Chalet Hotels Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW & OUTLOOK

The global economy in FY 2025-26 went through a challenging phase, initially marked by escalating trade tensions and tariff actions, followed by the West Asia war, significantly heightening geopolitical uncertainty. These developments triggered volatility across oil and commodity markets, firmed up inflation expectations, currency movements, and tightened financial conditions, testing the resilience observed in the earlier part of the year.

The International Monetary Fund in April 2026 projected global growth at 3.1% for CY 2026 and 3.2% for CY 2027, under the assumption of a contained conflict scenario. These projections are modestly lower than recent outcomes and remain well below pre-pandemic averages, reflecting a structurally slower growth trajectory. Inflation, which was expected to ease steadily, is now anticipated to rise in CY 2026 before resuming its decline in CY 2027, driven largely by energy price volatility and supply-side disruptions, with pressures more pronounced across emerging markets and developing economies. Geopolitics has re-emerged as a central macroeconomic variable, with disruptions around critical trade routes such as the Strait of Hormuz, thereby impacting energy markets and global supply chains. A prolonged escalation could further elevate input costs, disrupt trade flows, travel routes, and weigh on global growth.

While the global economic environment is likely to remain highly sensitive to geopolitical developments, demand dynamics along with policy support may offer some stability. On the other hand, growth is expected to be impacted by persistent supply-side risks, elevated energy prices, and tighter financial conditions. Businesses and investors will continue to operate amid heightened volatility, with a sharper focus on resilience, disciplined capital allocation, and supply chain diversification.

Indian Economic Overview & Outlook

In FY 2025-26, the Indian economy stood the test of a challenging global backdrop characterised by heightened geopolitical tensions, volatile oil and commodity markets, and tightening financial conditions. The economy remained resilient on the back of strong domestic fundamentals, prudent macroeconomic management, and sustained policy support, enabling India to navigate external headwinds more effectively than several peers. Consequently, India continued to be one of the fastest-growing major economies globally, with growth anchored in private consumption, public capital expenditure, and a robust services sector. Reflecting this relative strength, the International Monetary Fund reaffirmed confidence in Indias outlook, projecting economic growth of ~6.5% in CY 2026, emphasising the strength of Indias medium-term growth trajectory.

In addition to global headwinds, the domestic operating environment during FY 2025-26 was further impacted by Operation Sindoor and intermittent disruptions within the aviation ecosystem leading to short-term uncertainty in travel sentiment and temporary volatility in passenger movement across select routes. While the macroeconomic impact remained contained, mobility-linked sectors experienced periodic softness during affected periods. Swift normalisation and stronger domestic demand helped limit broader spill-over effects.

Against this backdrop, inflation remained well contained through the financial year, providing a key pillar of macroeconomic stability, supported by favourable food price dynamics, adequate agricultural output, and stable core inflation. While inflation is expected to firm modestly during the

FY 2026-27 due to base effects, underlying price pressures will likely remain muted. The Reserve Bank of India (RBI) identified energy price volatility, geopolitical developments, and climate-related disruptions as key upside risks to the inflation outlook.

Indias Monetary Policy remained measured and vigilant. The Monetary Policy Committee maintained the key policy repo rate at 5.25% holding its neutral stance, emphasising flexibility amid evolving global developments. Domestic financial conditions remained supportive, characterised by healthy credit growth, strong banking sector balance sheets, and adequate system liquidity, thereby providing a conducive environment for investment and consumption.

Foreign Direct Investment (FDI) trends further reinforced confidence in Indias economic fundamentals. During FY 2025- 26, FDI equity inflows rose 17% year-on-year to US$94.5 billion, despite persistent geopolitical disruptions, volatile commodity markets, and a prolonged period of elevated global interest rates. The broad-based nature of capital inflows, led by services, technology, and infrastructure-linked sectors, highlights Indias continued appeal as a preferred destination for long-term investment amid global uncertainty.

From an external sector perspective, Indias position remained comfortable, supported by robust services exports and foreign exchange reserves. However, RBI cautioned that prolonged geopolitical instability in West Asia, elevated crude oil prices, and volatile global capital flows could pose risks to growth and inflation dynamics. The central bank reiterated its commitment to a market-determined exchange rate, intervening only to manage excessive volatility.

India is well positioned to sustain its growth momentum, supported by strong domestic demand, ongoing infrastructure investment, and a favourable policy environment. While external headwinds, particularly geopolitical tensions, energy price volatility, and global financial tightening may pose near- term challenges, Indias macroeconomic stability and structural growth drivers are expected to provide resilience. Continued policy focus on capital expenditure, supply-side reforms, and investment facilitation will be critical in sustaining medium- term growth and reinforcing Indias position as a key driver of global economic expansion.

Global Hospitality Industry

The global hospitality industry outlook for CY 2026 remains cautiously positive, supported by sustained leisure demand, recovery in international travel, and a gradual improvement in business travel. However, the environment remains challenging, with continuing geopolitical uncertainties, elevated inflation, and tighter financial conditions potentially impacting discretionary spending.

According to UN Tourisms World Tourism Barometer (January 2026), international tourist arrivals reached a record 1.52 billion in CY 2025, a 4% year-on-year growth and confirming a return to pre-pandemic growth trajectories. Travel demand remained robust despite inflationary pressures and geopolitical uncertainty, supported by improved air connectivity, visa facilitation, and the recovery of large outbound markets.

Globally, tourism saw steady recovery and normalisation of international tourist arrivals over the post-pandemic period. Europe and the Middle East have surpassed or materially exceeded their pre-pandemic benchmarks, while Asia-Pacific continues its phased recovery, driven by the reopening of large source markets, improving air connectivity, and rising intra-regional travel.

