The tax cost shown in Q1, 2026 (17%) is deferred tax and not current tax. Deferred tax is more of book entry to reflect the true profit /loss for the period as per the Indian accounting standards (Deferred tax ensures that the financial statements provide a more accurate picture of the company’s financial position by acknowledging the future tax consequences of current transactions and events). So Def Tax impact the PAT but doesn’t results in cash outflow.
Why deferred tax arises
Deferred tax arises because of temporary differences between a company’s accounting income (as per accounting standards like GAAP or IFRS) and its taxable income (as per tax laws).
These differences are primarily timing related, meaning the recognition of income or expenses differs between accounting periods for financial reporting purposes and tax purpose
How it impacts the financial statements
Balance Sheet Impact: Deferred tax liabilities (DTL) and deferred tax assets (DTA) are recorded on the balance sheet.
DTL signifies future tax obligations – taxes that will be payable in future periods when the temporary differences reverse.
DTA represents future tax benefits – taxes recoverable in future periods, often due to deductible temporary differences, carry forward of unused tax losses, or carry forward of unused tax credits.
Income Statement Impact:
While recorded on the balance sheet, deferred tax impacts the income statement in the sense that the tax expense or income reported includes both current tax and deferred tax. This helps match the tax expense to the accounting period in which the profits are earned.
I have seen no other hotel reporting drop in occupancy as SAMHI did last quarter…
they did speak about geo-political and flight crash, but other hotels are doing just fine…
Is there anything to read between the lines here..
Any thoughts??
Samhi hasn’t reported any drop in occupancy viz-a-viz it’s peers, it was even better. The only drop in revenue was observed in May and it was there and reported by most of the hotels (refer the earning presentation from Indian Hotels and Juniper Hotels).
Samhi reported a miss of 2.5% revenue as compared to the analyst expectation. For simplification: Samhi reported 9cr less revenues and 6cr less EBITDA.
Reasons:
5cr revenue loss was due to sale of Capsia and revenue loss due to conversion of commercial space into hotel room in Sheraton, HYD.
Loss of revenue in May due to the geo political event.
The recent correction is IMHO a good opportunity to add, as after all the intervention done by the management the fundamental has only improved. Stock was nearly doubled from the Feb 2025 correction and the 20% correction shouldn’t be a surprise.
Disc: doubled my holding in the recent correction, biased
GIC’s value-dilutive deal: Recently SAMHI hotels entered a deal with GIC, where in exchange for ₹750 crore, GIC got a 35% share in SAMHI’s top 5 upper up-scale hotels. Note: GIC didn’t invest in SAMHI, they invested ONLY in the subsidiaries of SAMHI which held these prized assets. Upper upscale hotels boast the highest RevPAR & plush margins.Also, the demand-supply gap for these properties is highly skewed, with demand far outstripping supply. Hence, the premium tariffs and valuations. The primary share of book value of the business used to come from these luxury hotels and after the deal, retail investors hold 35% less of the same. Although, the deal was important to pare debt, the specifics of this deal didn’t age well with me.
Valuation Multiples not comparable to players such as Indian Hotels or Lemon Tree: because it does not control its own brand or marketing. SAMHI essentially contracts brands like Marriott, Hyatt and Sheraton to run its hotel for a management fee. It does not have its own brand which limits any franchise value or asset light scalability in the future (apart from owning hotels via variable leases). It is better compared to a REIT where free cash flows are redeployed in growth rather than being distributed to investors.
Limited upside potential: Management in the Q4 FY25 con call guided that in the next 3-4 years the company will grow its EBITDA at 15-20% CAGR. This would lead to ₹1000-₹1200 crores of cash out of which upwards of ₹500 crores will be deployed for capex of the recently acquired Whitefield and Hitec City hotels. Plus, they need to pare their ~₹1800 crores of existing debt as well (post GIC infusion). This leaves limited upside on the table for any sort of dividend distribution or EPS accretive buybacks.
The above 3 were mine major reasons for exiting the position. However, I could very well lose out on gains, if Mr. Ashish Jakhanwala and team hit the ball out of the park. I sincerely wish them the best.
Comparison to REIT is actually very valid. But GIC dilution is a strategic capital recycling play to derisk the whole company and getting a deep pocketed partner. It should increase their leverage while contracting brands.
I’m holding this for more than a year now and just waiting for operating leverage (of converting mid scale hotels to upscale) to kick in and EBITDA to reach an upper threshold.
IMO, It won’t get the luxury brand premium valuations but seems like a safe bet to 2x your money in the medium term. Until then, let’s see if the mgmt pulls out some other interesting move.
