Ladies and gentlemen, good day and welcome to the Brigade Hotel Ventures Limited Q1 FY 2026 earnings conference call. 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 then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Nirupa Shankar, managing director of the company. Thank you, and over to you, ma'am.
Good afternoon, everyone, and thank you for joining us for the first earnings call of Brigade Hotel Ventures following our IPO. I am joined by the senior management of Mr. Amar Mysore, our director, Mr. Ananda Natarajan , our CFO, Mr. Manoj Agarwal, our COO, and Mr. Rayan Aranha, our VP, Operations. We are pleased to announce that our portfolio has grown by 22% in revenue and 24% in EBITDA for Q1 of FY 2026 compared to the same quarter last year. Bangalore and Chennai performed as to expectations with a 12% and 13% year-on-year RevPAR growth respectively. The GIFT City market in Gujarat is gaining momentum and with sustained demand driven by increased development activity and the entry of high pedigree IT and finance companies. Our hotel in GIFT City delivered a 44% RevPAR growth for the quarter.
Our hotels in Mysuru continue to perform in line with market trends, maintaining healthy occupancy levels. A special mention to our newly launched ibis Styles in Mysuru, which is ramping up and managed to achieve a 68% occupancy in just its third quarter of operations. Our F&B revenue recorded good growth with a significant increase of 32% year-on-year. Looking ahead, we anticipate continued growth in this segment with plans to relaunch multiple outlets with refreshed positioning before the end of the fiscal year. Industry-wide, the quarter witnessed moderate hospitality demand impacted by seasonal softening and geopolitical tensions across borders. However, our portfolio has shown resilience and steady growth. This is primarily due to the disciplined rate management and our ability to capture event-led demand spikes during the quarter.
The hotel growth is expected to accelerate through the remainder of FY 2026, supported by sustained corporate and MICE demand and further fueled by events, festival travel, and longer pleasure stays. While international travel continues its steady recovery, our focus remains on attracting domestic travelers through value-driven customized experiences. With the successful completion of our IPO and availability of funds coupled with cash flows from operations, we are well-positioned to add nine new hotels and double our total key count over the next four to five years. As part of Brigade Group, we have always been ESG conscious across all our business verticals. Continuing this commitment at BHVL, we are proud to announce that our entire portfolio is now EDGE certified, marking a significant milestone in our journey towards sustainable and resource-efficient development.
EDGE, which stands for Excellence in Design for Greater Efficiencies, is a globally recognized green building standard developed by the IFC or International Finance Corporation. This certificate reflects our success in reducing energy and water usage by 20% or more, as well as lowering embodied carbon in our materials, demonstrating measurable impact and environmental leadership. With that, I would like to hand over to our CFO, Mr. Ananda Natarajan , for a detailed financial highlights. Thank you.
Thank you, Nirupa, and good afternoon, everyone. On behalf of the company, we would like to welcome you to the earnings call of Q1 FY 2026. Our Managing Director, Ms. Nirupa Shankar, has already shared operational highlights. I will be sharing key financial highlights for the quarter. To start with the consolidated financial performance for quarter one FY 2026, the consolidated income for quarter one FY 2026 stood at INR 125 crores against INR 102.2 crores in Q1 FY 2025, an increase of 22.3%. The consolidated EBITDA for Q1 FY 2026, EBITDA margin for the quarter one FY 2026 stood at 33.4% against 32.9% in quarter one FY 2025, an increase of 56 basis points. Consolidated PAT was INR 7.2 crores versus a loss of INR 5.8 crores for the same quarter last financial year. Consolidated PAT after minority interest stood at INR 6.2 crores as compared to a loss of INR 4.9 crores in Q1 FY 2025.
Turning to the debt position and its breakup, the consolidated gross debt of the company stood at INR 633 crores as on 30th June 2025. The cash and cash equivalent stood at INR 16 crores. Therefore, the company's net debt outstanding as on 30th June 2025 is INR 617 crores. Based on the object of the issue, we have repaid the entire institutional debt of INR 468 crores. With the continued robust cash flow from operations and availability of IPO funds, the company has strong liquidity position to meet its expansion plans. With this, I will hand it back to the moderator for questions. Thank you.