UN Tourism data suggests that Asia-Pacific recorded approximately 331 million international arrivals in CY 2025, growing 6% year-on-year and reaching approximately 91% of pre-pandemic levels. Key markets including Japan, Indonesia, Thailand, Vietnam, and India reported strengthening inbound travel, supported by expanding air capacity, regional mobility, and rising mid-income group demand. Asia-Pacific is also expected to lead global air passenger growth in 2026, with traffic projected to increase by over 7%, materially above the global average. This recovery could be affected by the West Asia geopolitical headwinds that begun in February 2026. March 2026 witnessed significantly lower air passenger traffic during the heightened turmoil. While the tension has started to ease-off in April 2026, complete normalcy might take longer. Reflecting these demand trends, JLLs Global Hotel Investment Outlook 2026 highlights a clear inflection point in hospitality investment activity. Global hotel transaction volumes increased by 22% in CY 2025 relative to the CY 2023 trough, signalling the deepening of a new investment cycle. While performance remains uneven across regions, underlying fundamentals are increasingly constructive, particularly in markets with strong domestic and intra-regional travel flows.

Constrained supply growth continues to support global hotel performance, with development pipelines in major markets below historical averages, aiding occupancy and pricing resilience. However, amid elevated geopolitical uncertainty, RevPAR growth is likely to moderate, as pressure on global travel sentiment and pricing power tempers performance, despite support from domestic demand and asset quality differentiation.

Capital market conditions have also improved meaningfully with strengthening debt availability, record levels of undeployed equity capital, and renewed institutional appetite for hospitality assets as key drivers of continued transaction activity in CY 2026. Hotels accounted for approximately 8% of global commercial real estate investment volumes in CY 2025, exceedingly long-term averages and underlining the sectors regained strategic relevance.

Investor preferences globally and increasingly across Asia-Pacific are converging around high-quality assets in prime locations, including luxury and lifestyle-oriented hotels, well-located urban properties, and experience-led destinations. At the same time, increasing performance dispersion is reinforcing disciplined capital allocation, with emphasis on brand strength, operational efficiency, and asset-specific fundamentals.

While beginning of the CY 2026 witnessed short-term impact due to West Asia war, over the next 3-5 years, the global hospitality industry is expected to move into a stable, structurally driven growth phase, supported by rising travel demand, expanding mid-income group consumption, particularly in Asia-Pacific, and growth in premium, luxury and experiential segments. International travel is likely to exceed pre-pandemic levels, with disciplined supply supporting occupancy and pricing. Performance will increasingly hinge on asset quality, brand strength, and location, while cost pressures, labour constraints, and sustainability needs will keep the focus on operational efficiency and differentiated experiences.

Indian Hospitality Industry

The Indian hospitality industry is transitioning into a more stable, structurally aligned growth phase after several years of strong post-pandemic recovery. While momentum has moderated from recent highs, fundamentals remain supported by robust domestic demand, disciplined capacity addition, and improving connectivity. As per ICRA report, chain hotel demand is expected to grow at CAGR of 10.5% against supply CAGR of 9.1%, implying a sustained demand-supply gap. Demand is underpinned by a broad mix of segments — business travel, leisure, MICE, weddings, pilgrimages, and government/ corporate delegations — supported by a growing economy, expanding travel infrastructure, new convention centres, and wider airline connectivity. Structural demographic shifts are reinforcing this: urbanisation has risen from 28% (CY01) to 37% (CY24, est.), though still well below the US (84%), UK (85%), and China (67%). Indias middle class is projected to grow from 31% of population (FY21) to 61% by FY47, while a young population base (371 million aged 15-29 in CY21) is expected to sustain discretionary spending on travel and lifestyle through CY2055.

Domestic tourism remains the dominant growth engine, with visitors projected to reach ~5 billion by CY2030 and ~15 billion by CY2047. Recovery has been anchored by leisure, staycations, and wedding/MICE demand, lifting weekend and off-season occupancies. Expanding hotel supply into religious and emerging destinations, combined with improving connectivity, is widening the domestic catchment. The rupees 15% depreciation against the USD over three years has also made domestic travel comparatively more cost-competitive than outbound trips.

Inbound tourism is still normalising. Per the Ministry of Tourisms Annual Tourism Snapshot 2025 (Provisional), India recorded ~90.2 lakh Foreign Tourist Arrivals in CY2025 — a moderation over the prior year, though FTAs excluding Bangladesh rose ~4%. Recovery remains uneven across source markets, with FTAs still below pre-pandemic peaks and sensitive to global developments (e.g., the West Asia conflicts impact from March 2026). Rupee depreciation, however, continues to support domestic industry pricing power.

Corporate travel, aided by Global Capability Centres, remains a strong tailwind. NASSCOM estimates 3,728 GCC units employing ~2.4 million professionals, concentrated in Bengaluru, Hyderabad, Pune, and NCR. This drives sustained inter-city mobility, leadership visits, and events — with these three cities posting the highest RevPAR growth in FY26. Structural under-penetration persists across Indian metros. Delhi NCR and Mumbai offer fewer than 1,400 hotel rooms per million population — materially below global peers. Given the hotel sectors high correlation with aviation, similar gaps appear there: Delhi Airports ~79 million CY2025 passengers rival hubs like Singapore, yet room density per passenger remains less than half. Bengaluru, despite having the largest Grade-A office stock among 10 major Asian cities, has the lowest hotel-room density relative to that stock — while Delhi NCR and Mumbais density is a third of peer Jakartas, despite Jakarta having half their office stock. This points to sustained under-accommodation of core business travel demand. Recent trends corroborate this outlook. ICRAs March 2026 sector update notes pan-India premium hotel occupancy is expected to hold at 72-74% through FY 2026-27, with RevPAR rising from ?5,600-5,900 (FY 2024-25) to ?5,900-6,300 (FY 2025-26) and further to ?6,200-6,500 (FY 2026-27) — supported by major demand events such as the ICC Mens T20 World Cup and the AI Impact Summit, alongside continued lag in premium supply additions.

