Chalet Hotels Ltd.

Incorporated in 1986, Mumbai based Chalet Hotels Limited is a company engaged in the business of owning, developing and asset management of high-end hotels in major metro cities across India. It is a part of K. Raheja Corp group which is a leading business group in the country.The company's hotels are currently branded with global hospitality brands such as JW Marriott, Westin, Marriott, Marriott Executive Apartments etc. Its hotel platform includes 5 operating hotels located in the Mumbai Metropolitan Region, Hyderabad and Bengaluru.The total revenue of the company was Rs 9,295.14 million for 2018, and the total revenue grew at a CAGR of 14.83% between 2014 and 2018. Chalet Hotels Key HighlightsInternational tie-ups with Marriott and relationships. The Chalet Hotels was the first partner in India for Marriott 20 yrs ago.Locations of the cities and location within micro-cityActive asset manager modelEBITDA CAGR double-digit growthRoCe ratio positiveValuation ratios comparable to Indian Hotels (Taj) in terms of Price to Book Value or EV/ EBITDA and P/E lower than that of Lemon TreeDemand (FY18-22: 12%) growth outpacing supply growth (FY18-22: 7%)Occupancies have reached 75% for Chalet portfolio - ARR growth to followChalet EBIDTA (FY18) at 41% Vs industry (All India 5 star Deluxe Average) is at 34%Highest return on capital - Lower per room construction costJW Sahar built at Rs 1.4 Crs per key (1,100 sq ft per key)Most hotels are built at the higher cost (average of 1,500 - 2,000 sq ft per key)Renovation cost of Rs 15 lacs per key at Renaissance Vs others at over Rs 1 cr per keyConsolidated land spend Rs 208 crs vs others much higherReturns to key investors:HDFC returns (1999 - 2012) - IRR 14.46%IDFC returns (2012 - 2015) - IRR 12.73%Shoppers stop returns: (Since IPO) - 7.9%Annualized EBIDTAFY20 - Rs 500 CrsFY22 - Rs 700 Crs Competitive Strengths of the Company1. Luxury upscale properties located in major metro cities2. Part of K. Raheja Corp group3. An active asset management model