Thank you very much, sir. Thank you very much, ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. A reminder to all participants, you may press star and one to ask any questions. We have our first question from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead.
Yeah. Good afternoon, everyone. My first question is on the upcoming pipeline of hotels. You have given a plan to double our hotel pipeline over the next two years. Could you give us some idea on what is the planned CapEx, either on a per room basis or on a cumulative basis absolutely for this? How are you looking to fund this in the coming years? That is the first question. Thank you.
Yeah. Thank you, Adhidev. Basically, this will be funded through debt and internal accruals. The CapEx that is required varies from hotel to hotel. While we are not in a position to give the exact amount of overall CapEx requirement for all the nine hotels, what we can say is, on average, construction cost for brands such as Fairfield is around INR 65 lakhs a key. That is the cost of construction per key. For the higher-end hotels, like what we have already declared, like the Grand Hyatt, InterContinental, and Ritz-Carlton, on an average basis, the cost of construction per key could be around INR 1.75 crore - INR 2 crore a key. That is the data that we can give at the moment.
Sure. The second question is in terms of the demand. Considering we had some recovery in July last year, right? Post the lull in the Q1, right? That is at an industry level. Are you seeing the demand shaping up in the current quarter? If you could just give us some flavor directionally where we are on a year-on-year basis. Yeah. Thank you.
Yeah. This year is going as per plan, I would say. As you know, with the hotel industry, H1 is generally a slower half H2 part of the year. We expect that the second quarter to also go as per expectations. I mean, I am happy to say that there was good recovery in Q1 despite the geopolitical issue. In Q2, we are seeing healthy demand, as we expect to see in Q2 of every fiscal year. It will be a little lower than what we typically see in Q3 and Q4, but it is all going as per expectations.
Sure. Just to follow, any impact of any festivals or anything on the business profile part or no? If you could quantify on YoY basis if there is any. Sometimes it does tend to impact the demand on the business side, not on the leisure, of course, but that part.
Yeah. So typically, if you look at October, you have Dussehra and Diwali coming in the same month. It is likely that we will see lower occupancies for the month of October because Dussehra and Diwali come in month and there are long weekends. So typically, we do expect to see a drop during that time. But November and December should be robust months, and hopefully will make up for whatever reduction we see in October.
Sure. Fine. Thank you. I will come back in the queue if I have more questions. Yeah, all the best.
Thanks.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Raghav Malik from Jefferies. Please go ahead.
Yeah. Hi. Am I audible?
Yes, sir. We can hear you.
Okay. Sure. Thank you for the opportunity, and congrats on a good set of numbers. The first question is just on the pipeline. It appears that most of the hotels are a bit more on the premium side. Is there some significant change in RevPAR that we can kind of expect going forward or in ARRs as we add these slightly more premium hotels?
Yes, I think going forward, with the kind of portfolio we have, the kind of ARRs that we can see or that we expect to get once the hotels come up will be significantly higher than our current average ADR. As you know, the current portfolio has quite a few hotels in tier two, tier three markets, where the rates are much lower. I would say around INR 5,000- INR 5,500 for some of the hotels in tier two and tier three markets. But once the new hotels come up, they are all in the five-star luxury deluxe category, and we expect that the portfolio will see a significant increase in the ADR once the new hotels come up. And of course, RevPAR.
Okay. Understood. Just some clarity on the F&B mix for the quarter. We have seen a very strong surge in F&B versus room revenue, 32% as per your PPT. Is there any specific reason for that or is that something that we can expect similar trends going forward?
Yeah. Currently, F&B contributes about 33% of our overall top line. Of course, last quarter, we saw a healthy growth of 32% from the previous quarter. There were a couple of large-scale events that the hotel was awarded. These are all outdoor catering events. This is business that we do want to go after, because with the existing infrastructure, we can enhance the F&B revenue to very good double-digit growth. This is something we will go after. But in Q1 particularly, there were some large catering events and MICE events that we were able to get awarded for our properties.
Okay. Going forward, the room and F&B mix will be a bit more, the gap will close up a little bit probably.
