Ladies and gentlemen, good afternoon, and welcome to Brigade Hotel Ventures Limited Q2 FY 2026 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, and there will be an opportunity for you to ask questions after the presentation concludes. Should you require assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone telephone. 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.
Good afternoon, everyone, and a very warm welcome to the Brigade Hotel Ventures Limited Q2 FY 2026 earnings call. I am joined today by members of our senior leadership team, Mr. Vineet Verma, Director, Mr. Ananda Natarajan , our CFO, Mr. Manoj Agarwal, our COO, Mr. Rayan Aranha, our Vice President. As most of you are aware, our portfolio comprises of nine operating hotels with 1,600 keys. Our model is a blend of asset ownership and global management partnerships with world-class hospitality leaders. Continuing with our philosophy of owning quality hotel assets at the right location, we are now entering a strategic phase of expansion, aiming to double our hotel portfolio by adding approximately 1,700 keys over the next five years. Our development pipeline has a healthy mix of both luxury deluxe properties, upscale properties, as well as a healthy mix of leisure and business properties.
Key upcoming projects include the Courtyard by Marriott in our Chennai World Trade Center project, two Fairfield by Marriott hotels in Bangalore, the Grand Hyatt Chennai on ECR, which is a leisure five-star deluxe hotel, and the InterContinental Hotel in Hyderabad, a landmark luxury development, as well as The Ritz-Carlton Wellness Resort in Vaikom, Kerala. We also have a JW Marriott in Chennai on Old Mahabalipuram Road and a Marriott in Thiruvananthapuram as part of our World Trade Center Thiruvananthapuram complex, and we have purchased the land for an upscale hotel near Tumkur Road in Bangalore. We are looking at a total CapEx investment of INR 3,600 crore over the next five years for these hotels. Coming to the current period performance in Q2 FY 2026, I am pleased to share that BHVL delivered a strong performance, with total income growing at 20% year-on-year, supported by healthy operating metrics.
EBITDA rose by 9% year-on-year to INR 41 crore, although it was impacted by an additional property tax expense of INR 6 crore. Excluding this, operational EBITDA would have registered a 25% growth year-on-year. A few of the performance highlights. Bangalore delivered a very strong performance with ARR growing at 19% and average occupancy of 75.6%, resulting in a 14% RevPAR. In GIFT City, the market continues to gain traction supported by growing commercial activity. Our hotels there delivered ARR and RevPAR growth of 23% and 16% respectively. Our Mysore hotels maintain strong occupancy, with newly launched ibis Styles Mysuru ramping up and achieving 61% occupancy in just its fourth quarter of operations. Our F&B business registered 14% year-on-year growth, driven by strong MICE, weddings, and social events. We remain committed to elevating guest experiences and driving F&B revenue across our hotels.
At Grand Mercure Bangalore, we have relaunched our signature restaurant, By the Blue, following a successful renovation. At Grand Mercure Gandhinagar GIFT City, renovation is underway for the bar, and we will additionally introduce a new Pan-Asian restaurant. We also have made efforts to improve cost control and productivity, and this continues to yield positive results. Utilities as a percentage of operating revenue stood at just 5.6% and 5.7% for H1, as opposed to 7% in previous quarters. Interest costs have reduced due to loan payments positively impacting the net profitability. We are actively advancing adoption of renewable energy, which currently stands at close to 60%, with some hotels exceeding 90% use energy. Looking ahead, we expect this growth momentum to sustain in H2 FY 2026, supported by robust corporate demand, festival travel, longer leisure stays, and the wedding season.
With that, I now would like to hand over to our CFO, Ananda Natarajan, to take you through the financial highlights.