GIC deal is Win Win proposition, Debt is reduced significantly. Samhi still hold 65% ownership as per agreement. We wouldn’t see 140 kind of levels again as even at current rate its a compelling buy. Proportion of Upper Upscale inventory will rise in next two years. Chalet doesn’t own any brand. Management contracts are always better to keep the value, visitors doesn’t its owned by Samhi, they know only marriot. I am holding it for a year now and plan to hold untill valuation correction happens on upper side.don’t find much value in markets as of now.
Came across a process-first read on Samhi Hotels—uses a poker-style framework to track RevPAR/occupancy, EBITDA margins, deleveraging, and cash conversion.
Loved the bull/base/bear scenario map and quarterly dashboard you can reuse.
Worth a look →
Nice read ..but somehow, In-spite of being in the tailwind industry and serving premium and top line clients. They have not created any wealth for investors in the last many years, and quality of decisions they have made in the past does not seem right. They are not focused on making the business profitable and totally ignored the most important stake holders meaning making money for its investors. In case they make money, it will not be substantial. I’m not confident in their management. Maybe more research needed.
I agree that in the past they grew too fast and took on too much leverage, which hurt equity returns. But over the last 12–18 months, management has largely walked the talk:
Balance sheet: Net debt/EBITDA has come down meaningfully (c. ~5× → ~3× YoY) with a clear deleveraging plan. Interest cost is easing as refinancing kicks in; coverage is improving.
Operations: RevPAR and ARR have been growing (double-digit YoY recently), with EBITDA margins in the mid-30s—a big shift versus the pre-turnaround years.
Cash flow discipline: Free cash flow has turned positive after maintenance capex; proceeds from non-core asset sales have been used to reduce debt instead of chasing empire-building.
Credit rating: Credit rating was upgraded to A+ as management guided.
That said, your caution on capital allocation and shareholder wealth creation is warranted. But this is why we are getting it at throw-away valuation.
I believe reward to risk ratio is much better here.
Study valuation methods for different industries, if someone really need to become a value investor than look at Cash flow valuations not PE, PE valuations are ok in a bull markets however your portfolio bottom will be protected if your bets are based on cash flow valuations. SAMHI is trading at forward EV/EBIDTA levels of <10 which is cheapest with its profile.
P/E looks optically high (36x) because the “E” is still depressed (first year of profitability). As operating leverage (RevPAR → EBITDA) and financial leverage (lower interest) kick in, the same market cap will screen at a much lower P/E without the price moving.
For asset-heavy hotels, we value on EV/EBITDA and EV/Room, not P/E. These are capital-structure neutral and better capture the cash-earning power of the rooms.
Relative stack: Samhi screens around mid-teens EV/EBITDA (TTM), while stronger peers typically change hands at a premium range. The discount vs peers plus the deleveraging path is why I call the valuation low (or at least undemanding) on the right metric.
Why earnings can inflect fast, Suppose,
EBITDA +₹60–80cr from RevPAR/occupancy/mix,
Interest –₹60–80cr from refinancing + net-debt reduction,
Net impact → PBT up ~₹120–160cr*; after tax, PAT can >2x off a small base.
That’s how a 36x P/E today can compress quickly as the denominator normalizes.
SAMHI Hotels received MIDC’s extension for its landmark dual-branded hotel project in Navi Mumbai (~700 rooms total, Phase 1 ~400 rooms). It marks its entry into the Mumbai Metropolitan Region and will be its largest asset by room count, significantly boosting its scale and presence in this critical gateway market. This significant project, its largest by room count, aligns with its stated strategy to scale high-quality assets in key markets, reinforcing its presence across major Indian office hubs.
I was calculating how the debt servicing would look like from Fy26 til Fy30.
As of FY2025 annual report, total debt servicing is in the tune of 1963 Cr. But they are long dated servicing like 56% of it is supposed to get serviced post 2030.
So Anyone assuming the cash outflow of more than ~900 Cr within 4-5 years in debt servicing is wrong according to my understanding.
If we see yearly loan repayment according to the payment terms, they are supposed to pay :
•120 Cr in FY26,
•175 cr in FY27,
•195 cr in FY28,
•215 Cr in FY29,
•160 Cr in FY30,
AND 1098 CR between FY31-34 & 16 Cr in FY35-36.
Peak repayment cycle is FY29 at ~215 Cr. So in cumulative in next 5 years, i.e= FY26-30, they are in total responsible to pay 865 Cr (44% of current total debt of 1963 Cr).
Their OCRDs of 16 Cr remains long dated(April 2036). So when we consider this, & calculate the bull-bear-base scenario = calculations would be more optimistic.
P.S: [This all given that Samhi don’t take any further loans with repayment schedule falling in this period. With GICs money infusion, we still don’t know yet, what & which kind of Debt have they repaid. With GIC’s scenario added, the debt servicing profile would further come down in this period as of my assumptions].
You are free to correct me or add, if I am wrong.
