Brigade Hotel Ventures Limited (BRIGHOTEL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good afternoon, and welcome to Brigade Hotel Ventures Limited Q1 and FI27 earning 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 on date of this call. These statements are not guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference. With that, I now hand the conference over to Ms. Nirupa Shankar, Managing Director of Brigade Hotel Venture Ltd. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a very warm welcome to Brigade Hotel Ventures Limited Q1 FY27 Earnings Call. I am joined today by members of our Senior Leadership Team, Mr. Vineet Verma, Director, Mr. Anand Atrajan, our CFO, and Mr. Ryan Arana, our Vice President. Before I get into our numbers, I want to spend a moment on the operating environment. The conflict in West Asia remained the dominant factor through April and June. Airspace disruptions and rerouting pushed up fares and journey times on several international connecting routes. Energy and fuel costs stayed elevated and inflationary pressures persisted through the quarter. For an industry that runs on discretionary travel and event planning, a geopolitical shock of this nature is bound to have an impact. However, we were able to anticipate the reduction in foreign travel, and we focused generating demand from local and domestic accounts. Due to this, we were able to drive up our ER by 7%, our occupancy by 2%, and both our REVPAR and our EBITDA by 9%. I'm happy to report that we were also able to increase our profit by 140% from 7 crores to 17 crores. The encouraging part is that this sector's underlying demand engine, that is the domestic corporate travel, weddings, and social events, were largely able to absorb the shock of the West Asia crisis. Corporate travel budgets held up, social calendars continued largely as planned, and the structural undersupply of quality hospitality inventory in India's key micro markets meant that operators with the right positioning were able to hold pricing. This is a distinction worth drawing out. Our Red Park growth this quarter was rate-led rather than occupancy-led, which speaks to the quality of the positioning of our assets rather than simply riding a favorable demand cycle. It was on the F&B side where we saw performance getting impacted due to cancellation and postponement of large mice events, not just for our hotel but in the entire city. MICE activity was soft on account of comparatively dry events calendar during the quarter, a trend that has worsened by the geopolitical tensions. We see this as a temporary event-driven softness rather than a structural change in demand. On the portfolio front, the quarter saw the rebranding of the Four Points by Sheraton Cochi Info Park to Courtyard by Marriott Cochi Info Park. We expect this transition to support ARR realization over time, and given the strength of the Courtyard brand and the strong demand emanating from Cochi's IT corridor, spanning both corporate and leisure segments. Looking at the base business, our existing portfolio is well-placed for steady ARR growth, supported by favorable demand supply balance, and minimal new supply coming into our core micro markets. This gives us confidence in sustained pricing traction and improved realizations over the medium term, even as the broader macro environment remains somewhat uncertain. On growth for FY27, we will see the launch of the Courtyard by Marriott Chennai in the World Trade Center, a 45-key hotel that helps strengthen our footprint in a high-demand business district and adds another premium, well-located asset to the portfolio. We have a clear growth runway with the additional 1,700 keys under development, set to expand our portfolio to 3,300 keys by FY31. The expansion will be anchored by brands like Grand Height, Intercontinental, JW Marriott and the Ritz-Carlton across Bangalore, Chennai, Hyderabad and Kochi. This will lift our luxury and upper upscale mix from 14% today to 31% by FY29 and 38% by FY31, positioning BHVL in the segment with the strongest pricing power and demand supply mismatch. Of our 3,600 crore planned capex for this expansion, 400 crores was already invested in FY26, and we expect to invest another 500 crores in FY27. On the sustainability front, we now use renewable energy for 61% of our total energy needs across the portfolio, with several hotels already operating above 90% renewable energy usage, a metric we continue to track and improve as part of our broader operating discipline. We would like to inform you of a movement in leadership at BHVL. Manoj Agarwal, our former CEO, has designed, and we wish him all the very best. He will be replaced by Mr. Vinay Gupta, who will join us as the CEO of Brigade Hotel Ventures. We have known Vinay for a very long time. In fact, he was the GM of our very first property, Grand Mercure, Bangalore. He has since gained tremendous experience in the hospitality industry, having worked with along with his own entrepreneurial venture. We look forward to his joining us shortly. With that, I would now like to hand over the call to our CFO, Ms. Anna Natarajan, to take you through the financial highlights in detail.