See, the existing infrastructure is the same. We are trying to enhance more F&B revenue because like I said, this can be increased despite having the same infrastructure. But again, once the new set of hotels come up, when you have more five-star deluxe luxury category hotels, the F&B contribution to room contribution could be 50/50. Currently, some of our portfolios are in the smart business five-star and four-star categories. There, the F&B contribution is generally a lot lower, like 27%-30%. So on average, our portfolio today currently stands at 33% F&B contribution. But we are very cognizant that F&B is a high-growth segment, so we will continue to focus on enhancing the revenues from this segment. Definitely in our new hotels, we plan to add a lot more F&B and MICE. That is how we are designing them.
Okay, understood. That's very clear. Thank you.
Thank you.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question may press star and one on their touchtone telephone. We have our next question from the line of Abhishek Shankar from ICICI Securities. Please go ahead.
Yeah, hi. Thanks for the opportunity. Am I audible?
Yes.
Yeah. I just wanted to note that on your slide number eight, where the occupancy states that there is a 10 basis points drop, right? I just wanted to understand that your hotels are concentrated more on south of India. Am I missing something or what impacted the occupancy there?
See, in general, what we did is you will see that our rate for many of our hotels have gone up. Typically what we like to see, and I think what we need to focus on is also a RevPAR growth increase. In our case, many of our hotels saw double-digit ARR growth rates. In some cases, that is offset by lower occupancy. It is always, I would say, a give-and-take play between ADR and occupancy. I would not get too concerned with the lowering of occupancies because sometimes the hotels could have had 80% + occupancy, and now they may have come down to maybe a 75% occupancy. Overall, I would say since we have seen a growth in RevPAR, I think it is a good indication. What we can expect to see is we will continue to have this play.
There was some dip in occupancy also because some rooms might have gotten canceled because of the geopolitical issue, but we have made it up in terms of the ADR and the overall revenue. Overall, the portfolios are at a very healthy 75% occupancy, which we expect that by the end of this fiscal year, it will be much higher than this. Portfolio-wide, having a high 70% + occupancy is still very healthy.
Okay, sure. Thanks. That was from my side. Thank you so much.
Thanks.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask questions may press star and one. We have our next question from the line of Vikas Jain from Reliance Securities. Please go ahead.
Yeah, good afternoon, everyone. I just wanted to know, you mentioned that the INR 60 lakh is for the Fairfield key and INR 1.5 crore-INR 2 crore for the other part of the hotels. So what is the average breakeven period for any hotel you look at when you work out any visibility? And if you can throw some light on the average room rate going forward.
Sorry, could you repeat the second part of your question?
The average room rate going forward over the next two or three quarters or maybe next two years, what it looks like. Because with new—
Yeah.
—I mean, up in the metro cities.
Yeah. For the first part, the operational breakeven, we try to get in quarter two or quarter three itself. Operationally we expect the hotel to break even in quarter two. But overall, for the entire hotel, it's hard to say at what occupancy it will break even because it depends on the rate. Again, it typically depends on a rate-cum-occupancy game. The second part of the question on the ADR. ADR, we expect to see a double-digit growth year-on-year. Because the portfolio has been operational for quite some time, we think that it will be growth, but low double-digit growth, I would say.
Okay. So it would be maybe in the range of around 10%-15% or even more than that? ARR?
These are luxury hotels. It depends on the market. When we look at, say, a Ritz-Carlton, they are highly end deluxe exclusive category. We have to wait and see what the market will be at that point in time. But we have done our market study to understand what the expected rate should be. If you study the Hyderabad and the Chennai market, especially on ECR market in Chennai and the Hyderabad HITEC City or financial district market, you know that the hotels are doing extremely well. Currently, they are doing rates of maybe even INR 18,000-INR 20,000. So there's nothing to suggest that we cannot expect similar rates or maybe even higher, considering that our hotels will come in sometime maybe 3.5 years from now. So those are the things we have underwritten at.
But of course, it really depends on the market at that point in time. But we expect it to grow significantly is all I can say without giving an exact number at this point.
Okay. Thank you. Thanks a lot and all the best.
