Brigade Hotel Ventures Limited — Q2 FY26

Brigade Hotel Ventures Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=IraiGU4vuaI Published: 6 months ago

0:01 1 second Ladies and gentlemen, good afternoon and welcome to Brigade Hotel Ventures Limited Q2 FY26 earning conference call. 0:11 11 seconds Before we begin, I would like to remind participants that this conference call may contain forward-looking statements which are based on the beliefs, 0:19 19 seconds opinions, and expectations of the company as of today. 0:24 24 seconds These statements are not the guarantees of future performance and impulse risk and uncertainties that are difficult to 0:31 31 seconds predict. As a reminder, all participant clients will be in the listenon only mode and there will be an opportunity 0:38 38 seconds for you to ask questions after the presentation concludes. Should you require assistance during the conference call, please signal an operator by 0:47 47 seconds pressing star then zero on your touchstone telephone. 0:51 51 seconds Please note that this conference is being recorded. 0:55 55 seconds With this, I'll now hand the conference over to Miss Nirup Shankar, managing director of Brigade Hotel Ventures Limited. Thank you and over to you ma'am. 1:10 1 minute, 10 seconds Good afternoon everyone and a very warm welcome to the Brigade Hotel Ventures Limited Q2 FY26 earnings call. I'm 1:18 1 minute, 18 seconds joined today by members of our senior leadership team. Mr. Vin, director, Mr. 1:23 1 minute, 23 seconds Anan Atrajan, our CFO, Mr. Manoj, Mr. Ryan Arhana, our vice president. As 1:32 1 minute, 32 seconds most of you are aware, our portfolio comprises of nine operating hotels with 1,600 keys. Our model is a blend of 1:39 1 minute, 39 seconds asset ownership and global management partnerships with worldclass hospitality leaders. 1:45 1 minute, 45 seconds Continuing with our philosophy of owning quality hotel assets at the right location, we are now entering a strategic phase of expansion, aiming to 1:54 1 minute, 54 seconds double our hotel portfolio by adding approximately 1,700 keys over the next 5 years. Our development pipeline has a 2:01 2 minutes, 1 second healthy mix of both luxury deluxe properties, upscale properties, as well as a healthy mix of leisure and business 2:08 2 minutes, 8 seconds properties. Key upcoming projects include the courtyard by Marriott in the in our Chennai World Trade Center project. Two Fairfield by Marriott 2:17 2 minutes, 17 seconds hotels in Bangalore, the Grand Hyatt Chennai on ECR which is a leisure five-star deluxe hotel and the 2:24 2 minutes, 24 seconds intercontinental hotel in Hyderabad a landmark luxury development as well as the Ritz Carlton Wellness Resort in Vcom 2:32 2 minutes, 32 seconds Kerala. We also have a JW Marriott in Chennai on uh old Marali Puram road. Um 2:39 2 minutes, 39 seconds and a Marriott in Thuvanapuram as part of our World Trade Center Travandram Complex. Um and we have purchased the 2:47 2 minutes, 47 seconds land for an upscale hotel near Tungo Road in Bangalore. We are looking at a total capex investment of 100 crores over the next 5 years for these hotels. 2:57 2 minutes, 57 seconds Coming to the current period performance in Q2 FI26, I'm pleased to share that BHVL delivered a strong performance with 3:05 3 minutes, 5 seconds total income growing at 20% year-onear supported by healthy operating metrics. 3:10 3 minutes, 10 seconds EITA rose by 9% year-on-year to 41 crores. Um although it was impacted by an additional property tax expense of 6 3:19 3 minutes, 19 seconds crores excluding this uh operational EIA would have registered a 25% growth year. 3:26 3 minutes, 26 seconds A few of the performance highlights. 3:29 3 minutes, 29 seconds Bangalore de delivered a very strong performance with ARR growing at 19% and average occupancy of 75.6% 3:38 3 minutes, 38 seconds resulting in a 14% refpar. In GIF city, the market continues to gain traction supported by 3:45 3 minutes, 45 seconds growing commercial activity. A hotel there delivered ARR and RefPa growth of 23% and 16% respectively. Our Mso Hotels 3:53 3 minutes, 53 seconds maintain strong occupancy with newly launched Ibis Myso ramping up and achieving 61% occupancy in just its 4:01 4 minutes, 1 second fourth quarter of operations. Our FNB business registered 14% year-on-year growth driven by strong mice, weddings, 4:09 4 minutes, 9 seconds and social events. We remain committed to elevating guest experiences and driving FNB revenue across our hotels. 