To summarise, while short-term shocks (geopolitical events, flight disruptions) will cause transitory volatility, medium-to- long-term demand drivers remain intact. Supply continues to be constrained by high development costs, land scarcity, and lengthy approvals. With demand outpacing new inventory, occupancy, ARR, and RevPAR should stay healthy over the next 2-3 years.

Accelerating Tourism Through Policy and Infrastructure / Policy-Led Infrastructure Development Supporting Tourism Expansion

Tourism growth in India continues to be supported by a coordinated policy framework and sustained infrastructure investment, aimed at improving destination readiness, connectivity, and visitor experience across regions. In recent years, government initiatives have increasingly shifted from circuit-based tourism development toward a destination-centric and sustainability-led approach, with an emphasis on long-term capacity creation rather than short-term demand stimulation.

A key policy instrument in this transition is the revamped Swadesh Darshan 2.0 scheme, which focuses on developing sustainable and responsible tourism destinations through integrated planning and stakeholder participation. As of recent updates, projects have been sanctioned under Swadesh Darshan 2.0, Challenge-Based Destination Development (CBDD), and the Special Assistance to States for Capital Investment (SASCI), covering a wide range of themes including heritage, spiritual, coastal, eco-tourism, and wellness destinations. Collectively, these initiatives aim to strengthen core tourism infrastructure, enhance last-mile connectivity, and improve visitor amenities, particularly in emerging and under-penetrated destinations.

Infrastructure development has been further supported by investments in air and regional connectivity, which remain critical enablers for tourism dispersal. Under the UDAN (Ude Desh ka Aam Nagrik) scheme, tourism-focused regional routes have been introduced to improve access to key locations. Alongside this, continued capacity expansion across airports and improvements in aviation infrastructure are expected to support higher passenger throughput and facilitate travel to non-metro destinations.

The Union Budget presented in February 2026 further reinforced the policy emphasis on infrastructure-led tourism development. Budgetary measures continued to prioritise destination development in coordination with state governments, improvements in transport and logistics infrastructure, and an enabling framework for private sector participation across the tourism value chain. The policy thrust also reiterated support for tourism and accommodation-related infrastructure within harmonised frameworks, alongside targeted interventions aimed at improving destination readiness and visitor facilities. Also, the budget announced seven new high-speed rail ("bullet train”) corridors aimed at enhancing inter-city connectivity and functioning as economic "growth connectors”. These projects, highlighting Indias focus on sustainable, rapid transit, prioritize major urban hubs across western, southern, and northern India. Together, these measures are intended to support capital formation, improve financing access, and facilitate more balanced and regionally diversified tourism development over the medium term. Overall, the policy and infrastructure environment reflects a measured and long-term approach to tourism growth, focused on sustainability, connectivity, and destination quality. While the pace of impact from these initiatives is expected to vary across regions, continued public investment and policy support are likely to play an important role in shaping tourism demand patterns and supporting the hospitality sector over the medium term.

Risks and Challenges

The Company operates in a dynamic and evolving business environment involving multiple internal and external factors. The Management continuously identifies, evaluates and monitors key risks and challenges and adopts a structured risk management approach, supported by robust internal controls and mitigation strategies.

• Geopolitical and Macroeconomic Uncertainty: Global geopolitical developments, trade disruptions, and economic volatility may impact travel sentiment, international mobility, and discretionary spending. These factors can influence both inbound tourism and corporate travel, leading to variability in demand across markets and time periods.

• Cost Inflation and Margin Pressures: The hospitality sector remains exposed to inflation in energy, food and beverage, manpower, and maintenance costs. While pricing discipline supports revenue stability, the ability to fully pass through cost increases may be constrained in competitive or demand-sensitive markets.

• Localised Oversupply and Competition Risk: The entry of new contemporary hotel formats and alternative accommodation offerings may lead to localized oversupply in certain markets, adversely impacting occupancy levels and room rates if demand growth does not keep pace. Industry analysis, including insights from Hotelivate, indicate that in several cities the projected supply growth rates materially exceed recent demand trends, threatening short-to-medium-term pressure on operating performance in those markets.

• Sustainability and Regulatory Expectations: The hotel sector operates at the high-stakes intersection of energy consumption, land use, and community interaction. Environmental, Social, and Governance (ESG) performance is a direct driver of asset value, regulatory compliance, and revenue resilience.

Chalet Hotels Limited: A leading hospitality player

Chalet Hotels Limited (Chalet) is an owner, developer, asset manager and operator of high-end hotels and mixed-use assets in key cities and leisure locations in India. The Company has a strong parentage in form of K Raheja Group, a leading real estate developer in the country. Over the past 25+ years, the company has evolved from an asset owner to an operator and has also gained expertise in asset-management, sales and distribution. During FY 2025-26, the Company launched "Athiva”, Chalets own premium lifestyle hospitality brand - covering the entire spectrum of the hospitality value chain.

Hospitality business, focused on high-end properties

Chalet has 11 operating hospitality properties (3,389 operating keys) and a strong pipeline of 7 properties (~1,655 keys).

