Ladies and gentlemen, good day and welcome to Brigade Hotel Ventures Limited Q2 FY 2027 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 touch-tone 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.
Thank you. Good afternoon, everyone, and a very warm welcome to the Brigade Hotel Ventures Limited Q2 FY 2027 earnings conference call. I am joined today by members of our senior leadership team. First of all, our Chairman, Mr. Jaishankar, Mr. Vineet Verma, our Director, Mr. Vinay Gupta, our CEO, Mr. Ananda Natarajan, our CFO, Mr. Rayan Aranha, our Vice President, Nikhil Jaju, Senior Business Analyst, and now we are also joined by Amar Mysore, our Director. I will now dive deeper into this quarter's performance compared to Q2 of FY 2026. Our growth for this quarter is rate led. ADR for the portfolio grew by 11% from INR 7,100 to approximately INR 7,900. This is something we actively worked towards in the portfolio over the last three quarters to increase the ADR, and I am very happy that we achieved it.
We are now working to increase the ADR of each of our individual hotels to above INR 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-on-Y increase of just 1%. Our room revenue, F&B revenue and total revenue increased by 10% for the quarter compared to Q2 of FY 2026. What we are very happy about is that EBITDA increased by 26% from INR 130 crores- INR 142 crores for the half year, thereby increasing our margins from 32% - 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 INR 11 crores- INR 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 Bengaluru in September contributed to both rooms and F&B, and F&B returned to double-digit growth for the quarter. Moving to market-wide performance. Bengaluru developed a strong quarter with ARR growing 8% Y-on-Y to INR 9,400 ADR and an occupancy improving to 81% from 78% last year, resulting in 12% RevPAR growth to INR 7,600.
Unlike the first quarter, when we chose to optimize for occupancy in a softer demand environment, this quarter, we were able to grow both rate and occupancy, a reflection of the recovery in the corporate and MICE demand in the city. Across our other markets, ARR grew by 13% Y-on-Y to INR 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 Mysuru. In Mysuru at Grand Mercure, we were able to improve our ARR by 27% Y-on-Y, improving its positioning in the market. The ibis Styles Mysuru 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 2027 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 2027. 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 2031, anchored by brands like Grand Hyatt, InterContinental, and JW Marriott, and The Ritz-Carlton across markets of Chennai, Hyderabad, Kochi, and Bengaluru. This will lift our luxury and upper upscale mix from 14% today to 31% by FY 2029 and 38% by FY 2031.
Of our INR 3,600 crore planned CapEx for this expansion, INR 484 crore have 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. Ananda Natarajan, to take you through the financial highlights in detail.
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 2027 stood at INR 142 crores, up by 10% year-on-year. Room revenue grew 10% to INR 87 crores, and F&B revenue grew 10% to INR 46 crores. Consolidated EBITDA for the quarter came in at INR 52 crores compared to INR 41 crores in Q2 FY 2026, 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 INR 9.7 crores from INR 13.5 crores in Q2 FY 2026, following the debt repayment from our IPO proceeds. Profit after tax stood at INR 22 crores compared to INR 11 crores in Q2 FY 2026, growing 105% YoY.
On the operating side, ARR for the quarter stood at INR 7,876, up by 11% year-on-year, with occupancy at 75.2%. This translated into RevPAR of INR 5,922, a growth of 10% year-on-year. For H1 FY 2027, total income stood at INR 273 crores, up by 7% YoY. EBITDA grew 18% to INR 98 crores, with a margin of 35.8%, and GST 2.0 had an impact of 1.6% on EBITDA for the half. PAT stood at INR 39 crores compared to INR 18 crores in H1 FY 2026, growing 122% YoY. Sorry. ARR for H1 FY 2027 stood at INR 7,559, up 9%, with occupancy at 75.4%, translating into RevPAR of INR 5,702, up by 9% YoY. As on 30th September 2026, our net cash position stood at INR 29 crores.
