of November already looks very very strong. So that's a very good. And then December is what it is, December is December. So, demand remains intact in various segments. Large-format MICE, which we are specializing in and various other events, that is also happening. Wedding season, this year's wedding season is not as strong as last year, and yet it has been a very good support for the weekdays and weekends. You know, there has been a sustained demand in leisure, spiritual tourism is still going strong, and by and large the industry is still seeing the benefits of premiumization trend, which is still delivering a very good result for hospitality and other industries also. So the gradual recovery of foreign tourists we expect, though that is not not going to have a very significant considering that today in all honesty, Indians are richer than many of the foreign country tourists. So Indians are more sought after because they are spending better as compared to many of the foreign tourists who are coming on a shoestring budget or on a limited, but that said, we are seeing very good growth in Goa. When we do have in our Orchid Passaros particularly, we have a very high percentage of foreigners who stay with us. So there we see that there has been a very robust demand, and hence, Q3 also, we seem to be on a good track. In line with our industry peers, we remain optimistic. We are focusing on driving our RevPAR, moving our, you know, unit level operational efficiencies further, lot of things like we mentioned we did which had a high CapEx, but have given us a long term benefit. Electrifying our hotels is one of the main, where be it EV cars, we have the first in the industry to adopt EV cars for our hotel fleet. And you know, and today we are at 100% all EV cars within our organization. So, including my own personal car, which is also EV. With that much we believe that we walk the talk. Similarly, in terms of kitchens also, many of our kitchens, which are being upgraded, as they are being upgraded, they are though the cost of an electric kitchen is higher, various such decisions helped us weather the storm during the war, because we have an electric kitchen in Pune Orchid, where we can where we are making at times even 3,000 to 4,000 meals a day. In fact, more than that, when we consider breakfast, lunch, and dinner, and the entire kitchen over there is 100% electric. Hence, you know, we were able to weather the shocks of even PNG and rather LPG problems. So, there is a lot of focus on this. We're also strengthening further our digital sales and distribution. We're also looking at our expansion in terms of a disciplined, asset-light approach, while maintaining our net cash being positive philosophy, as Mr. Milind will further share, be it, you know, the debts on our books, which is actually, from the last year or plus, has been a non-issue, but still, it shows that how the company is using its surplus, its cash generated to renovate, upgrade, expand, and at the same time, retire, repay existing debt faster than we need to, so that we maintain a financial discipline and have a good, healthy balance sheet and a future opportunity of a, if there is any thing. With that, I'd like to hand over to our CFO, Mr. Milind, to please take you all through the financial performance. Thank you, Milind. Thank you, everyone. Please, Milind ji.
Milind Wadekar (Kamat Hotels (India) Ltd): Thank you. Thank you, sir. Good evening, ladies and gentlemen. Let me now take you through what has been a breakout quarter for us. This was not just a growth, but this was a decisive turn around in profitability. Our revenue for the quarter has gone up 12% to 86 crores in a seasonally soft monsoon quarter. EBITDA was at 22 crores, up 131%, more than doubling in a single quarter. EBITDA margin stood at 26%, a massive 13 percentage point expansion. This is the operating leverage, which is at the best. I mean, each revenue is adding to our EBITDA margin, EBITDA and EBITDA margin. PAT was at 5 crores versus loss of 2 crores last year in Q2 FY26. We have moved decisively from loss to profit with PAT margin at 6%. Now, when we look at half year numbers, revenue was 179 crores, up 11% year-on-year basis. EBITDA, we crossed 50 crore mark for the half year, up 67 67%, with margin at 28%.
Milind Wadekar (Kamat Hotels (India) Ltd): nearly 1 in every 3 rupees of revenue now flows into EBITDA. PAT at 15 crore with PAT margin at 8%, a clear demonstration that our business model is now structurally profitable and scalable. Now what this tell what this tells you is simple. Our revenue engine is growing, our cost are tightly controlled and every incremental rupee in revenue is dropping to the bottom line at a much faster pace. We are not just growing, we are growing profitably. And this is the only beginning of H2 up upcycle. Now let me take you to same store numbers, I mean what we mean by same store is we have excluded IRA Mumbai and Orchid Shimla from Q2 FY '26 and IRA Bhavnagar from Q2 FY '27. IRA Mumbai was operated by us on lease till 31st March '26 and its revenue, cost and EBITDA were included in quarter two FY '26 numbers. Orchid Shimla has now been converted into management contract from erstwhile revenue share lease model. And IRA Bhavnagar is new property added to our portfolio in the current financial year. Now if we with this adjustments, our revenue was up 31% same-store basis to 85 crores, EBITDA up 98% to 23 crores, almost double and EBITDA margins were at 27%, up 900 bps, 9 9 percentage points here. Now, we are not just filling rooms, we are filling them more profitability than ever before. Now let's look at the balance sheet and our net cash philosophy. As of 30th September 2026, our gross debt was 96 crore, cash, cash equivalent was 65 crore, and net debt was 31 crore. Now if we look at net debt to EBITDA, it was 0.0 23x versus 0.52x as of last quarter, more than hal halved in just one quarter. I mean from 0.52, we are at 0.23. And we did not stop there. Subsequent to quarter end, we have repaid 30 crores loan to Axis Finance Limited. Now our debt are really manageable position, we are at 31 crore net net debt. Bottom line looks strong. we expect profitability to grow at much faster pace in H2. Looking ahead, our growth is not incremental. It is transformational, anchored in our KHIL 3.0, 3 3.0 vision for FY30 FY2030. We are building a larger, stronger and far more profitable company. Our foot footprint will expand from 10 states to 11 states. Our portfolio will expand from 24 to 31 properties. Inventory will increase from 1,900+ keys to 3,000+ keys. ARR we are targeting at po- portfolio level, a 33% lift from existing 6,000 to around 8,000. And this is not just expansion. This is scale with pricing power. Our H1 performance proves the model works. Revenue is growing, margins expanding by 800, 900 bps, debt collap- collapsing to near-zero, and profitability compounding. As we enter H2, the strongest half of the year, we are entering with momentum, with a strong balance sheet and with a clear aggressive growth map, a growth map with asset-light model. We remain razor focused on three things, driving operating efficiencies in our hotels, executing our expansion at pace, and creating sustainable long-term value for all our shareholders. With that, I conclude my remarks and request the moderator to open the floor for question and answers. Thank
Moderator: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have the first question from the line of Anil, an individual investor. Please go ahead.
Anil: Good evening. So my question is, the EBITDA margin has expanded to 26% in Q2 FY27. What were the key contributors to this improvement? And how much of the margin expansion can be sustained over the coming quarters? Can you please elaborate on it?
Milind Wadekar (Kamat Hotels (India) Ltd): Okay. Now, Anil, if you look at our ADR, ADR growth was flat, around 3%. But our occupancy has grown from 50 to 58% at portfolio level. So higher the occupancy, higher revenue, and excluding the variable cost, everything flows into EBITDA. So that's how our EBITDA margins have improved. Our Pune hotel has done well compared to last year. I mean, they have shown revenue growth of 32%. That has helped us. Our Bhubaneshwar hotel has done well. So all this put together along with the efficiencies what we are bringing in in our hotels on cost side has helped us to improve this margin. And this margins are sustainable. Now we are looking at each head of cost. We are controlling cost and maximizing revenue. So we will continue showing good margins quarter-on-quarter basis.
Anil: Okay, sir. Got it. And my follow up question is, given the improvement in occupancy and RevPAR, what was What is the outlook for revenue growth in H2 FY27? Should we expect growth to be driven primarily by higher occupancy, ARR improvements or contributions from new properties?
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