Chalets strong presence in hospitality is backed by:

1. Ability to identify growth markets, strong portfolio at strategic locations: Chalet has significant presence in strategic and fast growing markets in India like Mumbai - financial hub of the country with significant supply constraint; rapidly growing commercial centres like Hyderabad, Bengaluru & Pune (widespread growth in commercial office space driven by GCCs and other industries like IT, semi-conductors, automative, pharma, BFSIs and start-ups); NCR - capital of the country; key leisure locations like Rishikesh, Khandala, Udaipur

2. Ability to own and develop premium hotels: Hospitality business, especially high-end properties, involve high capex and long gestation periods along with regulatory and execution complexities. Chalet over years has demonstrated capability of developing such high-end properties in efficient and cost-effective manner. This becomes one of the very critical strengths in hospitality sector.

3. Industry-leading asset-management practices to drive margins: Over years, Chalet has adopted efficient and focussed asset management practices with talent being sourced from best of the industry players and building internal processes and expertise. This helps build flexibility in the business and reduces response time to changing industry trends apart from driving high margins.

4. Capital allocation: Proven track-record of disciplined capital allocation across assets/ projects which maximises return on capital.

5. Focused approach towards Environment, Sustainability and Governance: More on this under "Sustainability Commitment” section of MD&A.

6. Experienced leadership: Chalet has strong and independent leaders at the Board and management level both. Moreover, the Company has been investing into various initiatives to attract and retain industry best talent.

7. Strong sponsor with real-estate development background aids in cost-effective project development, ability to develop or lease mixed-use assets.

Rapid growth across parameters

Particulars	FY19	FY23	FY24	FY25	FY26
RevPAR (Rs)	6,283	6,605	7,776	8,778	9,226
ADR (Rs)	8,218	9,169	10,718	12,094	13,727
Revenue* (Rs mn)	10,348	11,780	14,370	17,541	20,741
EBITDA* (Rs mn)	3,668	5,174	6,185	7,926	9,573

Note: *Excludes Residential business.

Commercial Real Estate business enables asset sweating and provides stable annuity income

The Company has strategically diversified into related asset class of Commercial Real Estate - building Grade A commercial real estate. Chalet had significant extra FSI available at Powai and Sahar in Mumbai and Whitefield in Bengaluru. The Company has capitalised these to build Commercial Real Estate segment. The company currently has 2.4 million sq. ft. (msf) of grade A commercial real estate in the central business districts of Mumbai and Bengaluru with another 0.9 msf under development in Mumbai and 0.16 msf in Bengaluru. As of 31st March 2026, the company had occupancy level of 88% (including area committed).

The segment generates stable and significant cash flow with high EBITDA margins - monthly run rate of revenue for the month of March 2026 was ~Rs. 280 mn. For the year 2025- 26, the business reported revenue of Rs. 3,061 million with a growth of 55% YoY and EBITDA of Rs. 2,544 million with growth of 65% and margins of 83.1%.

Residential Business - Vivarea, Koramangala, Bengaluru

The Companys residential real estate portfolio comprises a single project located in Koramangala, Bengaluru with total 321 units. Phase 1 of the project, consisting of nine residential towers (153 units), has been completed. Phase 2, currently under construction, includes two residential towers comprising 168 apartments and is expected to be completed in FY 2026-27. In addition, the project includes a commercial unit with leasable area of ~160,000 sq. ft. which is intended to be leased out.

During the year, the Company handed over 152 units in Phase 1, with only one unit pending handover. Cumulatively, Phase 1 generated revenue of ?7,383 million, with an EBITDA of ?2,728 million, translating into an EBITDA margin of 36.9%. The Company has collected ?12.1 billion from this project and total receivables (excluding the commercial area) stand at ?1.5 billion as of 31st Mar26.

Phase	(msf.)	Units	Pending handover	Avg. Sale Price (? psf)
Residential - I	0.55	153	1	13,235
Residential - II	0.31	168	168	19,833
Commercial	0.16	-	-	To be leased

Chalet has strong pipeline of projects with focus on rapid growth:

Hospitality:

• Taj at Delhi International Airport (380 rooms) is under active construction and is progressing as planned, with 70 rooms targeted to be commissioned by Q4 FY27 and the balance in the subsequent quarter.

• Athiva Resort & Spa at Varca, South Goa (205 rooms) awaits local approvals and is expected to be completed by FY 2027-28

• Construction work for Ritz Carlton at Madhapur Mindspace, Hyderabad (330 rooms) has begun and is progressing through development milestones. Chalet will receive the project on warm shell basis from one of the SPVs of Mindspace Business Parks REIT by Q4 FY28 and will complete the interiors and fit-out. The launch is targeted for Q4 FY29

• The Hyatt Regency hotel at Airoli, Navi Mumbai (276 rooms) has received the requisite environmental clearance during the year. Chalet will receive the project on warm shell (from one of the SPVs of Mindspace Business Parks REIT) basis and will complete interiors and fit-out; excavation work has started for the project. The launch is targeted for Q4 FY29.

• The Athiva Resort & Spa at Bambolim, North Goa (170 rooms) is in the planning stage, with development timelines estimated at ~36 months post approvals which shall be attained post closure of the acquisition.

• The Athiva Resort & Convention Centre at Kerala (150 rooms) is under planning and evaluation, with timelines to be firmed up as approvals and project structuring progress.

• The newly acquired resort at Udaipur will undergo upgrades and shall be repositioned as upper upscale resort. The Company is evaluating expansion potential; the project is currently under design and approval stage.

Commercial Real Estate:

• CIGNUS Powai? Tower II (0.9 msf) is under construction and is progressing as scheduled, with completion expected by Q4 FY27.

• Phase II of the Koramangala, Bangalore commercial development (0.2 msf) is under construction as part of the Companys expansion of annuity office assets.

