“Given that H1 is typically the weaker half of the hospitality business, we expect margins to grow pretty rapidly once occupancies for these new rooms stabilise,” said Sanjay Sethi, managing director (MD) and chief executive officer (CEO), Chalet Hotels.
He added, “Overall, on the hospitality side, I am extremely positive (on growth) for the next three-four years.”
This comes after the company’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin in the hospitality segment decreased by 139 basis points (bps) in the July-September quarter on a year-on-year (Y-o-Y) basis.
In H1 FY26, the company added 129 rooms in Bengaluru Marriott Hotel Whitefield and 37 rooms in The Dukes Retreat in Khandala, which has now been rebranded to ATHIVA Resort and Spa from October 16.
Additionally, this increase in number of rooms impacted its occupancies, which is expected to stabilise in H2 FY26, an investor presentation stated.
Sethi added that not just in terms of occupancy, but he expects the company’s room rates to see an upside in H2 FY26.
Meanwhile, on Tuesday, it reported a consolidated net profit of ₹154.84 crore, attributable to the owners of the company, for the July–September quarter, compared with a loss of ₹138.49 crore during the same period last year, driven by higher revenue.
Its overall Y-o-Y Ebitda rose by 25 per cent to ₹200 crore in the July–September quarter.
K Raheja Corporation’s Chalet Hotels Ebitda margins expanded by 1.4 percentage points to 43.4 per cent in Q2 FY26, said the earnings report.
After the festival period, growth in occupancy and revenue per available room (RevPAR) are expected to be driven by better revival of business travel, meetings, incentives, conferences and exhibitions (MICE) and the wedding season.
The hospitality division of Chalet Hotels generated revenue of ₹380.2 crore, up by 13 per cent in Q2 FY26. In all, the company has around 1,200 rooms in its pipeline, with 11 operational hotels, offering a total of 3,359 keys.
With demand still outpacing supply in the country’s hospitality industry, Sethi said, “We are looking at more opportunities in Bengaluru, Hyderabad, Chennai, Kolkata, and maybe more (expansion) in Delhi. We believe Hyderabad and Pune are two very strong markets (due to the prominent office development space).”
So far, Mumbai contributes 54 per cent of revenue in the hospitality segment for the quarter ended on September 30, according to its presentation.
The company also announced its first interim dividend of ₹1 per equity share, with a face value of ₹10 each on Tuesday.
Sethi said this decision was taken to help the company expand its shareholder base.
“We are a growing company, so all of the capital is used for growth. And, we don’t want to continue to increase the debt too much. At the same time, we think it’s time to also start rewarding shareholders with some dividend. This allows us to expand our shareholder base,” he added.
 "Sanjay Sethi, managing director and chief executive officer, Chalet Hotels")