Thank you. A reminder to all participants, if you have a question, you may press star and one. We have our next question from the line of Raghav Malik from Jefferies. Please go ahead.
Yeah. Hi. Thanks aga in. So just a specific question on ibis Styles, which was opened more recently. How is that property tracking currently? And yeah, I also have a follow-up on ibis that I'll come back after your answer.
We are quite happy with the way it has performed because it is still in the first year of operations. It literally opened in October of last year. Already we are seeing an occupancy of close to 70%. It is currently 68%, but that is a very healthy occupancy percentage for a hotel that has just been open hardly for two to three quarters. Rates, the Mysuru average rates is around INR 4,500. The hotel is tracking around there.
Understood. Also, is there any plan to, some of the newer hotels that we add, will any of them be from, like, with partnership of with the ibis portfolio, given that they recently announced that they will be significantly adding hotels in the next couple of years. Is there a potential opportunity to expand the partnership there with this brand?
Currently, as you know, we have the nine hotels planned, and none of them are with the ibis portfolio. I am sure all the hotel chains are growing quite rapidly. We already have a strong partnership with Accor, Marriott, IHG, and of course now Hyatt as well. As of now, we are not signing any new hotels with ibis Styles.
Okay.
Going to be—
And just one last—
Yeah.
Sorry.
Yeah, go ahead. I said most of our hotels are going to be in the upscale category in the four, five, and five-star deluxe category. I would put ibis in a more mid-market, I would say.
Okay, understood. So we'll be going more on the premium side. Got it. And just one more question, if I may. So recently there's a lot of job cuts that we're seeing in the IT sector, and we do have some weightage of hotels in Bangalore and Hyderabad particularly. So is there any impact that we're seeing of that on maybe RevPAR or ARR in the last month or two? How would that be tracking and particularly maybe the impact on MICE as well?
See, the hotels have been doing very well even in all the major business markets. We understand that Bangalore used to be very dependent on just the IT services industry. But now with the advent of the number of GCCs, Bangalore is the city in India with the highest number of GCCs entering the market. Apart from that, co-working brands, a lot of office requirement is being taken up by co-working brands and India-facing brands and India-led companies. So the dependency, I would say on IT and IT services, be it in the office market, and then in the hotel market, is reducing. There are more industries coming up, like the financial services, like pharma, like biotech, a lot of deep tech companies.
I would say overall dependency on IT and IT services has reduced, and seen any softening of demand in our properties, be it in Bangalore or Chennai. Sorry. Go on.
Yeah. Hi, this is Manoj here. Just to add on to this point. Right now our portfolio is very well diversified in terms of the segmentation and in terms of geographical also. Although we are only in the southern cities. But in southern cities also, it is very diversified between leisure and business and the tier one and tier two cities. And with very conscious effort, our segmentation is also very well diversified, meaning our corporate segmentation, I mean, the business from corporate segment is we have kept it at around one-third, and the rest of it is a mix of retail and the groups and crew. I would say, our dependency on corporate business per se is not that much. And having said that, during the quarter, we have not seen any softening of corporate demand as well. That has remained at a very healthy level.
Okay. Understood. Thank you so much.
Thank you. A reminder to all participants, if you wish to ask any question, you may press star and one. Anyone wishes to ask a question may press star and one on their touch-tone telephone. We have our next question from line of Abhishek Khanna from Kotak Securities. Please go ahead.
Hi. Ma'am, I just wanted to understand, is there a strategic shift in the thinking where you're moving from being a mid-tier-focused hospitality company to a more premium/luxury-focused company because you are adding a lot more products, The Ritz-Carlton, JW, Marriott, et cetera, which we have in our pipeline. This seems to be a strategic shift, but is that by choice or by the location of your land parcel/assets where you are building that? Second, if yes, what is the rationale behind that shift?
Yeah. See, frankly, it is an effort that we have thought about, and what I can say is that typically we are opportunistic about the hotels that we are developing. If the micro market where we are looking to build makes sense for a five-star luxury deluxe, then we go ahead and do that. I am just going to give you the example of, say, the Grand Hyatt Chennai in ECR. I would say pre-COVID, it was not a very strong leisure market. I mean, the average ADR was around INR 8,000 or INR 9,000 or so. Post-COVID market dynamics have changed, and the market dynamics have sustained. Many people thought post-COVID leisure would do well only for a short period of time, but it sustained. And now the rates in that micro-market are extremely healthy.