Thank you, Nirupa. Good afternoon, everyone, and thank you for joining Brigade Rotary Ventures Limited Q1 FY27 Earnings Call. I will now take you through the key financials for the quarter. On a consolidated basis, the total income for Q1 FY27 stood at 131 crore, reflecting a 5% year-on-year growth. Consolidated EBITDA increased by 9% year-on-year to 46 crores with EBITDA margin at 34.8%. GST 2.0 had an impact of 1.6% on the EBITDA margin during the quarter. Profit after tax stood at 17 crores as against 7 crores in Q1 FY26, registering a 140% year-on-year growth. From an operating perspective, ARR for the quarter was 7,241, up 7% year-on-year, while occupancy stood at 75.7%. This resulted in a power of 5,479, representing a 9% year-on-year increase. As of 30th June 2026, we had a net cache position of 108 crore. Reflecting the continued strengthening of our balance sheet. On a debt and deleveraging post-IPO, we deployed 468.1 crore of the proceeds towards debt repayment, which has left us with effectively no institutional debt. In our P&L, our finance cost for Q1 FI27 fell to 8.7 crore from 18.9 crore in Q1 FI26, a reduction of over 50%. And this was the single biggest driver of our profit after tax, more than doubling this quarter. For FY26, As a whole, the interest savings was of the order of 24 crore at a blended cost of debt of around 8.25%. On CAPEX and investment, our development pipeline To build out 1,700 upcoming keys by FY30, taking our portfolio from 1,600 keys to 3,300 keys. Of this, around 400 crore had already been deployed by FY26. The funding mix is deliberately Balance, broadly 60% through borrowing and 40% through internal accruals. With internal accruals expected to contribute over 1000 crores across the coming years, as ARR grows, new assets ramp up, and operating leverage plays role. With this, I conclude the financial highlights for the quarter. We will now be happy to take your questions. Thank you.

Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are request to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assemble. Our first question comes from the line of Adidev Chattopadhyay with ICIC Securities. Please go ahead.

Yeah, good afternoon, everyone. I have got a couple of questions. Firstly, on the capex, if you could let us know how much was spent in the first quarter, and of this 500 crores of capex you mentioned for 27, how will this be spread out through the year? That is the first question. And second question is, how are you trending now for the rest of the year in terms of the MICE or F&B in terms of a year on your growth because considering the decline we saw in the first quarter? Yeah, thank you. These are the two questions.

Thank you, Ajay.

In the first quarter, we have spent around 45 crores towards CWIP and renovation of 3.5 crores and new restaurant project grain around 4 crores. So, put together is around 53 crores and the balance amount will be spent over next three quarters.

Okay, so only in the second half, around maybe 350 crores, that is, yeah.

Yes, it will be around 350 crores.

Okay. Okay.

Yeah, Adirev, with regards to the second part of your question, you can see there was an impact of the West Asia crisis. We had an impact of almost 14 crores, which was about 10% of our overall revenue. We are seeing a better pickup in July, a very healthy pickup in July. So, there is a lot of buoyancy in the market right now, and we believe that over this next quarter, we should see a very healthy pickup and some healthy trends. So, when we speak to the hotels, there are a lot of nice events that are coming back into the market, and that's why we had mentioned earlier that we believe that these events have been postponed and not fully canceled. So, yes, the upcoming quarter should be a lot more buoyant than the current Q1 of FY27.

Okay, fine. Okay, that's pretty clear. Thank you. I'll come back in the queue. Five more questions. Sure.

Thank you. Our next question comes from the line of Archana Gude with IDBI Capital. Please go ahead.

Hi, thanks for the opportunity. I have a few questions. Firstly, in the presentation, you mentioned about differentiated strategy for Bangalore and other markets in terms of maximizing wave power. We understand the maximum cost to optimize the revenue and work on the operating matrices accordingly. How we should look at the ARR and occupancy in mid-to-long-term horizon, particularly for the Bangalore markets with 84% of occupancy? Should we consider that we should be looking at now using ARR and maintaining occupant services in the liver? That's my first question.

