India’s hotel industry is experiencing robust growth, with occupancy rates projected to exceed 68-72% in 2025, driven by strong domestic demand and branded hotel expansions. The sector is expected to see revenue growth of 7-9% in FY2025, with room rates rising by 8-10% due to high demand and limited supply.
Price movement
With a market capitalization of Rs 3,030.12 crore, the shares of Samhi Hotels Ltd closed at Rs 137.70 per share, decreased around 2.41 percent as compared to the previous closing price of Rs 141.10 apiece.
Matter Explanation
Samhi Hotels Ltd is planning to amplify its operational capacity from 4,800 to 5,600 rooms, which will help to achieve revenue growth of 16-17 percent over the next two to three years. Same-store hotels are expected to deliver about 10-11 percent total revenue growth over a longer period, while overall margins are likely to stabilise between 40 percent and 43 percent in the near term.
Samhi Hotels plans to monetize Rs 150 crore in assets over 12-15 months to reduce debt. With Rs 100 crore from free cash flows, net debt is expected to decline by Rs 250 crore. The company targets a net debt-to-EBITDA ratio of 2.5x long-term.
Market and Business Update
Strong office market expansion and record 77 million passenger movements drove RevPAR growth. Bangalore and Hyderabad see rising office space demand and air traffic, boosting future prospects. The company plans to double its upper upscale and upscale hotel portfolio from 1,000 to over 2,000 rooms.
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Ongoing expansions include
The company’s expansions include 54 new rooms at Sheraton Hyderabad, 22 at Hyatt Regency Pune, and 330 through conversions in Pune and Jaipur. Major additions include 530 rooms at W Hotel Hyderabad and Westin Tribute Bangalore, alongside renovations at Holiday Inn Express Greater Noida.
Operational Insights
The ACIC portfolio transition to management contracts is set to drive revenue growth from Q4 FY25, with margins improving to 39.4 percent, expected to exceed 40 percent soon. F&B revenue growth remained at 5 percent, with efforts focused on boosting outlet revenues through strategic marketing initiatives.
Guidance
Management expects RevPAR growth across all segments, driven by strong market positioning and strategic expansions. Q4 FY25 revenue growth is projected to surpass Q3 FY25, with EBITDA margins anticipated to trend towards 41-42 percent in the coming quarters, reflecting improved operational efficiency and profitability.
Company Profile
SAMHI Hotels Limited is an India-based firm that offers a hotel ownership and asset management platform. The Company’s hotels fall under the Upper Upscale and Upscale, Upper Mid-scale, and Mid-scale segments. It has a portfolio of over 31 functioning hotels with 4,801 keys and a broad geographic presence in 14 locations across India.
Written by Abhishek Singh
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