4:17 4 minutes, 17 seconds At Grandmccure Bangalore, we have relaunched our signature restaurant by the blue following a successful renovation. At at Grandmure Gift City, 4:26 4 minutes, 26 seconds uh renovation is underway for the bar and we will additionally introduce a new Panasian restaurants. We also have made efforts to improve cost control and 4:34 4 minutes, 34 seconds productivity. Um and this continues to yield positive results. Utilities as a percentage of operating revenue stood at 4:42 4 minutes, 42 seconds just 5.6% 6% for Q2 um as opposed to 5 and 5.7% for H1 as opposed to 7% in previous quarters. 4:53 4 minutes, 53 seconds Interest costs have reduced due to loan payments positively impacting the net profitability. We are actively advancing adoption of renewable energy which 5:01 5 minutes, 1 second currently stands at close to 60% with some hotels exceeding 90% use. 5:08 5 minutes, 8 seconds Looking ahead, we expect this growth momentum to sustain in H2FY26 supported by robust corporate demand, 5:14 5 minutes, 14 seconds festival travel, a longer leisure stays and the wedding wedding season. With that, I now would like to hand over to 5:22 5 minutes, 22 seconds our CFO Ana Natrajan to take you through the financial highlights. 5:28 5 minutes, 28 seconds Thank you Nupa and good afternoon everyone. I'll be taking you all through the key financial highlights for the 5:35 5 minutes, 35 seconds quarter and half year ended 30th September 2025. 5:40 5 minutes, 40 seconds Starting with the financial performance for Q2 FY 2026. 5:45 5 minutes, 45 seconds The total income stood at INR 130 crores as compared to INR 108 crores in Q2 FY 5:54 5 minutes, 54 seconds 2025 an increase of 20% year on year. Abita 5:59 5 minutes, 59 seconds was INR 41 crores against INR 38 crores in the same period last year reflecting 6:07 6 minutes, 7 seconds a growth of 9%. The company reported a profit after tax of INR 11 cr as 6:14 6 minutes, 14 seconds compared to INR 7 cr in Q2 FY 2025 a growth of 58% yearonear 6:23 6 minutes, 23 seconds moving to the first half of FY 2026 total income 6:30 6 minutes, 30 seconds stood at INR 255 crores compared to INR 211 crores in H1 2025 and increase of 21%. 6:41 6 minutes, 41 seconds EIA for the period was INR 83 cr up by 16% yearonear from INR 72 cr in H1 FY2025. 6:53 6 minutes, 53 seconds PAT stood at INR 18 crores against INR 1 cr in H1 2025. 7:01 7 minutes, 1 second Coming to the operational metrics for Q2 FY 2026, the AR stood at INR 7,106 7:10 7 minutes, 10 seconds compared to INR 6,247 in Q2 FY 2025. 7:17 7 minutes, 17 seconds Occupancy during the quarter was 75.6%. 7:21 7 minutes, 21 seconds This translate into a repar of INR 5374 representing a yearon-year growth of 13%. 7:31 7 minutes, 31 seconds For H1 FI 2026, AR was INR 6,936 versus INR 6310 7:39 7 minutes, 39 seconds in H1 2025 with occupancy at 75.1%. 7:46 7 minutes, 46 seconds Consequently, rep R repa stood at INR 5209 7:52 7 minutes, 52 seconds reflecting a growth of 11% year on year from our IPO proceeds of 886 crores. 468 8:01 8 minutes, 1 second crores was utilized in Q2 FY26 for debt repayment resulting in significant interest savings. As of September 2025, 8:11 8 minutes, 11 seconds we deployed an additional 107 cr for the acquisition of prime land parcel from our promoter and 17 cr towards general 8:20 8 minutes, 20 seconds corporate purposes. In total 592 crores has been deployed from the IPO proceeds 8:26 8 minutes, 26 seconds by September 2025. Our net cash as on 30th September 2025 stood at INR 111 cr and adjusted ROC Rossi were 9.9%. 8:41 8 minutes, 41 seconds With that I conclude the financial highlights and I would like to open the floor for any questions. 8:48 8 minutes, 48 seconds Thank you. 8:52 8 minutes, 52 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 9:01 9 minutes, 1 second star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you 9:08 9 minutes, 8 seconds may press star and two. Participants are requested to use handsets while asking a question. 