Hi, thank you for your question. While we did see a decline in terms of growth in our ARRs, occupancy, you will see, stayed fairly healthy. We capitalized, sorry, let me just repeat that. We had a growth in ARR of about 3% for our Bangalore hotels, and there was quite an increase in occupancy of 8%. Which gave us a combined ref power growth of 10% in our bank loaders. So, our focus over here is to maintain our occupancy now and focus on positioning only. We do see the market becoming stronger as we go by. We will have an increase in ADR over the coming three quarters.

I just want to add to that. The good news is that our portfolio has seen a stable occupancy of around 76%. But the interesting thing is that five out of the nine hotels have occupancies of above 80%. So there is scope to grow from the remaining four hotels. The other good news is that our IBIS styles, which just launched about a year ago, the first year, which was a half a year of operations, while it had a 40% occupancy, which is normal for any new hotel. In the second year, we're already seeing occupancies in the 70s. So it is, I think when we look at... Future growth, it's always a play of both ARR and occupancy. If we see that, you know, the market mix is dipping when it comes to, like, for instance, what we just saw in the previous quarter, with international business decreasing, there was a bit of pressure on rates, but we played between the occupancy and the ADR to show an overall red bar increase of 9%. So that is something that we always have to. Since the booking window has significantly reduced, it's hard to forecast for the entire quarter. So we'll have to be a lot more agile in those decisions.

Thank you, Nirupa. That was helpful. Secondly, you mentioned about the appreciation of Kochi Info Park Property Courtyard by Marriott. You did touch upon this incremental ARR, but you see, can you give us some more understanding on what could be that incremental difference in existing ARR and what the management anticipates that will be helpful?

So, Kochi, for Q1 of FY26, the... In Q1 of FY27, we already saw a rate increase to 4,650. But what happened with that property, unfortunately, is there was a huge dip in occupancy, to be honest. The occupancy was 71% last quarter, and then there was a dip in Q1, FY26. This quarter, there was a huge dip because of the reduction in the crew business, again, partly due to the West Asia crisis, and also because of the rebranding and the change of the names in all the GDS systems, there was a dip in the occupancy. But I think... Since that happened in the Q1 of the rebranding, Q2 is again showing very positive signs. We're already seeing occupancies back up to high 60s, and maybe it should hopefully trend in the 70s as well in the coming quarter. But we believe that at least a minimum of 10% ADR growth in this year, and hopefully capitalize on that as we go ahead.

Sure. But then again, that would be a mix of your focusing more on occupancy because that has dipped pretty significantly in what you had.

Yeah, because if we suddenly increase the ADR, then it will be hard to drive up the occupancy. But I think a 10% this year or the next couple of quarters is very reasonable, I would say.

And I hit it. So you spoke, you know, in detail about West Asia crisis and the impact. How was July 1st for us? Is there any improvement on what we saw, what was in Q1, or the things are more or less similar like that?

Like I said, it's started to get buoyant. I think all the hotels have been performing well in July thus far. Hopefully, if there are no additional shocks, we should be able to achieve the targets that we have set out for ourselves.

Last, we have a bookkeeping question on participation of room revenue and SMB for Q1.

Did you say the revenue contribution

from, yeah, room revenue and F&B revenue.

Yes, F&B contributes about 32% of our overall top line.

Sure. That was helpful. Thank you so much and all the rest.

Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchtone telephone. Our next question comes from the line of Saurabh Gilda with JM Financial. Please go ahead.

Yeah, thanks for the opportunity. Just wanted to, you know, the performance for Bangalore appears quite resilient given the environment that we are currently in. Occupancy and ADR was both were up. So just wanted to get a sense. What has led to this? Is it, you know, led by the anchor, you know, shift to domestic demand or the business demand is back on track?

