ROHLTD

Leverages ARR Upside and Asset-Light Expansion Strategy

posted a mixed Q2FY26, with revenue growth driven by higher room rates and key additions, but profitability impacted by pre-opening costs and lease-related expenses from its new Iconiqa Mumbai property. With aggressive expansion plans and a favourable industry cycle, ROHL remains well-positioned for long-term growth. Revenue rose 12% YoY, supported by a 7% increase in average room rates and a 30% rise in key count. However, occupancy at joint, leased, and owned properties fell 300 bps YoY due to heavy rains in North India and a Goa slowdown. Iconiqa Mumbai, a 25-year leasehold property near the airport, commenced operations in late September. ROHL booked a ₹2 crore EBITDA loss due to pre-opening expenses. Depreciation and interest costs rose sharply (₹6.35 crore), leading to a 43% YoY decline in net profit. - Asset-Light Expansion and Revenue-Share Strategy ROHL plans to triple inventory to 22,000 keys by 2030, with 2,500 keys already in the pipeline. It is negotiating five new properties (Gurgaon, Lucknow, Goa) under revenue-share terms and expanding via franchisee/management contracts to boost fee-based income. Management expects ₹50 crore in H2FY26 revenue from Iconiqa and ₹100 crore in FY27, contributing ~20% of total revenue. Despite RoCE pressure from lease accounting, ROIC remains strong due to low upfront investment and efficient asset deployment. With delayed capacity additions across the sector, ARR growth is expected to sustain. ROHL’s diversified sub-brand strategy and focus on spiritual tourism and infrastructure-led demand support long-term visibility. At 11x FY27 EV/EBITDA, the stock offers attractive upside.