9:15 9 minutes, 15 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. 9:41 9 minutes, 41 seconds The first question is from the line of Abidv Chapod there from ICAC securities. Please go ahead. 9:48 9 minutes, 48 seconds Yeah, good afternoon everyone. Thank you for the opportunity. Uh my questions are pertaining to the capex which you have outlined of 3600 crores. you just help 9:57 9 minutes, 57 seconds us understand how will the phasing of this capex the next at least 3 to four years on will it be spread out equally or it be more front end or back ended 10:06 10 minutes, 6 seconds that is the first question and second part for that is sway projects for example the intercontinent continent the 10:13 10 minutes, 13 seconds intercontinental and hyderabad now that we have paid for the land right uh but I understand it is with the mall and the office building so how does the capex 10:22 10 minutes, 22 seconds get phased out in that asset particularly yeah thank you these are my questions Yeah. Uh thanks Adid. 10:31 10 minutes, 31 seconds As you know with hospitality most of the is usually backended uh in the usually 10:38 10 minutes, 38 seconds the design development phase and uh very initial for approval very initial amount for approvals. Um it's if if you look at 10:47 10 minutes, 47 seconds a hotel from a overall fouryear cycle including after it operates because we keep some retention money most of it is 10:54 10 minutes, 54 seconds I would say back ended maybe 60% could be coming in the third year and maybe 11:00 11 minutes even in the fourth year so the for year one you can look at just mostly design development then about 20% uh year two 11:10 11 minutes, 10 seconds year year three also maybe another 30 40% balance in year four and some retention amount amount between 10 to 15% is kept even after the hotel 11:18 11 minutes, 18 seconds operates. So when it comes to our hotels, we are still under we have started some construction but mostly 11:25 11 minutes, 25 seconds under design development. Um and in this year we will have we have a cash balance of about 350 odd crores 11:34 11 minutes, 34 seconds uh overall IPO proceeds and internal approvals but we may not land up using all of it just yet. 11:41 11 minutes, 41 seconds like I said will be phased over 5 years and primarily backended with regards to the intercontinental hotel. Uh like you 11:49 11 minutes, 49 seconds rightly said first the the excavation is under progress and we're we are uh we should be starting with the mall 11:55 11 minutes, 55 seconds initially then the u um WTC Hyderabad and only then will the hotel come up. 12:02 12 minutes, 2 seconds However, some of the structural costs are common. So um but the hotel our our part will begin only after a year and a half or so. 12:13 12 minutes, 13 seconds Okay. Okay. Got that. And just one more question on you mentioned that uh second half the business outlook looks pretty 12:20 12 minutes, 20 seconds good. So anything you can say how October has been considered. It's mainly uh obviously lot of festivals but 12:26 12 minutes, 26 seconds obviously how is the business on books for November December for the espec especially for the business hotels. If you could just give some color on that. 12:35 12 minutes, 35 seconds Yeah, like you rightly said, October is uh a little bit on the slower side as expected and uh uh it's been budgeted 12:43 12 minutes, 43 seconds already because of Diwali festivals and some long weekends but be able and we should be able to make it up between 12:51 12 minutes, 51 seconds November and December which are clean months and those two months are looking extremely strong. So nothing uh of concern for us in Q3 and Q4. 