On debt and de-leveraging post-IPO, we deployed INR 468.1 crores of the proceeds towards debt repayment. The benefits are already visible, with finance cost declining by over 28% to INR 9.7 crores in Q2 FY 2027, compared with INR 13.5 crores in Q2 FY 2026. We have also further optimized our cost of debt by refinancing our loan from an unsecured facility at 10.25% to a secured facility at 8.1%. Of the approximately INR 3,600 crore CapEx plan for our upcoming projects, INR 484 crores has been deployed, of which INR 84 crores was incurred during H1 FY 2027. We expect to deploy a further INR 400 crores- INR 450 crores in H2 FY 2027, including capital earmarked for an unidentified acquisition.
With this, I conclude the financial highlights for the quarter. We will now be happy to take your 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 the 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 Karan Kamdar from Choice Institutional Equities. Please go ahead.
Hello. I hope I am audible.
Yes.
Yeah. Congrats on a great set of numbers. My first question is on the differential in occupancy drops between Bengaluru and non-Bengaluru. What happened there? Can you throw some more color on will this normalize and will both reach some equilibrium, or what is our strategy there?
Thank you for your question. This is Vinay responding to you. Bengaluru, we have all mature stable assets which are delivering optimized occupancies. However, in other cities, ibis Styles Mysuru is two-year-old hotel where we are price positioning, and it is expected to reach its stabilized occupancy next year. In Kochi, we rebranded our hotel only four months ago from Four Points to Courtyard, where we took the rate positioning by 17% rate increase. Again, as a result, we displaced lot of low-paying accounts, which will stabilize over coming two-three quarters, leading to the full potential of the occupancy. Similarly, in GIFT City, the market is showing greater strength and growing rapidly towards the higher 70s occupancy. Putting them all together, we would be leading to higher occupancy in other states similar to Bengaluru in coming few quarters to 12 months.
Okay. Great. Sir, we saw a couple of announcements from Brigade Enterprises regarding two hotels, both of them in Bengaluru. We read in the news that Brigade has signed a contract with Grand Hyatt for management. Any strategy or plan for Brigade Hotels in participating in these assets?
Yes, we made two hotel announcements yesterday, both with Hyatt Regency brand, not Grand Hyatt. Both are with SPVs in Bengaluru for Brigade. We made one with Brigade Estates and Projects Private Limited, which is 100% owned subsidiary of Brigade Enterprises. This is a larger mixed-use development of 25 acres, and it will have about a 350-room hotel there, a Hyatt Regency hotel. Being KIADB land, it is not something that BHVL can buy at the moment, but maybe at a later date, once maybe the warm shell or something has been built by BEPL, at a later stage, BHVL will get involved. With regards to the other, which is being built in another SPV called Ananthay Properties Private Limited, there we are creating a 250-key hotel that is a much larger township of around 40 acres, where 7.6 million sq ft is being built.
Out of the 7.6 million, 6.3 million is residential. We will have 4,000+ homes there. And 1.3 million of commercial development, which will include retail of 2.5 lakh, office of 4.2 lakh, hospital of 3 lakh, and the hotel also 3 lakh sq ft. We are creating hotel in this SPV, and it will be developed by the SPV, and maybe at a later date, BHVL could look at getting the hotels into their portfolio. I think this is a key strategic call that we have taken as Brigade Enterprises and BHVL. Brigade Enterprises will be developing a lot of mixed-use townships. We are doing this in multiple cases. Everything need not come under BHVL at this particular moment because BHVL also has a considerable pipeline to be built, and we have the funding for the current pipeline.
At a later stage, when the current development pipeline is completed, when we have lot of spare future cash flows, we do plan to bring all these hotels under the BHVL pipeline. We have also done this previously. We mentioned in our Brigade Vibrancy SPV where we have tied up with Bain Capital, which will have 2 million sq ft of office and also a hotel there, 250-key hotel. The strategy is that we will be building a lot of mixed-use townships under Brigade Enterprises. It will have hotels. At a future date, these hotels will come under BHVL.
Okay. That is great to hear and very heartening. Any timeline you could give on the construction? I do not want a timeline on when BHVL would get these assets because that could be uncertain. But what construction timeline, if you could provide for both of these assets, or rather three assets?
