Brigade Hotel Ventures: healthy launch pipeline of nine hotels of around~1,700 keys

 

  • Brigade Hotel Ventures: healthy launch pipeline of nine hotels of around~1,700 keys



  • Strong promoter profile with long track record in real estate business
  • –BHVL is a wholly-owned subsidiary of BEL (rated [ICRA]AA(Stable)/A1+), which is one of the leading real estate players in South India. 
  • BEL has established itself as one of the major diversified real estate developers in Bengaluru, generating revenue from three segments –sale of residential and commercial real estate projects, lease income from the owned commercial property (office and retail) and income from  hospitality  projects.  
  • The hospitality  segment  remains  one  of  the  key  strategic  operating  divisions  of  the  Brigade Group.
  • Healthy  operating  performance
  • –On  consolidated  level,  BHVL  has  nine  operational  hotels with  1,604  keys  across Bengaluru, Mysuru, Kochi, Ahmedabad and Chennai. 
  • The occupancy levels of the hotels improved to 77% in FY2025 (PY: 72%),driven by sustained industry demand. Further, the RevPAR grew by 11% to Rs. 5,138.2 (PY: Rs. 4,624.1) owing to improvement in occupancy levels and average room rate (ARR). The consolidated revenue improved by 16% to Rs. 468.6 crore in FY2025 and is expected to grow marginally in FY2026 with operating margins of around 34-36%.
  • Improvement in leverage and coverage metrics supported by IPO proceeds 
  • –The company raised Rs. 885.6 crore as a part of its IPO in July 2025.Subsequently, it has prepaid/repaid about Rs. 468.1 crore of its external debt inAugust2025. 
  • As a result, BHVL’s total debt is expected to decline to around Rs. 250-280 crore as of March 2026 from Rs. 757.6 crore as of March 2025leading to a reduction in leverage with Total Debt/OPBIDTAestimated to be around 1.5-1.8 times as of March 2026 (PY: 4.6 times). 
  • The debt coverage metrics are likely to remain adequate during FY2026-FY2027.
  • Sizeable capex plans in medium term exposing it to execution risk 
  • –BHVL has a healthy launch pipeline of nine hotels of around~1,700 keys in the medium term, exposing it to execution risk. 
  • The total capital outlay for the next three years is expected to be around Rs. 1,500-1,600 crore, which would be primarily funded by a mix of debt and internal accruals. 
  • However, the execution risk is mitigated by strong parentage of Brigade Hotel Ventures Limited (BHVL), and the Group’s established track record in the hospitality sector.Despite the debt-funded capex plans, the leverage is likelyto remain adequate in FY2026 and FY2027. 
  • Cyclical industry dependent on discretionary spend; vulnerable to general economic slowdown and exogenous shocks 
  • –The  hotel  industry  is  significantly  exposed  to  macro-economic  conditions,  inflation  level,  tourist  arrival  growth,  etc, which  lead  to  an  inherent  cyclicality.  
  • The  industry  is  exposed  to  several  exogenous  shocks  such  as  geopolitical  crisis, terrorist attacks, disease outbreaks, etc. 

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