13:01 13 minutes, 1 second Okay. Okay. Thank you. All the best. Yeah. 13:08 13 minutes, 8 seconds Thank you. The next question is from the line of Mortua Ashiwala from Kotuk Securities. Please go ahead. Yes. 13:17 13 minutes, 17 seconds Hi. Uh I'm two questions from my side. 13:19 13 minutes, 19 seconds One is when I look at the cash flow statement there is a large 45 cr which is coming in from changes in working 13:27 13 minutes, 27 seconds capital for first half 26. Uh just seems a cyclable numbers some color that 45 cr number please. And second u you know uh 13:36 13 minutes, 36 seconds the AR performance looks extremely strong far better than what some of the P set or the industry data points suggest. So any color on what we would 13:45 13 minutes, 45 seconds have done differently or benefited from our markets uh for such performance? Of course it's a highly commendable one. 13:54 13 minutes, 54 seconds Hi we couldn't hear the first part of the question. I heard the second part. 13:58 13 minutes, 58 seconds If you could just repeat the first part on the 45 crores. Yeah. 14:01 14 minutes, 1 second Uh the first one is on the cash flow statement. There's a large 45 K coming in from changes in working capital. So 14:10 14 minutes, 10 seconds you know uh any color on what uh that number is or what uh it comprises of? 14:18 14 minutes, 18 seconds Yeah. Uh see the 45 crores consist of there is a movement of uh trade payable because of provisioning for the banker's 14:26 14 minutes, 26 seconds payment for issue expenses we have provided which is around 20 crores and there is a uh reduction in other assets 14:33 14 minutes, 33 seconds which is we have kept whatever last year paid towards issue expenses we kept as a prepaid which has moved uh that is 14:42 14 minutes, 42 seconds around 13 cr that is the major uh movement otherwise working capital is on operational side it's all uh flat there 14:51 14 minutes, 51 seconds is no much movement in this sure sure and the second and the second part of the question ar yeah yeah we are happy 14:59 14 minutes, 59 seconds with the way the ar has happened with close to 20% for the Bangalore hotels um 15:05 15 minutes, 5 seconds we have at this quarter I think the revenue management teams are always figuring out how to best balance between 15:12 15 minutes, 12 seconds rate and occupancy wherever possible we do try to uh see per rate uh enhancement as possible while keeping occupancy 15:19 15 minutes, 19 seconds levels high. Our port is fairly liized at a good level of 76% or so. So 15:27 15 minutes, 27 seconds occupancies remained uh somewhat stagnant. 15:32 15 minutes, 32 seconds We were able to increase the ARR. It's more of a revenue management play based on how we see um the trends and the high 15:38 15 minutes, 38 seconds demand dates. And of course our hotels have also had a good number of uh large conferences. So that also helps in terms of enhancing the arr. 15:50 15 minutes, 50 seconds Thank you. Thank you. 15:58 15 minutes, 58 seconds Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touchstone telephone. 16:06 16 minutes, 6 seconds The next question is from the line of Sumit Kumar from JM Financial Institutional Securities. Please go ahead. 16:14 16 minutes, 14 seconds Hi uh good afternoon everyone. Um thanks for the opportunity and congratulations on a good set of numbers. Uh I have 16:21 16 minutes, 21 seconds three questions. Uh first one is the room revenue grew by 18% uh but same 16:27 16 minutes, 27 seconds store ref bar was up by 14%. Uh is this the impact of uh increase in room 16:34 16 minutes, 34 seconds inventory from the uh Mysore hotel or anything else that we are missing? 16:41 16 minutes, 41 seconds So the ref bar uh grew by lower because the occupancy also came down a little bit uh because the myso hotels of course 16:50 16 minutes, 50 seconds have a lot lower occupancy so that also reduces uh the arr but overall um I would say it's 16:58 16 minutes, 58 seconds basically the fact that occupancy came down in say in some of the hotels and for instance in Bangalore hotels we were 17:06 17 minutes, 6 seconds at a 81% occupancy and that has actually come down to 78%. So that is reflected in the ref bar. 17:16 17 minutes, 16 seconds Uh but I was I was looking at the room revenue uh number that has grown by 18%. 17:23 17 minutes, 23 seconds Uh and repar was 14. So I was wondering if that because of the launch of IB 17:30 17 minutes, 30 seconds styles uh last year or is there anything else? Yeah, it's mainly the IB styles also because that's the major difference 17:38 17 minutes, 38 seconds because that's the only new addition from a same store perspective. 