Elara Capital upgrades Chalet Hotels to 'Buy'; stock rises over 3%

Chalet Hotels share price today: Chalet Hotels share price rose 3.6 per cent to ₹920.5 in Thursday's session on the National Stock Exchange (NSE) after Elara Capital upgraded the stock to 'Buy' from 'Accumulate'. The brokerage, however, maintained the target price of ₹1,086 apiece, which implies an upside potential of 24.74 per cent from Wednesday’s closing price. 

 

Chalet Hotels is one of the preferred picks of Elara Capital in the hotel and hospitality space.  By close, Chalet Hotels share price stood at ₹896 per share, up 2.9 per cent, as against a 0.06 per cent rise in the benchmark Nifty50 index.  

 

 

Chalet Hotels Q3 results preview:

  Elara Capital expects Chalet Hotels to report ₹109.5 crore as adjusted net profit for the third quarter of the current fiscal year (Q3FY26), up 13.5 per cent year-on-year (Y-o-Y), from ₹96.5 crore seen in Q3FY25.  Revenue, it said, may increase to ₹553.5 crore from ₹457.8 crore, while earnings before interest, tax, depreciation, and amortisation (Ebitda) may rise by nearly 19 per cent to ₹243 crore.  

Elara Capital estimates that the total adjusted net profit of Chalet Hotels for the entire financial year 2026 will likely be at ₹356.3 crore. 

 

The brokerage has a structurally bullish view on the luxurious hotel operator because of the visibility of a consistent room addition until financial year 2030 with healthy cash generation.

 

The revenue per available room will be driven by the key occupancy rate through a ramp-up in 129 additional rooms at Marriott Bengaluru, 147 rooms at Athiva Resort at Khandala and 141 rooms at Westin at Rishikesh in the financial year 2026, Elara Capital said. 

Overall, factors restricting travel impacted hotel occupancies in Q3 even though organic travel demand continue d to be elevated.  "Strong RevPAR momentum in October and November, driven by business travel, weddings and MICE activity, led to upbeat sentiment but large -scale flight cancellations by IndiGo in December impacted hotel occupancies and ARR growth momentum as travelers became cautious. Thus, despite an initial expectation of a strong Q3, we expect actual performance to be merely decent," Elara Capital said. 

  Meanwhile, in the second quarter (Q2FY26), Chalet Hotels reported its financial performance in line with Elara Capital’s estimates. Its average revenue rate grew 16 per cent, while the occupancy rate declined 730 basis points to 67 per cent.   

Following Chalet Hotels' second-quarter results, Elara Capital said that the company is transitioning to become an asset owner from an asset operator. The launch of the 'Athiva' brand marked an important milestone in this regard. 

 

Chalet Hotels is expecting that the occupancy rate will likely recover as the demand for Meetings, Incentives, Conferences, and Exhibitions (MICE) picks up and new room inventory ramps up, according to the brokerage.