Thank you for the question. So I think going by Q4 of FY26, we saw that the foreign travelers were reducing. So what we strategically did was that we started contacting our local domestic, it's called locally negotiated rates, so all the domestic accounts, and we started getting their business back into the hotel. We focused a lot on staycations because there was not that much of my business happening over the weekends. Apart from that, we did have to focus on social events and a few weddings. Of course, this quarter is not great for the number of good wedding dates, but that's how we try to displace the business by anticipating that foreign travel would be limited. What was actually impacted while we managed to do a really great job with the revenue management for the hotels, we did see that dip coming in from X&B. A lot of the large mice events that were supposed to happen did not happen. So we did our best to displace that and focus on the room revenue instead.

So, got it. That's what my only question. Thank you.

Thank you.

Thank you. Our next question comes from the line of Pulkit Chawla with 361 Capital. Please go ahead.

Yeah, hi. Thanks for the opportunity. My first question, just a small clarification. You mentioned about the decline in occupancies in one of your non-Bangalore properties. Was that the sole reason why the non-Bangalore properties have seen the occupancy decline? Second, if you could just help me with the proportion of FTAs in this quarter, and fundamentally as well, I mean, how are FTAs differing from domestic travelers? Do they typically spend more, or is the length of sale longer? And third, you earlier alluded to mid-team sort of growth for FI27. You obviously started off slightly slower, and now Q2 and Q3 also you will have the high base of last year. So do you still maintain that or will there be some lower growth for FI27 there?

As for all those questions, I'll do my best to attempt answering all of them. If I forget one, do remind me. The good news is that, yes, apart from one hotel, which was much lower, like I said, it was the Courtyard by Marriott property, which we did the rebranding, and also we had displaced, I mean, the crew business did not come into that hotel, and we had a significant crew business for that hotel. Apart from that, every other property of ours has shown an increase in the occupancy, but Courtyard had a significant difference, and that's why the average is not higher than what it should be. But like I said, we improved the Q1Q portfolio number from 74.5% to 76% in this Q1. The second question you asked is on the FTA mix. Our FTA mix has slightly dropped, So, right now, the FDA contribution is about 30% of the overall room arrivals. So, previously, it was more of a 60-40, where 40% was from foreign travelers. Now, it's dipped to 30%. So, that 10% reduction is there. The third point you mentioned was on...

So, the mid-teams growth that you were expecting for this year as such.

Couple of other points. FTAs typically pay a better ADR, so that's why there was also a little pressure on the ADR as well, but FTAs would also pay slightly higher ADR than the domestic companies. And the third is on the overall growth. We have tried to maintain a like-to-like growth of mid-teens, you know, in that mid-teen range. And that's why if you look at it, our top line increased by 5%. But as I mentioned earlier, we saw a 14 crore impact in terms of cancellations of business in our books. And that 14 crore is pretty much equivalent to 10% of the overall top line. So otherwise, if it wasn't for those cancellations, we would certainly have achieved that mid-teens growth. Remaining part of the year is looking good. I have, like I said, Q2 is looking very buoyant. We've started getting some good bookings and larger mice inquiries and also some, yeah, so it's quite buoyant, especially September is looking extremely buoyant, but July is also showing good signs. What we are very hopeful of doing is making up the lost revenue in Q1 in the second half of the year. Again, Q4 of FY27 is looking extremely healthy because it's, again, one of those aero show years, and a lot of the mice events alternate, the large-scale mice events come every alternate year. So, we're really hoping to make that up, and we are putting in every effort to get into those mid-teen growth. The other positive thing is that we will be opening the WTC Courtyard by Marriott in our Chennai property. While it is a small hotel, you know, it should add to our overall growth guidelines.

Got it. Thank you.

Thank you.

Ladies and gentlemen, anyone who says to ask a question may press star and one on the restaurant.

Thank you. Our next question comes from the line of Karan

Kamdar with Choice Institutional Liquities. Please go ahead.

Hello, thank you for the opportunity. I hope I'm audible. My first question is on the status of the status updates of our live projects. And do we see any delays there or is everything running smoothly?