We are looking to start construction for these two hotels within the next two-three quarters.
Got it. Yeah. Please go on. Sorry. Yeah, please.
It is under design development, and once we get the approvals, we will start construction for it.
Got it. Thank you. One last question on some accounting entries. Other non-current financial assets has jumped from INR 16 crores odd to INR 61 crores in the first half. Can you help me with the breakup and where have we spent that money?
Yeah. This is Anand here. You are asking about other?
Non-current financial assets, INR 615 million.
It is mainly FD.
It is mainly FD.
Mainly FD.
This is deposits. Should I consider them like deposit for electricity or something like that?
Yes. No, this is surplus cash parked in long-term deposit.
Should I consider INR 177+ crores INR 62 crores as total FDs for Brigade Hotel ?
Correct.
Okay. Got it. Thank you so much. I will get back in the queue.
Thank you. A reminder to all participants, you can press star and one to ask questions. The next question is from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead.
Yeah. Good afternoon, everyone. Thank you for the opportunity. The first question is related to the second half of the year. What is any sort of guidance on the RevPAR growth would you like to share? Any range?
Yeah. See, currently for the first half of the year or this quarter, it has been about 9% for the RevPAR. For the second half of the quarter, we are expecting it to grow from this. We have tried to maintain a double-digit growth, mid-teens when it comes to EBITDA, and it comes to the overall revenue growth. So RevPAR should be in line with this. This quarter, we did about 10%, and for half year it was 9%, but we expect the second half of the year to be better. I cannot get into the specific number, but our intention is that it will grow in mid-teens range.
Okay. Mid-teens range. Okay. Second question is on the CapEx. If you could help us understand where the CapEx, which assets were spent in the H1, and for balance year and next year, what is the total CapEx you are looking to spend now? I think it was INR 1,100 crores, INR 1,200 crores, right? Over 2027, 2028. Just wanted an update whether the number has any change to that number or is it same?
See, as we mentioned, we have already spent INR 484 crores. In this year, we had allocated to spend about INR 450 crores. Now, half year, we have spent only INR 84 crores of that. I think we can expect a similar number, but it may be slightly reduced because of maybe slight, I would say, delay in where we currently are at. I would say the pace will pick up in the second half of the year. We have still maintained that maybe instead of INR 450 crores, we might spend INR 400 crores odd for the coming year. In 2028 is when we expect the construction to significantly pick up. Then we have allocated a larger amount. Currently, it has been allocated as INR 700 crores for FY 2028.
Okay. Any hotel openings for next year, which are scheduled, you think in second half of 2028 or which is possible or it will all be 2029 and beyond?
For this year, like I mentioned, it is the Courtyard, the 45-key Courtyard in FY 2027. Next year we--
It comes in March.
For next year, we have allocated the two Fairfield, which is Fairfield by Marriott in Whitefield and Fairfield by Marriott in Brigade Valencia. Both are in two different micro markets of Bengaluru.
Yeah. So just so the hotels, the structure will be ready by this year for both of those? Or it means it will get open[crosstalk].
It is getting ready. Once the civil work is done, we will need about period of fit out. Some of the work can also happen in parallel.
Okay. Just to understand correctly, the second half of 2028 is when these hotels would open, right? That is the target.
Yeah. It is towards the end. Yeah, it is back-ended.
Okay. Fine. Okay. Thank you. I will come back in the queue with more questions if I have. Thank you.
Thank you. A reminder to all participants, you can press star and one to ask questions. The next question is from the line of Parth from IDBI Capital. Please go ahead.
Hi. Congratulations on a good set of numbers. My question was on the food and beverage revival in Q2. I think they are still down for around 3% in H1. How do we see it moving up from here? How sustainable is our MICE recovery as such? Hello?
Yes. This is Vinay. Our Q1 had a decline in F&B. However, Q2 had a growth of 10%. Overall, numbers that you are seeing for the H1 has two different quarters and two different trend lines. We are back to normal growth. In Q2, we have grown 10% in F&B and 10% in rooms, leading to overall growth of double digits in income.