Under construction	New Rooms/Leasable area	Location	Progress update
CIGNUS Powai? Tower II	0.9 msf	Mumbai	Q4 FY27
Taj at Delhi International Airport	380 rooms	New Delhi	Q4 FY27*
Athiva Resort & Spa at Varca, South Goa	205 rooms	Goa	FY28
Ritz Carlton at Hyderabad	330 rooms	Hyderabad	Q4 FY29
Hyatt Regency at Airoli, Navi Mumbai	276 rooms	Mumbai	Q4 FY29**
Total Under Construction	1,190 rooms 0.9 msf

** Excavation started by Mindspace Business Parks REIT post the project receiving Environment Clearance

In planning	New Rooms	Location	Progress update
Premium Resort at Udaipur	144# rooms	Udaipur	To be updated#
Athiva Resort & Spa at Bambolim, North Goa	170 rooms	Goa	36 months post approval"
Athiva Resort & Convention Centre, Thiruvananthapuram	150 rooms	Kerala	-
Total In-planning	464 rooms
Grand Total	1,655 rooms 0.9 msf

* 70-rooms to be operational by Q4 FY27; balance in Q1 FY28; # Exploring expansion potential;" Approvals to be attained post closure of the acquisition

Growth philosophy:

1. Strategic locations - "Big Boxes” in key cities for Business segment, "Within Drivable Distance from Airports” for Leisure segment: Chalet focuses on "big boxes” in key cities and commercial hubs for business hotels and destinations with comfortable drivable distance of key airports. These locations provide deep market with long- term growth potential driven by the economic growth, changing consumer preferences, growing MICE and wedding markets and more. Also, supply constraints are greater in such markets owing to scarcity of land/ property, capex requirements, regulatory hurdles etc.

2. Return on Capital Employed: While Chalet does evaluate every prospective investment on financial matrices like RoCE, pay-back etc. and has set internal criteria for

each financial matrix, it also focuses on best utilisation of management time to ensure better efficiency. Thus, smaller assets or remote locations do not qualify the investment criteria. This ensures quick turnaround, better asset management control and thus higher margins.

3. Asset Sweating: Chalet focuses on optimal usage of real estate within the hotels. Hotels are carefully designed to ensure maximum usage internal and external areas and maximise revenue. Regular remodelling helps in adding additional revenue generation like new F&B outlets. Some of the F&B additions during the year include Nox at The Westin Mumbai Powai Lake, El Bar at JW Marriott Mumbai Sahar and Souk at Novotel Pune Nagar Road. Also, the Company has strategically monetised additional FSI available at hotel locations to ensure full asset sweating and extracting maximum value from the assets.

4. Strategic diversification: In FY 2000, Chalet begun its journey with business hotels in Mumbai. Over the next 10 years, its operations remained focussed on business hotels and Mumbai. Between FY 2008-09 and FY 2019- 20 it expanded its geographic presence to Hyderabad, Bengaluru and Pune, but remained business hotel focussed. Post COVID, the company forayed into leisure segment and has built a portfolio of 3 assets/ 446 keys across Khandala (near Mumbai), Faridabad (NCR) and Rishikesh, Uttarakhand. The company has also acquired a resort at Udaipur (transaction completed in May 2026) with 144-keys which will be upgraded and repositioned as a premium property. With execution of current announced pipeline, Chalet will have around two- third of keys outside Mumbai and 20%+ keys in leisure segment - a well-diversified portfolio across geography and formats.

Beginning of a new chapter with launch of "Athiva"

A key milestone during the year was the launch of ATHIVA Hotels & Resorts, the Companys own premium lifestyle hospitality brand. Athiva represents a strategic progression in Chalets operating model, from owning, managing, and operating assets to building a proprietary brand that enhances customer engagement and long-term portfolio value.

Derived from the Sanskrit word for "abundance” and "to a great extent”, ATHIVA is built on the ethos of joy, sustainability, and wellness, delivering the assurance of the expected, and the joy of the unexpected.

Designed for the rising demand for experiential, wellness led and destination driven travel from Gen Z and Millennial cohorts, the brand provides a scalable platform for growth across leisure and select urban business destinations.

Athiva made its debut with the repositioning and relaunch of The Dukes Retreat as Athiva Resort & Spa, Khandala following the operationalisation of new rooms and banquet facilities during the year. The launch leverages Chalets established capabilities across asset operations, sales and distribution, and brand stewardship.

Over the medium term, the Company plans to strengthen the brand with more hotels being launched or rebranded under Athiva Hotels & Resorts, creating a distinct growth vertical through a combination of destination resorts and standalone branded assets.

Chalet Hotels Limited: Performance and Strategic Initiatives for FY 2025-26 Strategy driven growth:

Chalet has expanded its Khandala resort from 80-keys to 147-keys and re-positioned it in the premium upper upscale segment as the resort got re-branded under Chalets own brand "Athiva Resort & Spa, Khandala”. The upgraded resort has been well-received by the target audience as reflected in positive guest feedback, increased ADRs and rising occupancy. Chalet also upgraded and rebranded its Faridabad resort from "Courtyard by Marriott Aravali Resort” to "Aravali Marriott Resort & Spa, NCR”. The resort has undergone upgrades in form of an addition of a pool bar, a club house along with a refresh of rooms and public areas.

Chalet has also undertaken renovation of its 152-keys business hotel at Vashi, Navi Mumbai. The hotel has been operational since FY 2008-09 under a franchise agreement as "Four Points By Sheraton”. The hotel is proposed to be rebranded under Chalets own brand "Athiva Hotels & Resorts”. This will be the second operational Athiva hotel and the first business hotel - marking another milestone in the Athiva journey.

