Samhi Hotels Limited — Investor Meet, 05-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. Financial Performance: SAMHI Hotels has reported asset income of ₹296 crores for Q3 FY25, reflecting a 10% year-on-year increase, attributed to a strong RevPAR growth of 15% in same-store assets. Asset EBITDA improved by 13% to ₹121 crores, with a margin of 41.2%, while consolidated EBITDA rose by 25% to ₹113 crores, reaching a margin of 37.9%. Notably, reported PAT stood at ₹43 crores; adjusting for a non-cash finance cost write-off, this would be around ₹30 crores.

2. Future Outlook and Growth Drivers: Management is optimistic about continued revenue growth driven by expansion in key markets like Bangalore and Hyderabad, where strong office space growth and increased travel are anticipated to support RevPAR. They also highlighted initiatives to double their upscale and upper-upscale hotel inventory by approximately 1,000 rooms through acquisitions and expansions in existing properties.

3. Order Book and Operational Updates: The company is actively working on expanding its inventory through adding new rooms in existing hotels. Upcoming projects include a 54-room addition in Sheraton Hyderabad and 22 rooms at Hyatt Regency Pune, which are set for completion in FY26. Additionally, the rebranding of existing properties into higher-quality brands is expected to contribute positively to future revenues.

4. Analyst Q&A Insights (Detailed):

- **Revenue and Profitability**: Analysts inquired about expected RevPAR growth across segments. Management anticipates all segments will continue to perform well, with substantial growth expected from hotels in newly developed markets.

- **Market Position and Competitive Landscape**: Management acknowledged the mature competitive landscape while expressing confidence in their market position due to their strategic growth pipeline.

- **Operational Challenges or Risks**: Concerns regarding higher-than-anticipated occupancy and ARR requirements were discussed, with management affirming their project timelines and confidence in meeting demand.

- **Capex and Capital Allocation**: Ongoing capex plans include ₹200 crores for FY26 and ₹150 crores for FY27, focusing on new room additions and existing property renovations, while maintaining a commitment to strong cash generation.

- **Strategic Priorities and Long-Term Vision**: Management reiterated their commitment to strengthening their portfolio through strategic asset recycling, focusing on higher margin businesses and exploring new revenue sources beyond IT/ITeS sectors.

5. Market or Regulatory Updates: The management mentioned low new hotel supply across key cities as a favorable sign for RevPAR growth. There are indications that they will navigate through growth CAPEX efficiently while managing debt levels.

6. Strategic Focus Areas: The emphasis on expanding into upper-upscale segments indicates a strategic pivot towards premium offerings, with cost control measures in place for existing assets. Overall, the communication reflects a balanced approach to growth and operational efficiency.

7. Investor Insight: Given the strong financial performance, growth prospects driven by key property expansions, and management's optimistic outlook, the current situation appears aligned with a 'buy' position for SAMHI Hotels, emphasizing the potential for revenue growth and improved margins in the upscale segments.