Q1 2027 Apeejay Surrendra Park Hotels Ltd Earnings Call Transcript
Key Points
- Achieved industry-leading occupancy of 92% and maintained RevPAR leadership in the upper upscale segment despite market headwinds.
- Operating revenue grew 8% YoY to INR167 crore, with consolidated revenue up 10% and EBITDA up 8%.
- Strong sales momentum at EM Bypass project with 33 of 69 apartments sold, generating INR70-80 crore cash flow and improving balance sheet.
- Flurys brand expansion on track with 111 outlets and plans to reach 140 by year-end, including entry into Delhi NCR and potential large-scale deals with Phoenix Mills, DLF, and PVR.
- Healthy balance sheet with low debt-to-equity ratio of 0.12 and net debt-to-EBITDA of 0.7, supporting future growth initiatives.
- Robust development pipeline with 12 hotels (472 keys) expected in FY27, and long-term plan to double hotel count to 87 by 2030.
- Favorable tax regime shift expected to reduce tax rate from 35% to 25%, improving future profitability.
- Strong F&B contribution at 43% of revenue, with differentiated brands and lifestyle offerings enhancing guest experience.
- Upcoming events like BRICS Summit, Aero India, and 40+ wedding dates expected to drive ADR growth in subsequent quarters.
- Pune FSI increase from 2.5 lakh to 6.7 lakh sq ft adds significant value, enabling mixed-use development and higher ROCE.
- PAT declined 14% YoY to INR12 crore due to higher finance costs and deferred tax provision.
- ADR growth was subdued at only 2% due to West Asia crisis, flat air traffic, and supply chain disruptions.
- International air traffic into India declined 10% during the quarter, impacting demand in key markets.
- High energy costs and supply chain disruptions negatively affected operational performance.
- Flurys expansion has been slower than initially planned, with only 5 outlets added in Q1 and 29 more needed to meet year-end target.
- New properties like Ran Baas and Lotus Palace are still in stabilization phase, with full maturity expected only by end of FY27.
- Tax rate in Q1 was elevated at 40% due to the shift to new regime, impacting reported PAT.
- Other income sustainability is uncertain, with only INR3.5-4 crore per quarter considered recurring.
- Geopolitical tensions and air traffic decline in cities like Mumbai, Hyderabad, and Chennai pose near-term demand risks.
- CapEx requirements for expansion are substantial, with net funding needs of INR1,500 crore over the next few years, though manageable.
Ladies and gentlemen, good day, and welcome to Apeejay Surrendra Park Hotels Limited Q1 FY 2027 earnings conference call. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Shreeyut Daga from SMIFS Limited. Thank you and over to you, sir.
Thank you. Good evening everyone, and a very warm welcome to you all. My name is Shreeyut Daga from SMIFS Limited. On behalf of the company, I would like to thank you all for participating in the Apeejay Surrendra Park Hotels Earnings Call for the first quarter of FY27. We have with us the management represented by Ms.
Priya Paul, Chairperson and Executive Director; Mr. Vijay Dewan, Managing Director; and Mr. Atul Khosla, Senior Vice President, Finance and CFO. Without any further delay, I request Ms. Priya Paul to start with her opening remarks, followed by operational and financial highlights of the company.
Thank you, and over to you, ma'am.
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