They are in the high as I mentioned earlier, some much higher, but I am just giving a conservative number. Then we believe that property can take a Grand Hyatt. Now, for instance, near the airport where we have and in the other micro-market in Brigade Valencia, where we are doing another Fairfield. Those micro-markets cannot take five-star luxury deluxe properties, or rather, we have, especially in Electronic City and Bommasandra, that market, we believe, is best suited for a brand like Fairfield, which is like a four-star hotel that we would be developing. Near the airport, we found that there were a lot of five-stars already, and we wanted to do a very MICE-driven four-star hotel, like Marriott. For us, we take our decision based on every micro-market.
And we do believe that having larger hotels with more F&B, when you do large five-star deluxe hotels, you can add more F&B, you can add more MICE, and that supports the overall hotel as well. So it is very micro-market dependent, I would say. And we take a call based on each micro-market and wherever we get the land. So I would say the positioning, the brand, everything is decided based on the location of the hotel and what that micro-market demands.
Sure. For the future land acquisitions that you would look to make, or you would be considering, would you be focusing on city centers, tier one cities, that is? I understand it depends on the location, but at least in terms of the direction, would you be focusing more on locations which are CBD or the ones that can support such five-star properties, or you'd be open to either, whether it's a mid-scale centric location or it's a luxury-specific location?
We are currently evaluating multiple opportunities. We are looking at some potential leisure markets. We are also open to looking at other locations in tier one cities. We're not currently looking at too many tier two markets, I would say, unless it's a major leisure destination. I would say the primary focus would be on strong leisure or leisure where you have strong leisure and business markets, or it would be your tier one cities. As of now, we're not looking too much at the tier two business cities.
Sure. Just lastly, just a related one to this. While we understand your luxury/premium hotels would do incrementally better in terms of the absolute earnings as well as maybe the EBITDA margins that they could deliver. On the return wise metric, maybe the return on capital that you're putting in, is there a conclusive reasoning to say that maybe a luxury property does better versus a mid-tier property, or it just depends on how well you're able to perform in either of these hotels?
See, it depends on so many things. The land cost, the CapEx that you put in. I would say between the land cost and the CapEx itself would account for significant of the upfront investment. Then it really based on the CapEx and land. We also take a call on the brand depending on the cost of land, et cetera. For instance, you wouldn't put a budget hotel on land that is very expensive. Whether we do a four-star, five-star, five-star luxury deluxe, I think the metrics and the return expectations would be similar.
All right. Sure. That makes sense. What those return expectations are, maybe second, third year, whatever way you track it internally, is there a return on capital employment metric that you track for maybe the mature asset? Is there a number that you could share?
Yeah. Typically, we do our IRR thresholds, and we also do the payback period, et cetera. Generally, by the third year, we expect that the hotel should at least start repaying its debt, should be able to stand on its own two feet. We have heightened return expectations from all asset classes, annuity income asset classes, I would say. It is no different for hospitality.
All right. Sure. Thanks a lot.
Thank you. A reminder to all participants, you may press star and one to ask a question. Anyone who wishes to ask a question may press star and one. As there are no further questions, I now hand the conference over to Mr. Manoj Agarwal, COO, for closing comments.
Yeah. Thank you. Thank you all very much for joining us in this first earnings call post our listing and listening to us about our performance and the growth plans. It has been a great quarter for us, as not only we have delivered a strong operational performance, but after our successful IPO closing, we have a strong balance sheet and capital structure to prudently execute our growth strategy. We continue to believe that long-term value in hospitality is created by owning the right assets in the right location and at the right build cost. With a robust development pipeline in place and supportive industry tailwinds to aid the performance growth, we are very well-positioned to build on this momentum and create sustained value for all our stakeholders. Thank you all. Thank you very much, and thanks for attending the call.
Thank you, sir. On behalf of Brigade Hotel Ventures Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.