Thank you, Nirupa, and good afternoon, everyone. I will be taking you all through the key financial highlights for the quarter and half year ended 30th September 2025. Starting with the financial performance for Q2 FY 2026, the total income stood at INR 130 crore as compared to INR 108 crore in Q2 FY 2025, an increase of 20% year-on-year. EBITDA was INR 41 crore against INR 38 crore in the same period last year, reflecting a growth of 9%. The company reported a profit after tax of INR 11 crore as compared to INR 7 crore in Q2 FY 2025, a growth of 58% year-on-year. Moving to the first half of FY 2026. Total income stood at INR 255 crore compared to INR 211 crore in H1 2025, an increase of 21%.
EBITDA for the period was INR 83 crore, up by 16% year-on-year from INR 72 crore in H1 FY 2025. PAT stood at INR 18 crore against INR 1 crore in H1 2025. Coming to the operational metrics for Q2 FY 2026, the ARR stood at INR 7,106 compared to INR 6,247 in Q2 FY 2025. Occupancy during the quarter was 75.6%. This translates into a RevPAR of INR 5,374, representing a year-on-year growth of 13%. For H1 FY 2026, ARR was INR 6,936 versus INR 6,310 in H1 2025, with occupancy at 75.1%. Consequently, RevPAR stood at INR 5,209, reflecting a growth of 11% year-on-year. From our IPO proceeds of INR 886 crore, INR 468 crore was utilized in Q2 FY 2026 for debt repayment, resulting in significant interest savings.
As of September 2025, we deployed an additional INR 107 crore for the acquisition of prime land parcel from our promoter and INR 17 crore towards general corporate purposes. In total, INR 592 crore has been deployed from the IPO proceeds by September 2025. Our net cash as on 30th September , 2025, stood at INR 111 crore and adjusted ROCE, ROCE were 9.9%. With that, I conclude the financial highlights, and I would like to open the floor for any questions. Thank you.
Thank you very much. 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 will wait for a moment while the question queue assembles. The first question is from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead.
Yeah. Good afternoon, everyone. Thank you for the opportunity. My questions are pertaining to the CapEx, which you have outlined as INR 3,600 crore. Could you just help us understand how will the phasing of this CapEx the next at least three to four years? Will it be spread out equally or it will be more front-ended or back-ended? That is the first question. And second part to that is, especially projects, for example, the InterContinental in Hyderabad. Now that we have paid for the land. But I understand it is with the mall and the office building. So how does the CapEx get phased out in that asset particularly? Yeah. Thank you. These are my questions.
Yeah. Thanks, Adhidev. As you know, with hospitality, most of the CapEx is usually back-ended, in the which is the design development phase and very initial for approval, very initial amounts for approvals. If you look at a hotel from our overall four-year cycle, including after it operates, because we keep some retention money, most of it is, I would say, back-ended, maybe 60% could be coming in the third year and maybe even in the fourth year. So for year one, you can look at just mostly design development, then about 20% year two. Year three also maybe another 30%- 40%. Balance in year four and some retention amount between 10%- 15% is kept even after the hotel operates. So when it comes to our hotels, we have started some construction, but mostly under design development.
And in this year we have a cash balance of about INR 350 odd crore, overall IPO proceeds and internal accruals, but we may not land up using all of it just yet. So like I said, we will be phased over five years and primarily back-ended. With regards to the InterContinental Hotel, like you rightly said, first the excavation is under progress and we should be starting with the mall initially, then the WTC Hyderabad, and only then will the hotel come up. However, some of the structural costs are common. But the hotel, our part will begin only after a year and a half or so.
Okay. Got that. And just one more question on, you mentioned that second half the business outlook looks pretty good. So anything you can say how October has been considering it is only obviously a lot of festivals, but obviously how is the business on books for November, December, especially for the business hotels? If you could just give some color on that.
Yeah, like you rightly said, October is a little bit on the slower side as expected, and it has been budgeted already because of Diwali festivals and some long weekends. But we should be able to make it up between November and December, which are clean months, and those two months are looking extremely strong. So nothing of concern for us in Q3 and Q4.
Okay. Thank you. All the best. Yeah.
Thank you. The next question is from the line of Murtuza Arsiwalla from Kotak Securities. Please go ahead.
Yes. Hi. Two questions from my side. One is when I look at the cash flow statement, there is a large INR 45 crore, which is coming in from changes in working capital for the first half of 2026. Can you just give the cycle numbers some color on that INR 45 crore number, please. Second, the ARR performance looks extremely strong, far better than what's on the peer set or the industry data points suggest. Any color on what we would have done differently or benefited from our markets for such strong performance because it's a very commendable one.
Hi. We couldn't hear the first part of the question. I heard the second part. If you could just repeat the first part on the INR 45 crore.
The first one is on the cash flow statement. There is a large INR 45 crore coming in from changes in working capital. Any color on what that number is or what it comprises of.
Yeah. See, the INR 45 crores consists of, there is a movement of trade payable because of provisioning for the bankers' payment for issue expenses we have provided, which is around INR 20 crore. There is a reduction in other assets, which is we have kept last year paid towards issue expenses. We kept as a prepaid, which has moved. That is around INR 13 crore. That is the major movement. Otherwise, working capital is on operational side, it's all flat. There is not much movement in this.
Sure.
The second part of the question, ARR, yeah, we are happy with the way the ARR has happened with close to 20% for the Bangalore hotels. This quarter, I think the revenue management teams are always figuring out how to best balance between rate and occupancy. Wherever possible, we do try to see if a rate enhancement is possible while keeping occupancy levels high. Our portfolio is fairly stabilized at a good level of 76% or so. So occupancy has remained somewhat stagnant. We were able to increase the ARR. It's more of a revenue management play based on how we see the trends and the high-demand dates. Of course, our hotels have also had a good number of large conferences, so that also helps in terms of enhancing the ARR.
Thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touch-tone telephone. The next question is from the line of Sumit Kumar from JM Financial Institutional Securities. Please go ahead.
Hi. Good afternoon, everyone. Thanks for the opportunity, and congratulations on a good set of numbers. I have three questions. First one is the room revenue grew by 18%, but same-store RevPAR was up by 14%. Is this the impact of increasing room inventory from the Mysuru hotel or anything else that we are missing?
The RevPAR grew by lower because the occupancy also came down a little bit because the Mysuru hotels, of course, have a lot lower occupancy, so that also reduces the ARR. I mean, sorry, the RevPAR. But overall, I would say it's basically the fact that occupancy came down insane in some of the hotels. For instance, in Bengaluru hotels, we were at an 81% occupancy, and that has actually come down to 78%. That is reflected in the RevPAR.
But I was looking at the room revenue number that has grown by 18%, and RevPAR was 14%. I was wondering if that because of the launch of ibis Styles last year, or is there anything else?
Yeah. It's mainly the ibis Styles also because that's the major difference because that's the only new addition from a same-store perspective.
Okay. The second question would be a follow-up to the last one by Murtuza. In Bangalore, were there any properties that stood out or you've seen strength across the market, across all your properties?
Primarily the biggest growth rate in the ARR came from our Sheraton. If I had to compare the two quarters, Q2 FY 2025 was about INR 10,500, and in Q2 FY 2026 it was INR 13,000 or so. All the other hotels, the other hotels 14%- 15% increase. But Sheraton had a 25% increase.
Sure. The last question was on this property tax impact. What was this and on which property was this incurred? Are there any more contingent liabilities here?
This was only for the Grand Mercure. Grand Mercure Bangalore seems to be a one-time expense. It was basically how the property tax was assessed. There is a difference in the way it was assessed, and hence we paid it off.
Okay. Cool. Thank you. That's all from my side, and all the best.
Thank you.
Thank you. A reminder to all the participants that if you wish to ask a question, you may press star and one on your touch-tone telephone. The next question is from the line of Raghav Malik from Jefferies. Please go ahead.
Yeah, hi. Thank you for the opportunity and congrats on a strong set of numbers. The first question was just on a follow-up on the RevPAR for October. You mentioned that it's been a bit slower due to the long weekend. Is that [inaudible] or understanding to say that maybe our RevPAR is just below even mid-teens levels for October, or is it just relatively weaker versus the expectation for 3Q?
