SAMHI Hotels share price jumped nearly 2 percent on Friday. The stock has jumped nearly 22 percent in the last one month. The stock is looking bullish on technical charts. SAMHI Hotels Limited hosted an Earnings Conference Call with investors and analysts following a stellar FY25 performance, marking its first full year post-IPO. Management highlighted robust same-store RevPAR and revenue growth, underpinned by strategic acquisitions and a landmark partnership with GIC, Singapore’s sovereign wealth fund. The company’s focus on premium markets like Bangalore, Hyderabad, Pune, and NCR yielded strong cash flow and margin expansion. Management addressed concerns about supply pressure, F&B growth, asset recycling, and brand upgrades, projecting sustained double-digit growth and a strengthened balance sheet. The call underscored SAMHI’s readiness for accelerated growth and value creation in India’s dynamic hospitality sector.

1. Overview of FY25 Performance and Strategic Milestones

Transformational Year Post-IPO:
SAMHI Hotels Limited has concluded FY25 as a watershed year, its first full year since listing in September 2023. The company’s portfolio, anchored in Bangalore, Hyderabad, Pune, and NCR, drove a remarkable 16.5% year-on-year same-store RevPAR growth, culminating in group revenue of Rs1,150 crores, up 17.5% year-on-year. EBITDA pre-noncash ESOP stood at Rs443 crores, reflecting a 27% year-on-year increase, and the company reported its maiden full-year profit post-IPO.

Strategic Acquisitions and Expansion:
Management detailed two pivotal acquisitions: the Trinity Hotel in Whitefield, Bangalore, to be converted into a dual-branded Westin and Tribute property with 362 rooms, and a long-term variable lease in Hi-tech City, Hyderabad, for a 170-room W-branded hotel. These moves are expected to add significant revenue—Rs180–200 crores from Bangalore and Rs100 crores from Hyderabad—bolstering the company’s growth trajectory.

Institutional Partnership with GIC:
The partnership with GIC, Singapore’s sovereign wealth fund, is a cornerstone of SAMHI’s strategy. GIC has committed Rs750 crores, of which Rs580 crores has already been received. This infusion strengthens the balance sheet, reduces net debt-to-EBITDA to 3.2x, and provides Rs150 crores in capex funding for the Westin-Tribute project. The alliance positions SAMHI for accelerated growth and enhanced institutional credibility.

2. Financial Performance: Q4 and Full Year FY25

Quarterly and Annual Highlights:
For Q4 FY25, SAMHI delivered a 15.8% year-on-year topline growth on same-store assets, with EBITDA up 22%. Consolidated income reached Rs324 crores (up 12% year-on-year), while EBITDA stood at Rs131 crores (up 21% year-on-year). After noncash ESOP expenses, reported EBITDA was Rs126 crores, a 31% year-on-year increase. Profit before tax (PBT) was Rs42 crores, with profit after tax (PAT) at Rs46 crores after exceptional items.

Full-Year Financials:
Full-year revenue was Rs1,150 crores (up 18% year-on-year), with EBITDA pre-ESOP at Rs443 crores (up 27%). ESOP costs were Rs18 crores, expected to stabilize at Rs10 crores in FY26. Net debt stood at Rs1,967 crores as of March 31, 2025, with a weighted average cost of debt of 9.2%. Post-GIC infusion, net debt is approximately Rs1,430 crores, further strengthening the balance sheet.

3. Addressing Supply Pressure and Revenue Management

Analyst Concern: Occupancy vs. RevPAR Growth
Analysts questioned whether peaking occupancies in mid-scale segments signal supply pressure. Management responded that strong RevPAR growth—driven by rate rather than volume—demonstrates no supply stress. The focus on yield management ensures profitability, with room revenue outpacing F&B and other income, reflecting robust demand in core markets.

RevPAR Outpacing Total Revenue Growth
While portfolio RevPAR grew 18% year-on-year, total revenue increased by only 14%. Management clarified that this divergence is due to muted F&B growth (6.6% year-on-year in Q4), which is expected to improve as ballroom renovations in Sheraton Hyderabad and Hyatt Regency Pune are completed in H2 FY26. The company anticipates F&B growth to narrow the gap with room revenue over time.