Hi, thanks for that. As of now, everything is running smoothly. We had planned to launch the WTC in Chennai, the Courtyard by Marriott in WTC Chennai in October of Q3 of this year, which it should happen. Both our fairfields are also under construction and well underway. We had mentioned that there would be a slight delay in the Grand Hyde, which we had originally slated for FY28, but there is going to be a slight delay in the Grand Hyde because we're waiting a few minutes. We have a few approvals there. Apart from that, all the other properties are in the right phases where they should be done, design, development, or some of them are mixed-use townships, such as the Intercontinental Hotel and Brigade Gateway, or the... Yeah, so that's the main one where there's a dependency, so that's also underway. Our Rizkalton-Vicom is also well underway. We've finalized our designs for that property. JW Marriott Chennai, again, the excavation should start soon. Trivang Hotel, that's also under design development. And again, we've made a good progress with our property on Tunku Road in Bangalore. We are again, we're just waiting for approvals in this property, and we're ready to get started.

Okay. Thank you for that. On the, you have a newly opened, newly renovated bar and restaurant. Could you guide us on what the annual run rate was for Avenue previously, and what do you expect going forward?

Yeah, it just started, so I would give it a couple of quarters. It just opened a couple of months ago, so every month we've seen a very, I mean, at least 100% growth from month one to month two to month three, but I would give it another quarter before we start reporting.

Okay, got it. Thank you. That's it from my side. All the rest.

Thank you.

Thank you. Ladies and gentlemen, anyone who says to ask a question may press star and one on their test phone telephone. Our next question comes from the line of Vaibhav Muleh with Hightong India Securities. Please go ahead.

Hi, thanks for the opportunity. My first question was on our overall ARR and occupancy growth across the market. Just wanted to delve a bit more on our revenue management strategy. We have seen a very strong occupancy conversion in that growth, but ADR growth has been . Is there a chance going forward to focus on ADR groups more even at the expense of occupancy which can lead to better flow-throughs as well as the margin. So, just wanted to get more color on the strategy and high occupancy.

Hi. So overall, I would say all our properties have shown an increase in ADR, which is extremely good, apart from maybe, you know, Sheraton Grand is a 500 rupee difference from Q1 of FY27 to Q1 of FY26. But apart from that, every single hotel has shown an ADR growth. So, while also showing an increase in occupancy. So, like I said, it is, you know, the only property, like I said, which saw a little hitch was our courtyard by Marriott in Kochi. But apart from that, all our properties have shown an increase in the ADR. And overall for the portfolio, what is really encouraging is that Q1 FY26 had a 6,761 rupee ADR, and we've already increased it to above 7,241. We had also mentioned we are doing our best to push the entire portfolio and each hotel above that 7,500 rupees so that that GST impact can also be negated. And yes, we are actively working to ensure that overall ADR does cross that 7,500 mark. It's not just for the portfolio, but we are wanting to do it for the individual hotels as well.

I understood. Secondly, on the WTC generally, the property that we are going to launch, what kind of PDRs and opportunity do you expect in the first 12 months and that is the contribution of revenue and as it is, I think that is some colour.

And a very unique micro market around the, you know, which is the World Trade Center around. We do expect a minimum of 9,000 rupees as a starting EDR, and then we expect that to grow in the coming months. This is one hotel that we expect to stabilize quickly and having been, I mean, should be continuously occupied through the week. So we see occupancies range, stabilized occupancies at about 80%.

It has a captive demand. So that's why we expect it to stabilize quite quickly. And being within walking distance of all major companies, we believe that it should command a higher price because customers are actually saving time and not having to spend time in traffic. They can just walk from the hotel to their office campus. We're already speaking to all the tenants in our World Trade Center and trying to get captive demand for the hotel all year round.

Perfect. Thank you so much.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and 1.

Our next question comes from the line of Sumit Kumar with JM Financial.

Hi, good afternoon. Thanks for the opportunity. My first question is on the FNB revenues. Was this sort of performance seen across all hotels, or it was impacted at one or two properties, particularly the Sheraton Grand? So if you could give some more color on that.