17:41 17 minutes, 41 seconds Okay. Okay. And uh the second question would be a follow-up to the last one by Mutuza. Uh in Bangalore uh were there 17:50 17 minutes, 50 seconds any properties that stood out or uh you've seen strength across the market across all your properties? 18:01 18 minutes, 1 second So primarily the uh biggest growth rate in the ARR came from our sheritin. If I had to compare the two quarters um Q2 18:10 18 minutes, 10 seconds FI25 was about 10,500 and in Q2 FI26 it was 13,000 or so and uh all the other 18:19 18 minutes, 19 seconds hotels the other hotels% uh 14 to 15% increase but Sheritan had a 25% increase. 18:27 18 minutes, 27 seconds Sure. And and the last question was on this property tax uh impact. Uh what was this and on which property was this 18:36 18 minutes, 36 seconds incurred and are there any more contingent uh liabilities here? 18:48 18 minutes, 48 seconds So this was uh only for the grandmure. 18:50 18 minutes, 50 seconds It seems to be a one-off uh ex uh uh it see grandma makure Bangalore seems to be a one-off um uh 18:59 18 minutes, 59 seconds onetime expense and uh it was basically how you uh basically how the property tax was assessed. So there's a 19:07 19 minutes, 7 seconds difference in the way it was assessed and hence we've paid it off. 19:11 19 minutes, 11 seconds Okay, cool. Thank you. That's all from my side and all the best. Thank you. Thanks. 19:19 19 minutes, 19 seconds Thank you. A reminder to all the participants that if you wish to ask a question, you may press star and one on your Touchstone telephone. 19:29 19 minutes, 29 seconds The next question is from the line of Ragav Malik from Jeff. Please go ahead. 19:35 19 minutes, 35 seconds Yeah. Hi, thank you for the opportunity and uh congrats on a strong set of numbers. Uh the first question was just on the follow up on the rep pass for 19:42 19 minutes, 42 seconds October. So you uh mentioned that it's been a bit slower due to the long weekend. So can we is that like a sufficient understanding to say that 19:50 19 minutes, 50 seconds maybe refire has dipped below even like teams levels for October or is it just relatively weaker versus you know the expectation for 3Q? 20:02 20 minutes, 2 seconds No, no, it won't go lower than teens. 20:04 20 minutes, 4 seconds We'll maintain a similar repar. What what we mean is that uh generally occupancies and we've already budgeted this for the year because with the data 20:13 20 minutes, 13 seconds and Diwali coming um close to each other there are long weekends. So it's anyway already budgeted for October to be 20:20 20 minutes, 20 seconds slightly uh slower than a November and December. In terms of repa we we expect to keep it in the mid teens. 20:29 20 minutes, 29 seconds Okay, noted ma'am. and uh also on the on some of the hotels. So is there any are there any of our hotels which have like 20:36 20 minutes, 36 seconds a significant sort of mice contribution and if so is there like a swing we can see in the kind of FNB revenues that we 20:43 20 minutes, 43 seconds have I think it was about 25% for the first half. So is there a strong swing that we could see in the second half of the year? 20:54 20 minutes, 54 seconds So the the hotel with the largest amount of our fivestar deluxe property the Sheran Grand and uh yes they are seeing 21:03 21 minutes, 3 seconds a very healthy November and December. Um exact percentages you know we will be able to say only the following quarter 21:10 21 minutes, 10 seconds but uh it is showing a good trend over the next two quarters. 