Park Hotels Charts Robust Growth and Margin Expansion

Ashwin Thakker

— 2 min read

Apeejay Surrendra Park Hotels (ASPHL) marked an exceptional Q1 FY26, delivering its best-ever performance and setting robust momentum. The company’s forward-looking statements highlight strategic expansion, operational efficiency, and a clear path to enhanced profitability across its diverse hospitality portfolio. This analysis covers ASPHL’s ambitious guidance for sales growth, margin improvements, and key initiatives, including significant acquisitions and the rapid expansion of its Flurys business.

Key Facts on Outlook:

  • FY26 Sales & Expansion: Anticipates adding 600 new rooms, achieving 2,983 keys across 50 hotels by 2025.
  • Acquisition Impact: Mumbai hotel (Zillion Hotels) projected INR 60-80 crore revenue with 40-50% EBITDA margin in stabilized year (FY28).
  • Resort Acquisitions: Kochi/Vembanad properties acquired for INR 62 crore, targeting INR 20 crore peak revenue.
  • Flurys Sales Growth: Aiming for INR 85-90 crore revenue in FY26, with individual outlet revenue goal of INR 1 crore/store by next year.
  • Flurys Margin Outlook: Expects 12-15% EBITDA margin for Flurys business post-stabilization of 200 outlets.
  • Capital Expenditure: Plans INR 300 crore capital outlay for FY26, part of INR 1,700 crore over next 5 years, funded primarily by internal accruals.

Driving Hotel Portfolio Expansion

Apeejay Surrendra Park Hotels is aggressively expanding its hotel footprint. The company projects adding close to 600 rooms in FY26, aiming for 2,983 keys across 50 hotels by 2025. A significant move is the 90% stake acquisition in Zillion Hotels, Mumbai, for INR 206 crore. Post-refurbishment, this 80-room luxury hotel is expected to generate INR 60-80 crore revenue with a 40-50% EBITDA margin in its stabilized year, FY28. Additionally, the acquisition of Malabar House and Purity for INR 62 crore further strengthens its luxury resort segment, anticipating INR 20 crore peak revenue.

Flurys Fuels Margin Expansion

The company's confectionery brand, Flurys, is a key growth driver, with a reported 42% topline growth in Q1. Flurys targets INR 85-90 crore revenue in FY26 and aims for 200 stores by FY27, expanding to 350-400 by FY30. Management expects each Flurys outlet to generate INR 1 crore revenue annually by next year, leading to a projected 12-15% EBITDA margin for the segment post-stabilization. To support this robust growth, ASPHL plans a total capital outlay of INR 1,700 crore over five years, with approximately INR 300 crore earmarked for FY26, predominantly funded through internal accruals.

Apeejay Surrendra Park Hotels is strategically positioned for sustained growth, leveraging its expanding hotel portfolio and the high-growth Flurys brand. The focus on new property acquisitions and an aggressive store rollout plan, coupled with disciplined capital allocation, underpins a clear pathway to enhanced revenues and profitability. The management's outlook reinforces confidence in capitalizing on India's booming tourism and retail sectors for long-term stakeholder value.

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