Also, during the year, 8 suites were added to Bengaluru Marriott Hotel taking the total key count to 520, including 121-keys added in FY 2024-25. While the incremental inventory would require a stabilisation phase, the expansion enhances Chalets ability to capture sustained demand over time, supported by improving pricing trends and the Companys proven execution and operating track record.

In another strategic initiative during the year, Chalet entered into an arrangement to acquire a company which owns a premium land parcel in Bambolim, North Goa. This will be second asset in Goa for Chalet after one land parcel acquired at Varca, South Goa during FY 2024-25. The transaction is under due diligence stage and is expected to be completed during FY 2026-27. A luxury resort with ~170-keys is proposed to be built on this land parcel.

The Company has also announced a greenfield project in Hyderabad. This 330-key ultra luxury hotel would operate under the brand "Ritz Carlton”. The project is strategically located within the Madhapur Mindspace Business Park and offers high demand for luxury segment. Moreover, the Companys existing operational assets within the close vicinity provides additional positioning benefits.

In May 2026, the Company acquired a 144-key resort in Udaipur, Rajasthan - a leisure destination with well-established and growing market. With this, Chalet forays into Rajasthan and strengthens its leisure portfolio. The resort has significant scope for upgrades and is being repositioned as a premium upper-upscale property - a segment with limited supply in Udaipur.

These initiatives reflect Chalets integrated growth framework- combining asset ownership in prime locations, industry-leading asset management and operations, selective brand creation, and measured expansion, positioning the Company to sustainably pursue long-term growth opportunities in Indias evolving hospitality landscape.

FY 2025-26 operating performance:

FY 2025-26 was a mixed bag for operating environment as the demand was impacted by multiple extreme one-offs. FTA was impacted by Operation Sindoor at the onset of the year which was followed by intermittent disruptions within the aviation ecosystem and extreme monsoon conditions. The year ended with geopolitical unrest in West Asia which led to disruption in global energy flows as well as significant fall in overall business travel. These developments led to short-term uncertainty in travel sentiment and temporary volatility in passenger movement across some key routes.

Despite the challenges, Chalet delivered a formidable performance during the year reflecting the underlying resilient business model and disciplined execution. During FY 2025- 26, Chalet advanced its growth strategy through a calibrated blend of brand development and disciplined capacity expansion, reinforcing its long-term positioning in the upscale and luxury hospitality segment. The Companys approach is anchored in ownership of high-quality assets, backed by deep operating capabilities, prudent capital allocation, and a strong balance sheet, enabling sustained value creation across cycles.

Table: Rapid growth in KPIs as Resorts stabilise

	FY 2025-26	FY 2024-25	FY 2023-24
Average Daily Rate (?)
- Business	13,370	11,972	10,751
- Resorts	17,777	14,761	9,342
Combined Portfolio	13,727	12,094	10,718
Occupancy(%)
- Business	70.8%	74.8%	73.0%
- Resorts	42.9%	44.4%	64.0%
Combined Portfolio	67.2%	72.6%	73.0%
RevPAR (?)
- Business	9,459	8,950	7,826
- Resorts	7,620	6,561	5,930
Combined Portfolio	9,226	8,778	7,776

FY 2025-26 operating performance - Key highlights:

• Strategic portfolio expansion, prudent capacity additions, and sustained operational efficiencies have contributed meaningfully to performance while enhancing long-term value creation.

• The Companys upscale and luxury hotel assets, located in high-demand business districts, continued to benefit from the strong resurgence in travel activity across both domestic and international segments.

• The Company has recently forayed into the leisure segment and currently has three resorts with 446 keys (Rishikesh, NCR, Khandala). Given all three properties are in initial phase of lifecycle they are yet to reach stabilisation. However, the business is picking up well in line with the expectations and shall be an important driver for overall Chalets performance in coming years.

• For FY 2025-26, Chalet achieved a total income of Rs. 28.1 billion, marking a 60% increase compared to Rs. 17.5 billion in FY 2024-25. Consequently, EBITDA was reported at Rs. 12.3 billion with a 59% growth and 43.7% margins. Excluding Residential business, total income for FY 2025-26 stood at Rs. 20.7 billion, up by 18% over FY 2024-25. EBITDA stood at Rs. 9.6 billion with a 21% growth over previous year and 46.1% margins. This performance was led by strong hospitality and leasing performance for the company.

Hospitality Business:

Despite several external challenges, the Hospitality segments performance was robust during the year. The annual revenue crossed the ?17.3 billion led by robust rate growth in markets like Bengaluru, Hyderabad and Pune. EBITDA climbed to ?7.6 billion, with EBITDA margins at 43.9%

Capital Structure:

The business closed the year with a Net Debt outstanding of ?19 billion, despite significant capex and repayment of Preference Capital Rs. 2bn to the Promoters which were availed for the Residential project at Koramangala.

During the year, the credit rating of the Company provided by ICRA has improved from A+/A1 (Positive outlook) to AA-/A1+ (Stable outlook), while that provided by CRISIL & India Ratings continued to be at AA-/A1+ (Stable outlook). Further, the cost of borrowing has reduced by 92 bps over the year and stands at 7.48% as on March 31, 2026.