Yeah. We already mentioned in Q1 that we did have an impact of nearly INR 14 crores due to the West Asia crisis that impacted almost 10% of the top line. There were a lot of cancellations in Q1. However, Q2, we have seen, as Vinay mentioned, the bounce back of the F&B business and the MICE business. Q3 and Q4, we are expecting this to only improve upon. Q3, there will be a lot of good wedding dates. Q4 as well, there are a lot of large conferences. The hotels are quite showing very buoyant business for Q3 as of now, with a lot of large city-wide conferences already that have sold out the hotels. We are expecting a good Q3 from an F&B perspective.
Got it. Also, another question on our peak net debt to EBITDA. I am assuming that we will reach our peak debt in FY 2029 or FY 2028 maybe. What will be the net debt to EBITDA figure that we see in those years?
Net debt to EBITDA in 2028-2029, it will be slightly less than 4x.
Around 3.5x is safe to assume?
Yes. Slightly 3.5x. 3x and up to 4x.
Yeah. But I think I want to add that our DSCR will always be around 2x to 2.5x, so that in terms of servicing the debt, it will not be a problem.
Okay. Understood. Thank you.
Thank you. The next question is from the line of Heer Gogri from Choice Institutional Equities. Please go ahead.
Hello. Thank you for the opportunity. Congratulations on a great set of numbers. I wanted to know how has October performed so far in terms of ARR occupancy compared with the previous year?
October has been quite good. We have had some holidays with the Dussehra break, et cetera, but overall, it is trending quite well. What we are more excited about, after Diwali. Again, Diwali, there are quite a few holidays in the first week of November. We believe that from the second week of November onwards is when we will really see a very vibrant business, I guess, in all the hotels. I think October is still good. I would say the main business will come in after the first week of November.
Okay, got it. Any update on the acquisition that we had planned? We kept some unidentified IPO proceeds for the acquisition, and I think, Nirupa, you mentioned in your interview as well today that you might be looking at some opportunities outside of South India as well. Any update on that front?
We are actively looking at multiple opportunities. We have looked at quite a few. I think the hotel industry, since it is also doing well, it is hard to get something with the right value and an asset that will give us the right kind of returns. We are still actively looking. Yet to finalize on this unidentified opportunity, but hopefully we can do that. This is also top priority for us maybe in the next two, three quarters. This is something that is of top priority to us. Of course, because we are doing a lot of development in the markets where we already operate, we are looking to buy something or look at an opportunity in markets where we do not already exist. This can be in prime business markets, or it can be in very strong leisure markets as well.
Okay. The acquisition you say can be looked for the year FY 2027 itself.
Trying to, but I think with documentation, due diligence, it might roll into another quarter or so.
Okay. Got it. And one last question. I think you guided mid-teen growth for FY 2027, revenue growth. So wanted to know what is the guidance right now.
Sorry, the question was a bit. Yeah.
Yes. I think we guided a mid-teen growth for FY 2027, revenue growth. So wanted to know what is the guidance now and the EBITDA guidance for the year 2027 and 2028.
Yeah. It is similar. I do not want to change the guidance at this point in time, but I am happy about the EBITDA increase for Q2, which is very encouraging. We will try to maintain that because it is a like-to-like growth. Even the Courtyard by Marriott, which we are adding, it will come into the market mostly in Q3, end of Q3 or early Q4, and it is only 45 keys, and it will be in a ramp-up stage. I want to maintain that guidance for now, and obviously we will try to enhance the EBITDA wherever possible.
Okay. Got it. Thank you so much, and all the best.
Thank you.
Thank you. A reminder to all participants, you can press star and one to ask questions. The next question is from the line of Archana Gude from IDBI Capital. Please go ahead.
Hi. Thank you for the opportunity. Most of my questions are answered. Just two follow-ups. First on RevPAR. Could you compare RevPAR with the competitive players, same frame of the numbers?[audio distortion].
It's not very clear.
Am I not audible, Nirupa?