4. Asset Recycling and Impairment Reversals

Chennai Hotel Sale and Asset Recycling
Management addressed confusion over the sale of the Chennai hotel, clarifying that the sale price was Rs53 crores, but net proceeds were only Rs3 crores after settling debt. The transaction involved writing off goodwill, but future asset sales are not expected to result in similar accounting losses.

Impairment Reversals
The company has provisioned for impairments, including a Rs76 crore write-off related to Navi Mumbai land litigation. Management is in constructive dialogue with MIDC and expects a full reversal if a favorable order is received. Additionally, there is Rs138 crores of potential impairment reversals, including provisions made during COVID, which may be reversed as performance strengthens.

5. ACIC Portfolio Performance and Brand Upgrades

ACIC Portfolio: Margins and RevPAR
The ACIC portfolio has crossed a 40% milestone in cost management. While margins are converging, RevPAR lags behind same-store assets due to pending renovations in Pune and Jaipur. For assets not under renovation, Q4 saw 13% revenue and RevPAR growth. Management expects deferred income growth for assets undergoing rebranding, with Pune and Jaipur set for conversion to Courtyard by Marriott and Tribute, respectively.

Brand Upgrade Expectations
Management projects a 20–25% revenue uplift from the Four Points Pune to Courtyard conversion, and a 30%+ increase for Jaipur, where the asset is underperforming. These upgrades are expected to drive significant RevPAR and total revenue growth in FY26 and beyond.

6. Market Dynamics and Growth Outlook

Bangalore and Hyderabad: Demand vs. Supply
Bangalore continues to see robust demand, with Q4 RevPAR growth of 40% year-on-year and full-year growth of 22.8%. Management attributes this to micro-market dynamics and strong absorption in key precincts. Hyderabad, while currently trading at a discount to Bangalore, is expected to narrow the gap as demand accelerates.

Growth Pipeline and Capex
SAMHI has a clear pipeline of actionable opportunities in core markets. The company plans Rs175–200 crores of capex in FY26, with Rs50 crores funded by GIC for the Bangalore asset. The balance will be financed from internal cash flows, supporting both growth and deleveraging.

7. Margin Profile and Cash Flow Generation

EBITDA Margin Expansion
Q4 EBITDA margins reached 43% at the asset level, with net corporate G&A at 40.5%. Management expects this margin profile to sustain over the next 4–6 quarters, supported by strong room revenue and cost control.

Cash Flow and Deleveraging
With Rs443 crores of cash EBITDA pre-ESOP and Rs143 crores of cash interest expense, SAMHI generated Rs298 crores of free cash before capex in FY25. Management projects Rs360 crores of free cash in FY26, with Rs125–150 crores earmarked for growth capex and Rs20 crores for maintenance. The surplus will be used for further deleveraging or growth initiatives.

8. GIC Co-Investment and Joint Venture Structure

GIC’s Role in Growth Projects
GIC’s co-investment is focused on the Westin-Tribute Bangalore project, with Rs150 crores committed for a 35% stake. Subsequent capex will be shared 65:35 between SAMHI and GIC. Other growth projects, such as the W Hyderabad and Four Points conversions, will be funded from internal cash flows.

Joint Venture Performance
The three subsidiaries in the JV have trailing EBITDA of Rs140 crores and net debt of Rs150–160 crores. Management expects strong free cash flow from these assets to fund future capex requirements.

9. Recent Market Trends and Revenue Impact

April–May Performance
April was exceptionally strong, while May saw flattish revenue growth due to temporary disruptions. However, the quarter is expected to maintain reasonable growth, reflecting the resilience of SAMHI’s portfolio.

10. Management’s Closing Remarks

Vision for the Future:
Management expressed pride in SAMHI’s 14-year journey and its transformation into an industry-leading platform. The company is poised for the next phase of growth, leveraging a strengthened balance sheet, strategic partnerships, and a robust pipeline. Management remains committed to delivering sustainable, double-digit growth and creating long-term value for shareholders.

Key Takeaways Table

Bottomline for Long Term Investors

SAMHI Hotels Limited’s Q4 FY25 Earnings Conference Call underscored a year of transformation, marked by robust financial performance, strategic acquisitions, and a landmark partnership with GIC. Management addressed investor concerns with clarity, emphasizing sustainable growth, margin expansion, and a clear path to deleveraging. The company’s focus on premium markets, brand upgrades, and disciplined capital allocation positions it well for continued leadership in India’s hospitality sector