Chalet Hotels (CHALET IN) (Neutral) - Fine tune TP to INR890

Research evidence excerpt

Chalet Hotels (CHALET IN) (Neutral) - Fine tune TP to INR890

Global Markets Research

Chalet Hotels CHAL.NS CHALET IN 17 May 2026

EQUITY: PROPERTY

RatingFine tune TP to INR890 Remains Neutral

Target price

Increased fromLower than expected disruption from the war INR 890 INR 860

Action: Fine tune TP to INR890; maintain Neutral Closing15 May 2026price INR 785

We raise our FY27F/28F EBITDA estimates by 4%/1% on better-than-expected performance of

the hotel segment in 4QFY26 (REVPAR growth of -3% vs our estimate of -7%). We maintain our Implied upside +13.4%

Neutral rating as we believe: 1) investors should monitor Chalet’s occupancy ramp-up, as ~30%

of its portfolio is impacted by the ongoing peripheral construction or renovation/stabilization, and Market Cap (USD mn) 1,790.7

we expect this to smoothen over FY27-28F; and 2) we await on-time delivery of hotels as per ADT (USD mn) 1.3

committed timelines (vs delays previously). Our higher SOTP-based TP of INR890 is owing to

18x FY28F EV/EBITDA for the hotel segment (Fig.12). The stock trades at 15x FY28F Relative performance chart

EV/EBITDA. We prefer Leela Hotels (LEELA IN, Buy)

Expect 1QFY27F revenue growth in mid- single digit (vs flat previously)

March was impacted by geopolitical tensions and foreign tourist cancellations, leading to

temporary weakness in demand, particularly from international travelers, as per management.

However, domestic demand remained resilient, supported by strong business, leisure, wedding,

and corporate travel trends. Management highlighted that trends improved quickly thereafter, with

April performing better than expected, May being “really strong,” and June stable. Overall, the

company delivered a 4% revenue growth in 4QFY26 (despite REVPAR -3% y-y), We now