It's not very clear. It was a bit muffled. Do you mind repeating the question, please?
Sure. Is it better now?
Yeah.
Nirupa, my first question was on RevPAR. I do understand 10% looks good, but when it comes to that with one of the peers, the number looks slightly muted. How should we look at this number? Where exactly the occupancy, where it could really deliver? That is my first question. Secondly, you spoke about October being pretty positive. Any guidance on early bookings on wedding season or any uptick in FTA for any of the properties, which can help us to achieve more than what we guided mid-year numbers for H2?
Sorry. I will do my best to answer it. We could not hear it fully, but I will do my best to answer. You said that the RevPAR is slightly muted. Yes, like I said, we have grown at 10% compared to last year, and even for the quarter it has grown at 9%. For the half year, it has grown by 9%. Sometimes it is just, I think, like Vinay mentioned earlier, there is one or two hotels that have brought the occupancy down. For instance, the Four Points, which got branded to a Courtyard. We were trending at mid-80s occupancy. In the first half of the year, because of the rebranding, it fell to 40%. In the second quarter, it has gone up to 66%. You know that 20%-40% drag of one hotel has brought the overall average of the portfolio down a bit.
But we are seeing a very healthy trend with the ARR increasing because we are changing the entire positioning of the hotel. Once these one or two laggards come back up, you will see the RevPAR increase to that mid-teens range, which I am hoping that it will happen in the next couple of quarters. Because like I said, with the change in brand from 80%, it dropped to 40%, then it picked up to 66%, and then hopefully in the next two quarters, I expect it to go back to the 80s. Then you will see the average of the occupancy increase, because currently the occupancy is flat at 70%. Rate also, most of our hotels have shown a very healthy rate increase.
One or two cases, it has decreased, but overall, I would say there is a decent rate increase. One of the key hotels in our portfolio is the Sheraton Grand, and they showed a decent occupancy increase, but the rate increase is very marginal. That brings down the average. Otherwise, some of the smaller hotels have shown very healthy 20% increase or 30% increase. I think in the second half, you will see some better RevPAR numbers.
Right. On the second question, Nirupa?
[audio distortion] You were asking wedding season, you asked this.
Yeah.
I think overall, the number of good dates for wedding dates are much more than last year, so that should also help our business. A lot of large businesses are slated to happen in Q4 of this year. Hopefully, again, that should really improve the overall business for our hotels.
Sure.
We are seeing strong uptick in conferencing activities in Q3, and that typically continues for Q4, like Nirupa said. Next two quarters, as you know, H2 in hotel industry is always stronger than H1.
Right. Sure. Nirupa, you said that maybe in H2, there could be some positive surprise on, let's say, the improved occupancy. Given that we have this wedding calendar and everything, can we positively surprise the street on this mid-teen guidance we are giving? Any thought on that?
I don't want to spoil the surprise right now. Right now I want to maintain the guidance. If we do manage to do better, I will let it remain as a positive surprise. Right now, see, because the first quarter impacted our top line. We were down by 10%. We have to make up that 10% as well. I would like to just maintain the guidance we have kept.
Sure, Nirupa. Thank you so much. Have a nice day.
Thank you. A reminder to all participants, you can press star and one to ask questions. I now hand the conference over to the management for closing remarks.
I would like to thank everyone for joining and all the encouragement you have given us to Brigade Hotel Ventures. To sum up, this has been a great quarter for us from a rate perspective. Recovery in MICE was also witnessed with events like Electronica, Space Expo. That showed in our results. Before we close, a brief mention of recognition our hotels received during this quarter. Sheraton Grand Bangalore, once again, was recognized as best five-star hotel by Karnataka Tourism Awards in 2026. Six of our F&B outlets across our portfolio of hotels also earned prestigious accolades highlighting the strength of best-in-class quality of our dining offerings. One of our general managers of Holiday Inn Chennai was also recognized for being a best general manager by BW Hotelier.
With that, concludes my remarks today, and I would like to thank all our shareholders, analysts, investors for their continued trust and support.