Particulars (Rs. millions)	FY26	FY25	FY24	FY23	FY19
Allocable to operating assets	10,947	13,109*	11,486*	11,768*	13,572*
Allocable to under-construction/ to be operationalized assets	8,258	6,800	13,600	12,600	900
Net Debt	19,206	19,909	25,086	24,368	14,472
Net Worth	36,972	30,457	18,509	15,415	13,410
Strategic Investments#	4,393	11,409	6,596	5,985	656
EBITDA (ex-Resi)	9,573	7,926	6,185	5,174	3,668
Interest Rate	7.5%	8.4%	8.9%	8.8%	9.4%

Note: *Net debt does not include preference shares; # Includes capital expenditure and strategic acquisitions

ESG Performance and Strategic Outlook:

ESG continues to be a core pillar of Chalet Hotels long-term value creation strategy, embedded across development and operations portfolio. During FY 2025-26, the Company further strengthened its ESG growth story by introducing Parivartan by Chalet: A Holistic Framework for Sustainability and Climate Action built on five pillars, keeping guests, communities and employees at the core, standing for the transition toward circular, equitable, innovative, and future-ready solutions that harmonize environmental stewardship, social well-being, and economic prosperity.

Chalet was ranked 2nd globally in the Hotels, Resorts & Cruise Lines sector under the S&P Global Corporate Sustainability Assessment (CSA) with a score of 82. The Company achieved its EV100 goal (as part of the Climate Group initiative) by transitioning guest fleet into EVs and installing EV charging infrastructure across its operational portfolio ahead of schedule, The Company stayed focused on its commitment towards the community on promoting education and employment, infrastructure upgradation and environmental stewardship to enable inclusive growth and resilient communities. So far, the program has successfully helped in training and transforming 500+ Youth (including PWDs, women) creating a sustained social impact and continued its efforts towards its Urban forest initiative by planting 19,000+ Saplings in Lonavala.

Chalet has now embarked on a Decarbonisation journey by committing to Net Zero by 2040 propelled by Renewable Energy integration, operational efficiency, supply chain engagements and low carbon initiatives to promote long-term value creation for stakeholders and sustainable growth.

Internal Control Systems and its adequacy: Your Company has well-established policies and procedures for internal control of operations and activities. On a consistent basis, your Company strives to integrate all functions across the organization, ranging from strategic support functions to core operational activities. In line with this objective, Chalet follows established standards that enable the robust implementation of internal financial controls throughout the organization. The findings and recommendations of the statutory and internal auditors are periodically reviewed by the Board, who thereon suggest corrective actions, as and when required. The Audit Committee proactively checks and balances the relevance and reliability of the internal control systems and suggests improvement to strengthen the same.

Threats & Risks: Details have been enumerated in the "Integrated Reporting” section. For further details, please refer to page no. 85

Human Resources: Details of human resources have been enumerated in the "Human Capital” section. For further details, please refer to page no. 56-57

RESULT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2026

The Companys Consolidated financial performance for the year ended March 31, 2026

(? in million)

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
Revenue from Operations	27,697.53	17,178.25	61.2%
Other Income	426.72	362.97	17.6%
Total Income	28,124.25	17,541.22	60.3%
Total Expenses	15,823.49	9,819.33	61.1%
EBITDA	12,300.76	7,721.89	59.3%
Depreciation and amortisation expenses	2,299.52	1,787.96	28.6%
Finance costs	1,804.50	1,590.82	13.4%
Profit/(Loss) before exceptional items and tax	8,196.74	4,343.11	88.7%
Exceptional items	10.21	-	-
Profit/(Loss) before income tax	8,186.53	4,343.11	88.5%
Tax Expense	1,736.36	2,918.17	-40.5%
Profit/(Loss) for the period/year	6,450.17	1,424.94	352.7%

 

Particulars	Q4FY26	Q3FY26	Q2FY26	Q1FY26
Revenue from Operations	5,582.17	5,816.76	7,353.09	8,945.51
Other Income	128.38	75.35	85.12	137.87
Total Income	5,710.55	5,892.11	7,438.21	9,083.38
Total Expenses	2,924.23	3,165.78	4,360.75	5,372.73
EBITDA	2,786.32	2,726.33	3,077.46	3,710.65
Depreciation and amortisation expenses	601.72	584.61	574.10	539.09
Finance costs	406.00	459.15	453.91	485.44
Profit/(Loss) before exceptional items and tax	1,778.60	1,682.57	2,049.45	2,686.12
Exceptional items	-	10.21	-	-
Profit/(Loss) before income tax	1,778.60	1,672.36	2,049.45	2,686.12
Tax Expense	148.58	431.68	501.26	654.84
Profit/(Loss) for the period/year	1,630.02	1,240.68	1,548.19	2,031.28

SEGMENT REVENUE BREAK UP

(? in million)

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
Hospitality	17,311.31	15,208.62	13.8%
Room Revenue	11,038.82	9,626.17	14.7%
Food & Beverage Revenue	5,050.41	4,545.60	11.1%
Other Revenue	1,222.08	1,036.70	17.9%
Rental & Annuity	3,060.86	1,969.78	55.4%
Lease Rent	2,602.83	1,675.26	55.4%
Maintenance and other recoveries	418.82	276.81	51.3%
Revenue from other services	39.21	17.71	121.4%
Real Estate	7,383.12	-	-
Sale of residential flats	7,374.89	-	-
Facility maintenance income	8.23	-	-
Other Income	368.96	362.97	1.7%
Total Income	28,124.25	17,541.22	60.3%

HOSPITALITY FY26 PERFORMANCE

• Hospitality revenue increased by 13.8% compared to the previous year, accounting for 62% of the consolidated revenues

• Room revenue increased by 14.7% against the previous year, and 14% increase in Average Daily Rates for the year.

