Ventive Hospitality India growth offsets Maldives cost headwinds as expansion pipeline builds

Investment View and Valuation

Motilal Oswal Financial Services (MOFSL) retained its Buy rating on Ventive Hospitality with a target price of Rs 750, despite the company’s first-quarter FY27 operating performance falling below the broker’s expectations. The investment case is supported by rapid multi-city expansion, infrastructure-led demand, constrained hotel supply in key markets such as Pune, diversification into membership-led hospitality through Soho House, high-ARR Maldives assets and a development pipeline of more than 1,700 keys across eight hotels.

The target price is based on a FY28E sum-of-the-parts valuation, applying 17 times EV/EBITDA to Indian Hospitality, 11 times EV/EBITDA to International Hospitality and an 8% cap rate to annuity EBITDA.

Q1 FY27 Financial Performance

Ventive Hospitality reported consolidated revenue growth of 7% year-on-year to Rs 5.4 billion in Q1 FY27, broadly in line with MOFSL’s estimate. India Hospitality revenue increased 13% year-on-year to Rs 2.0 billion, International Hospitality revenue rose 5% to Rs 2.1 billion and annuity revenue increased 3% to Rs 1.3 billion.

Consolidated EBITDA declined 7% year-on-year to Rs 1.9 billion, below MOFSL’s estimate of Rs 2.2 billion. EBITDA margin contracted to 35.6% from the previous year, compared with the broker’s estimate of 40.7%, due to higher other expenses, employee costs and raw-material expenses.

India Hospitality EBITDA rose 16% year-on-year to Rs 737 million, while International Hospitality EBITDA fell 32% to Rs 324 million. Annuity EBITDA was flat at Rs 1.1 billion. Adjusted PAT increased around three times year-on-year to Rs 807 million, ahead of MOFSL’s Rs 487 million estimate, aided by a net deferred-tax credit of Rs 1.0 billion following the remeasurement of deferred tax assets and liabilities. Gross debt stood at Rs 20.9 billion and cash at Rs 5.8 billion at the end of Q1 FY27.

Operating Metrics

India Demand and Renewable-Energy Initiatives

Management indicated that Pune’s GCC-led office growth, limited luxury-hotel supply and office-addition pipeline should support demand and pricing. Ventive Hospitality has around 65% of Pune’s luxury hotel inventory.

The company is investing roughly Rs 600 million in captive solar capacity. The initiative is expected to increase green-power use to around 85% by Q1 FY28, reduce electricity costs by 45% and improve margins by around 5–6%.

Maldives Outlook and Cost Headwinds

In the Maldives, elevated diesel prices following the West Asia crisis temporarily doubled fuel costs compared with pre-crisis levels. Management expects earnings recovery in the second half of FY27 as fuel prices normalise. Excluding the fuel impact, Maldives EBITDA would have grown around 10%.

Ventive Hospitality is adding 4.1 MW of solar capacity across its Maldives portfolio. The capacity is expected to deliver annual savings of around USD 1.5–2.0 million from FY28–29.

Luxury Wellness Expansion

Ventive Hospitality has entered luxury wellness through the acquisition of Kelzai Eco Reserves. The asset comprises more than 420 acres, an 80-plus-key Ritz-Carlton Reserve resort and 33 premium villas.

The project will be funded through internal accruals and debt. Proceeds from villa sales are expected to reduce the acquisition cost and improve long-term returns.

Estimates and Growth Outlook

MOFSL reduced its FY27 EBITDA estimate by 2% and FY28 EBITDA estimate by 7%, primarily because the commencement of the 73-key Ritz-Carlton Reserve, Pottuvil, Sri Lanka has been delayed.

The broker forecasts FY26–28E revenue, EBITDA and adjusted PAT compound annual growth rates of 15%, 13% and 17%, respectively. The development pipeline comprises more than 1,700 keys across eight hotels, supporting the company’s multi-city expansion strategy.

Key Risks

• Continued international fuel-cost pressure.
• Slower recovery in the Maldives.
• Lower occupancy levels.
• Delays in commissioning new hotel projects, including the delayed Ritz-Carlton Reserve, Pottuvil, Sri Lanka.