No, it won't go lower than teens. We'll maintain a similar RevPAR. What we mean is that generally occupancies, and we've already budgeted this for the year because with the Dussehra and the Diwali coming close to each other, there are long weekends. It's anyway already budgeted for October to be slightly slower than November and December. In terms of RevPAR, we expect to keep it in the mid-teens.
Okay. Noted, ma'am. Also on some of the hotels, are there any of our hotels which have a significant MICE contribution? If so, is there a swing we can see in the F&B revenues that we have? I think it was about 25% for the first half. Is there a strong swing that we could see in the second half of the year?
The hotels with the largest amount of [inaudible] are five-star deluxe property, the Sheraton Grand, and yes, they are seeing a very healthy November and December. Exact percentages, we will be able to say only the following quarter. It is showing a good trend over the next two quarters.
Okay, sure. Noted. Just one longer-term question on these new additions that we're doing as we premiumize our hotels. With some of them, about half of them may be coming in by FY 2027-2028, a few of them which I see are luxury and upper upscale as well. Also any range of delta that we can see in terms of average ARR for our hotels? Anything that you guys have thought of in that context?
Yeah, I think once the luxury properties come within the portfolio, then at least a third of our portfolio will be in the five-star luxury deluxe category. We will have about six of the 18 hotels in the five-star luxury deluxe category. So you should see a significant uptake in the ARR. But just to clarify that these will come only towards the end of FY 2028 and some in FY 2029. So FY 2027, we are looking to add only a 45-room Courtyard by Marriott within our World Trade Center Chennai project.
Okay, sure. Noted, ma'am. Thank you.
Yeah. Thanks so much.
Thank you. A reminder to all the participants that if you wish to ask a question, you may press star and one on your touchstone telephone. The next question is from the line of Madhav from SKP. Please go ahead.
Yeah, hi. My question was in terms of ARR. I wanted to know that on a same-store basis, how confident are you that at what rate you can grow your ARR, especially for your hotels in Bangalore?
We see typically when we do feasibilities, we try to be conservative and say high- single- digits or low- double- digits for stabilized properties. But we've been able to increase it by a healthy number of around 14% for the entire portfolio. I would like to maintain that we can stick to mid-teens to high- teens for the next two quarters.
Mid-teens to high- teens. Okay. Thank you.
Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one on your touch-tone telephone. A reminder to all the participants that if you wish to ask a question, you may press star and one on your touch-tone telephone. Ladies and gentlemen, that was the last question for today. I now hand the conference to Mr. Manoj Agarwal, COO of Brigade Hotel Ventures Limited, for closing comments. Over to you, sir.
Thank you. First of all, I would like to thank you all for joining today's call. We trust this session has provided a comprehensive overview of our business performance and addressed your key queries. Our strategic focus remains clear: to grow responsibly, deliver exceptional guest experiences, and create long-term value for all our stakeholders. Before we conclude, we are proud to share that Sheraton Grand Bangalore Hotel at Brigade Gateway has won two prestigious awards this quarter from SATA for Leading City Hotel and Leading Meeting and Conference Hotel. Additionally, the hotel General Manager was honored at the ET F&B Achievers Conclave 2025 by The Times of India. Our hotels continue to uphold their commitment to community engagement and social responsibility through a range of impactful initiatives. These initiatives included school supply drives, health camps, NGO partnerships, and events for the elderly and differently abled.
We are confident in our ability to sustain the momentum built this quarter and expect continued performance in the quarters ahead. We look forward to sharing more updates and achievements as we progress. For any further queries or clarifications, please feel free to reach out to SGA, our Investor Relations Advisors, and their contact details are mentioned in the investor presentation uploaded on our website. Thank you once again for your time and participation, and we wish you all a great day.
On behalf of Brigade Hotel Ventures Limited, that concludes this conference. Thank you for joining us today, and you may now disconnect your lines.