• Food and Beverages revenue increased by 11.1% to 5,050.41 million

• Other Revenue increased by 17.9% over the previous year Hospitality KPI

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
ADR (f)
MMR*	12,693	12,032	6%
Other Cities	14,724	12,163	21%
Combined	13,727	12,094	14%
Occupancy %
MMR*	74.5%	76.8%	-2.3%
Other Cities	61.4%	68.4%	-7.0%
Combined	67.2%	72.6%	-5.4%
RevPAR
MMR*	9,453	9,239	2%
Other Cities	9,045	8,324	9%
Combined	9,226	8,778	5%

*MMR represents Mumbai Metropolitan Region

Rental and Annuity

Revenue from rental and annuity grew by 55.4% to Rs. 3060.86 million against Rs. 1969.78 million in previous year led primarily by the leasing of new commercial spaces.

Real Estate

As of 31st March 2026, 320 units have been sold with only one unit remaining to be sold. During the year 2025-26, 152 units were handed over and the corresponding revenue of Rs. 7,383.12 million was recognised. The project has 169 units pending handover which shall be done in the FY 2026-27.

Operating Expenses

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
Real estate development cost	736.96	84.82	768.9%
Changes in inventories of finished goods and construction work in progress	3,630.51	-
Food and beverages consumed	1,297.79	1,168.09	11.1%
Operating supplies consumed	436.23	425.09	2.6%
Employee benefits expense	2,878.50	2,344.78	22.8%
Power and fuel	943.49	840.53	12.2%
Other expenses	5,900.01	4,956.02	19.0%
Total Expenses	15,823.49	9,819.33	61.1%

Note:

• Real Estate development cost pertaining to the residential project increased by ~770% as compared to last year

• Food and beverages consumed for the period were higher by 11% aligning with the growth in Food and Beverages revenue

• Employee benefit expenses increased by 23% over last year. Employee cost constituted 10% of revenue from operations for the year.

EBITDA

Due to various cost control measures, EBITDA increased by 59% to Rs. 12,300.76 million from f7,721.89 million last year.

Depreciation and amortization expenses were Rs. 2,299.52 million for the year as compared to Rs. 1,787.96 million

Finance costs amounted to Rs. 1,804.50 million, which represents an increase of f213.68 million from the previous year. Cost of debt has reduced from 8.4% as of Mar25 to 7.48% as of Mar26.

Equity & Debt

Particulars	For the year ended
	March 31, 2026	March 31, 2025
Equity share capital	2,189.94	2,184.55
Other equity	34,787.99	28,277.92
Non - Controlling interests	-6.37	-5.45
Total equity	36,971.56	30,457.02
Gross Debt (Excl Pref Capital)	23,239.48	23,573.93
Debt / Equity	0.63	0.77

The capital expenditure for FY 2025-26 was Rs. 4,393.12 million towards ongoing project.

Equity

Total Equity increased by Rs. 6,514.54 million, largely driven by net profit for the year.

Working Capital movement

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
Debtors Turnover1	37.55	25.76	46%
Inventory Turnover2	7.51	8.04	-7%
Current Ratio3	0.70	0.53	33%
Interest Coverage Ratio4	6.82	4.85	40%

2 Cost of goods sold (Excluding Residential Segment) / Average inventory of Hotel Units

3 Current Assets/ Current Liabilities

4 Earnings before interest, depreciation, amortization, and tax (EBITDA)/ Interest Cost of the Period

Cashflow

Particulars	For the year ended
	March 31, 2026	March 31, 2025
Net Cash from Operating Activities	10,668.63	9,503.85
Net Cash from Investing Activities	-5,753.59	-13,853.78
Net Cash from Financing Activities	-4,664.97	4,955.91
Net Change in Cash and Cash Equivalent	250.07	605.98

Standalone Financials

Revenue from operations comprises 97% of the Companys Total Income on a Standalone basis

Particulars	For the year ended
	March 31, 2026	March 31, 2025	Change %
Revenue from Operations	25,701.91	16,265.65	58.0%
Other Income	691.83	551.51	25.4%
Total Income	26,393.74	16,817.16	56.9%
Total Expenses	14,547.49	9,174.68	58.6%
EBITDA	11,846.25	7,642.48	55.0%
Depreciation and amortisation expenses	1,818.83	1,571.46	15.7%
Finance costs	1,590.60	1,371.23	16.0%
Profit/(Loss) before exceptional items and tax	8,436.82	4,699.79	79.5%
Exceptional items	10.03	-
Profit/(Loss) before income tax	8,426.79	4,699.79	79.3%
Tax Expense	1,772.72	2,984.08	-40.6%
Profit/(Loss) for the period/year	6,654.07	1,715.71	287.8%

The standalone Revenue from operations for the year increased by 58.0% to ?25,701.91 million compared to the previous year, driven by a 7.2% growth in the Hospitality segment and a 55.4% increase in the Rental & Annuity segment along with the sale of residential flat amounting to Rs. 7,383.12 million.

EBITDA reached Rs. 11,846.25 million with a 44.9% margin this year, similar the last year.

The annual profit was Rs. 6,654.07 million, up from Rs. 1,715.71 million the previous year. The increase is driven by higher business volumes in Hospitality and Commer Real-estate businesses as well as recognition of revenue from the Residential business.

EXHIBIT 1

Key ratios (basis Consolidated Financial Statement)

Particulars		For the year ended
	March 31, 2026	March 31, 2025	Change %
Operating Profit Margin (%)	36%	34%	2pp
Net profit Margin (%)	23%	8%	15pp
Return on Net Worth (%)	17%	5%	13pp

Note:

pp: percentage points

1. Operating Margin (%) = Earnings Before Interest & Taxes/ Total Income

2. Net Profit Margin (%) = Net Profit/ Total Income

3. Return on Net Worth (%) = Profit after Tax/Net Worth