The story
A hotel company shedding its debt. A balance sheet becoming the upside argument.
FY26 closed methodically: revenue ₹1,279 crore (+12.3%), EBITDA ₹462.6 crore at 36.2% margin, A+ credit from both CRISIL and ICRA, borrowing costs at 7.9% — down from 12.5% just two years ago.
Q4 margin of 34.0% reflects two non-recurring items: a ₹14 Cr GST change and ₹26 Cr of front-loaded FF&E. Same-store EBITDA margin for the full year was 39.4%. Clean run-rate: 38%+ from FY27E.
The next leg is operational. W Hotel Hyderabad — 170 rooms in HITEC City — opens Q4 FY27, with Westin Bangalore and Navi Mumbai following through FY28E. By FY28E the portfolio reaches 5,335 rooms at 1.7× ND/EBITDA.
The deleverage the market has not priced. The operational trajectory is intact, the balance sheet is repairing faster than expected, and ROIC crosses WACC in FY28E for the first time in the company's listed history. The current valuation reflects none of this.
Q4 & FY26 full year result
FY26 closed as a beat — the Q4 margin drag was known and non-recurring.
| Metric | Value |
|---|---|
| FY26A revenue | ₹1,279 Cr (+12.3% YoY, audited) |
| FY26A EBITDA | ₹462.6 Cr (36.2% margin) |
| PBT pre-exceptional | ₹165 Cr (+106% YoY) |
| Q4 FY26 EBITDA | ₹120.2 Cr (34.0% margin) |
| Adj. EBITDA FY26A | ₹449.5 Cr (35.1%, primary metric) |
| Net debt FY26A | ₹1,448 Cr (3.1× ND/EBITDA, A+ stable) |
RevPAR: blended same-store RevPAR reached ₹5,400 in FY26A (+9.5% YoY). All three segments held 74–75% occupancy. The Hyatt Place Gurugram renovation completing in Q3 FY26 adds an occupancy tailwind in FY27E.
GIC transaction — balance sheet transformed. GIC invested ₹750 Cr for 35% of three hotel SPVs (implied SPV EV ₹2,200 Cr). ₹600 Cr was deployed immediately for debt repayment; the A+ upgrade followed. The remaining ₹150 Cr tranche is linked to Westin Bangalore capex (FY27–28).
Why 34% is not the run-rate. Q4 standalone margin reflects (1) a ₹14 Cr GST headwind in H2 FY26 (laps Q3 FY27) and (2) ₹26 Cr of front-loaded FF&E prepayment. Ex-both, Q4 margin was ~40%+. Management guides a clean FY27E EBITDA margin of 38% ex-GST.
| Metric | Value |
|---|---|
| DTA recognised FY26A | ₹342 Cr (non-cash) |
| Blended RevPAR FY26A | ₹5,400 (+9.5% YoY same-store) |
| GST drag FY27E | ₹28 Cr (laps Q3 FY27) |
Front Wave view — Q4 summary. FY26A closed as a clean beat on revenue (+₹41 Cr vs prior estimate) and PBT (+106% YoY). The 34% Q4 margin reflects two specific, non-recurring items. Same-store margin of 39.4% for the full year is the correct run-rate reference.
Why we own it
Deleverage. Operating leverage. Zero-capex expansion. Three forces compounding.