21:16 21 minutes, 16 seconds Okay. Sure. Noted. And just one longerterm question on uh just the new additions that we're doing as we premiumize our hotels. uh so with some 21:24 21 minutes, 24 seconds of them about half of them maybe coming in by FI 2728 a few of them which I see are luxury and upper upscale as well 21:31 21 minutes, 31 seconds what's any like range of delta that we can see in terms of average RR for our hotels anything that you guys have you 21:38 21 minutes, 38 seconds know thought of in that context yeah I think once the luxury properties come within the portfolio then at least 21:46 21 minutes, 46 seconds a third of our portfolio will be in the fivestar luxury deluxe category we'll have about six of the 18 hotels in the fivestar luxury deluxe category. So you 21:54 21 minutes, 54 seconds should see a significant uh uptake in the ARR. But uh just to clarify that these will come only towards the end of 22:01 22 minutes, 1 second FY28 and some in FY29. So FY27 we are looking to add only the a 45 room 22:08 22 minutes, 8 seconds courtyard by Marriott within our World Trade Center Chennai uh project. Okay. Sure. Not in ma'am. Thank you. 22:18 22 minutes, 18 seconds Yeah. Thanks so much. 22:23 22 minutes, 23 seconds Thank you. A reminder to all the participants that if you wish to ask a question, you may press star and one on your touchstone telephone. 22:34 22 minutes, 34 seconds The next question is from the line of Madhav from SKP. Please go ahead. 22:40 22 minutes, 40 seconds Yeah. Hi. So my question was like in terms of ARR I wanted to know that on a same shore basis like how confident are 22:49 22 minutes, 49 seconds you that on like at what rate you can grow your ARR especially for your hotels in Bangalore. 23:01 23 minutes, 1 second Um so we see typically when we do uh feasibilities we try to be conservative and say you know high single digits or 23:10 23 minutes, 10 seconds low double digits for for stabilized properties but we've been able to uh increase it by a healthy number of 23:17 23 minutes, 17 seconds around 14 odd percent for the entire portfolio. Um so I would like to maintain that we can stick to mid- teens 23:25 23 minutes, 25 seconds to high teens for the next uh two quarters. 23:33 23 minutes, 33 seconds Okay, thank you. 23:38 23 minutes, 38 seconds [Music] 23:42 23 minutes, 42 seconds Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one on your touchstone telephone. 23:54 23 minutes, 54 seconds A reminder to all the participants that if you wish to ask a question, you may press star and one on your touchstone telephone. 24:39 24 minutes, 39 seconds Ladies and gentlemen, that was the last question for today. I now hand the conference to Mr. Manojuch Agarwal, CEO 24:46 24 minutes, 46 seconds of Brigade Hotel Ventures Limited for closing comments. Over to you, sir. 24:58 24 minutes, 58 seconds Thank you. Thank you. Uh first first of all I would like to thank you all for joining today's call. We trust this uh session has provided a comprehensive 25:06 25 minutes, 6 seconds overview of our business performance and addressed your key queries. Our strategic focus remains clear to grow 25:13 25 minutes, 13 seconds responsibly deliver exceptional guest experiences and create long-term value for all our stakeholders. Before we 25:20 25 minutes, 20 seconds conclude, we are proud to share that Sheran Grand Bangalore at Brigade Gateway has won two prestigious awards 25:27 25 minutes, 27 seconds this quarter from SATA for leading city hotel and leading meeting and uh leading meeting and conference hotel. 25:35 25 minutes, 35 seconds Additionally, the hotel general manager was honored at the ETF FNB achiever conclave 2025 by the times of India. Our 25:44 25 minutes, 44 seconds hotels continued to uphold their commitment to community engagement and social responsibility through a range of impactful initiatives. These initiatives 25:53 25 minutes, 53 seconds included school supply drives, health camps, NGO partnerships, and events for for for the elderly and differently 26:01 26 minutes, 1 second aabled. We are confident in our ability to sustain the momentum built this quarter and expect continued performance 26:08 26 minutes, 8 seconds in the quarters ahead. We look forward to sharing more updates and achievements as we progress. For any further queries or clu clarifications, please feel free 26:17 26 minutes, 17 seconds to reach our uh reach out to SGA our investment investor relations advisors and their contact details are mentioned in the investor presentation uploaded on 26:26 26 minutes, 26 seconds our website. Thank you once again for your time and participation and we wish you all a great day. 26:35 26 minutes, 35 seconds On behalf of Brigade Hotel Ventures Limited, that concludes this conference.