At our Sheraton Grand, considering the size of the bank putting that's available at the hotel, as well as the number of outlets, the distribution of the revenue in this hotel is approximately 50-50 for rooms and F&B. So the largest impact came in from there. The other hotels averaging at around 30% contribution from F&B saw a lesser impact. So, wherever there is a, and not just in our portfolio, but across the country, the larger the capacity for mice and catering, the larger the impact was. So, Sheridan took the biggest hit for us.

Okay. Just another question on this. You mentioned about 14 crores lost due to cancellations. So, were they event-led or you saw room cancellations, room booking being cancelled as well?

The larger impact over here was from MICE events, which is a combined booking of rooms and F&B. So anything, rooms connected to a large event happening in the cities here, that's when, that's where we saw a larger drop coming in. But while the rooms were very quickly replaced with domestic corporate business, we couldn't replace the F&B business. So, cancellation in that 14th floor. Roughly about 60% to do with F&D and the balance to do with rooms.

And typically, what is the contribution of mice to your room bookings on a portfolio level?

Roughly, it should be about 15% to 18% of my business for us.

Okay. And one last question, if I may. In the assets that are mentioned in the pipeline, there are two of them which are under planning phase. One is the JW Marriott, and the other one is the Tiruvantarampuram Hotel. What should be the commissioning timelines for these? Would it be FY30, or it's too early to, let's say, say something about this?

The JW Marriott Hotel is actually under approval. Thiruvanantapuram is actually, again, we're pending some information there before we finalize on the design, but it's still under planning phase, I would say.

But should we assume four years from now to be the opening date or, you know, the commissioning timeline for these two assets?

I think both should happen by 2030.

Okay.

Okay. Thank you. That's all for my name.

Thank you. Next question comes from the line of Sharon with Ventura. Please go ahead.

Hi, thanks for the opportunity. Actually, I wanted to understand like the part of the IPO process, which is kept aside with an objective to acquire a hotel. Like I just wanted to understand whether is it going to the acquisition is going to happen in 27 itself or any ongoing discussions for the acquisition is going on.

Thank you for the question. Yes, we're under discussion. We're hoping to conclude a transaction in FY27, but it is subject to due diligence.

Thank you.

Thank you. As there are no further questions from the participant, I now hand the conference over to Mr. Vineet Verma for closing comments. Thank you and over to you, sir.

Thank you. Thank you all for your time and continued engagement with Brigade Hotel Ventures Limited. We truly appreciate your support. Before we close, I would like to briefly reflect on what has been a landmark quarter for us on the corporate front. On 5th August, which is yesterday, we hosted our 10th Annual General Meeting, and importantly, our first as a listed company. During the AGM, our chairman, Mr. Aymar Jayashankar, and managing director, Ms. Nirupa Shankar, shared insights on our performance and outlined the company's strategic priorities for the future. We have also strengthened our engagement with the investor and analyst community through an in-person interaction hosted sometime back at one of our hotels in Bangalore, following site visits to select properties. As a newly listed company, we remain committed to fostering transparency, building investor confidence, and maintaining an open dialogue with all our stakeholders. It was also a quarter of well-deserved recognitions, both for our leadership and our properties. Our Managing Director, Ms. Neerupa Shankar, was named as Fortune India's 100 Most Powerful Women list for the second consecutive year and was further recognized by business today among India's most powerful women in 2025. Personally, I had the honor of being recognized amongst India's top 50 great people managers by the Great Manager Institute in 2026 this year. At the property level, the Shine Spa at Sheridan Grand Bangalore, Brigade Gateway, was awarded the Best Hotel Spa for South by the famous Global Spa magazine, while both Cafe G at Holiday Inn, Chennai OMR IT Expressway, and Grand Mercure Ahmedabad Gift City were honoured on the IHC London and IIHM Hospitality Honours List for 2026. These recognitions are a proud reflection of the talent and dedication across our organisation. With that, we conclude our remarks for today. We would like to thank all our shareholders, analysts, and investors for their continued trust and support. For any further queries or clarifications, please do reach out to SGA, our investor relations advisors. Thank you once again for joining us and wish you all a great day ahead.

Thank you so much, sir. Ladies and gentlemen, on behalf of Brickett Hotel Venture Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines.