CHALET

Builds Operating Leverage Amid Lifestyle Brand Expansion

has delivered strong revenue growth in H1FY26, yet its stock has remained flat due to earlier premium valuations. The company’s strategic pivot lies in the launch of Athiva Hotels and Resorts, a premium lifestyle brand that could transform Chalet from a franchise-heavy operator into a brand-led hospitality platform, improving margins and reshaping its business mix. - Athiva Launch as Game-Changer Athiva Hotels and Resorts debuts with 900+ keys across six properties in Khandala, Navi Mumbai, Aksa Beach, and Goa. Within three years, capacity is expected to double. By eliminating franchise fees and loyalty charges, Athiva can structurally lift EBITDA margins. Athiva could represent 20–25% of Chalet’s total key base (currently 3,389) once ongoing developments go live. This transition from global franchise brands (Marriott, Westin, Accor) to proprietary assets positions Chalet for higher RevPAR and stronger profitability. Revenue grew 95% YoY, while pre-tax earnings nearly tripled to ₹205 crore. Despite occupancy dipping to 67% as new rooms opened, pricing power remained robust, with average room rates rising 16% to ₹12,170. High depreciation and interest costs reflect peak capex cycle leverage. - Capex and Expansion Strategy Significant development costs for Athiva have already been incurred, reducing execution risk. Chalet’s ability to scale Athiva quickly will be critical in sustaining growth momentum and diversifying revenue streams beyond franchise partnerships. At 18x FY27E EV/EBITDA, Chalet trades at a premium but offers upside if capacity expansion, margin sustainability, and leverage trends remain favorable. Maintaining premium positioning during this capex-heavy phase is essential for re-rating potential.