Samhi Hotels Limited — Investor Meet, 19-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** SAMHI Hotels reported asset income of Rs. 266 crore, representing a 20% year-over-year increase, attributed to strong same-store performance and the addition of the ACIC Portfolio. The asset EBITDA rose 28% to Rs. 104 crore with margins at 39.11%. Consolidated EBITDA reached Rs. 97 crore, up by 80%, leading to a reported PAT of Rs. 12.6 crore. The second quarter showed a strong performance with same-store revenue growth of 13.3% and RevPAR growth of 16.5% YoY, steering momentum into the seasonally stronger second half of FY25.

2. **Future Outlook and Growth Drivers:** Management expressed optimism about the potential for additional revenue and EBITDA growth, primarily driven by ongoing development of three upscale hotels in Bangalore and Hyderabad, expected to add a total of 525 rooms. Increased demand from office space absorption and robust air passenger growth in these markets provided confidence for continued expansion.

3. **Order Book and Operational Updates:** SAMHI secured a long-term variable lease for a new 170-room hotel in HITEC City, Hyderabad. Additionally, the company is in the process of converting a 142-room hotel in Bangalore alongside plans for a 200-220 room expansion adjacent to the existing property, set to launch over the next few years.

4. **Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Analysts sought clarity on revenue projections and the impact of market trends; management indicated strong performance from upscale properties despite slight occupancy fluctuations.

- **Market Position and Competitive Landscape:** Questions regarding competitive threats highlighted SAMHI's strategic positioning and ability to leverage market conditions, especially in Hyderabad, where supply is minimal.

- **Operational Challenges or Risks:** Short-term impacts of construction on revenue were acknowledged, yet the management remained confident in mitigating these through focused execution.

- **Capex and Capital Allocation:** Proposed capital expenditures between Bangalore and Hyderabad were noted at approximately Rs. 270 crore for Bangalore and Rs. 180-190 crore for Hyderabad.

- **Strategic Priorities and Long-Term Vision:** Emphasis on shifting to an asset-light model with variable leases was noted as a key growth strategy.

5. **Market or Regulatory Updates:** No major regulatory updates were discussed; however, the firm emphasized evolving market conditions favoring growth in upper-upscale segments.

6. **Strategic Focus Areas:** The management's commitment to internal growth, renovation, and repositioning of existing assets signaled a targeted focus on enhancing portfolio quality while expanding the upscale market share.

7. **Investor Insight:** Solid financial results and a robust growth pipeline, coupled with a well-articulated strategy for capital allocation, position SAMHI favorably for both steady performance and market capitalization growth, supporting a favorable view for potential investors.