In Monday’s intra-day trade, shares of Chalet Hotels hit a 52-week high at Rs 375.25, as they rallied 6% on the BSE in the otherwise weak market. The S&P BSE Sensex was down 0.71% at 57,018 at 09:41 am. In the past week, the stock of Hotel Company has surged 14% after the rating agencies studied Chalet Hotels’ credit rating along with the outlook on the long-term issuer rating from ‘negative’ to ‘positive’ and ‘stable’. In comparison, the benchmark index remained flat in the same period. Chalet Hotels (CHL) exceeded its previous high of Rs 362.85 on 21st September 2022. It hit a record high of Rs 395 on 31st December 2019. In the past year, the stock has skyrocketed 65%, a 3% decline in the Sensex.

“The Positive Outlook imitates a reliable recovery in CHL’s business operations since 2QFY22, with 1QFY23 revenue and EBITDA beyond the pre-COVID-19 levels. The company’s overall revenue was Rs 250 crore, and EBITDA was Rs 100 crore in Q1FY23,” India Ratings and Research said in rating rational on 28th September.

The agency expects the company’s business momentum to continue with the continuation of the full-scale global travel, which is likely to increase CHL’s earnings and, in turn, lead to stable deleveraging over FY23-FY24. The company benefits from its improved business diversification with a high-margin and stable commercial segment accounting for 35% of the revenue from the current 10%. The revision in rating view to ‘Stable’ factors in the healthy upgrading, the operating performance of the CHL’s hospitality portfolio in Q1 FY2023, and prospects of sustained recovery near to medium term, ICRA said in rating rational on 29th September.

Along with the sturdy rentals from the commercial real estate segment, this would provide the company’s cash flows going forward. The ratings remain supported by CHL being a part of the K Raheja Corp Group, a reputable name in hospitality, commercial, and residential real estate businesses. The company’s diverse business mix, including hospitality, commercial and retail assets; and CHL’s management tie-up with Marriott International Inc. and Accor Hotels, the related benefits from their wide branding, marketing, and advertising networks, said the rating agency.