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Parentage-led Mixed-use Projects in Supply-constrained Markets

Brigade Enterprises, one of South India's largest developers, has built a mixed-use ecosystem that drives hotel demand through corporate, retail and mall-linked catchments. This gives BRIGHOTE access to established, high-quality locations for future expansion. India remains structurally underpenetrated in branded hospitality, with branded rooms comprising only ~5– 6% of total supply (~200K keys). This gap is most pronounced in UpperUpscale and Luxury, where demand is set to significantly outpace supply. High land cost and limited development sites constrain upcoming supply in Tier-1 & 2 micro-markets, while South India's expanding tourism infrastructure and a rapidly scaling GCC ecosystem (Bengaluru alone hosts 880+ GCCs and Hyderabad 355+) continue to support sustained business and leisure demand. BRIGHOTE's existing 1,604-key portfolio already runs at ~76.1% occupancy, leaving headroom for further occupancy and ARR upside.

Doubling Keys with a Focus on Luxury & Upper-Upscale Properties

BRIGHOTE's room additions are concentrated in premium and luxury formats. Contribution from these formats is expected to rise from 14% of the keys to 38% by FY30E. BRIGHOTE has zero luxury hotels at present, however, the company is building a Ritz-Carlton (70 keys) on an island in Keralam, Intercontinental in Hyderabad and JW Marriott in Chennai OMR. These additions buoy ARR. We anticipate portfolio ARR to increase from ~INR 7,500 in FY26 to INR ~11,000 by FY29E, implying a CAGR of ~14%. EBITDA margin is forecast to expand by 441 bps from 33.1% in FY26 to 37.5% by FY29E.

Strong Balance Sheet and Cash Flows Support Expansion

Following its successful initial fund raise (INR 7.6 Bn) and debt reduction initiatives in July 2025, BRIGHOTE reported a cash position of ~INR 2.5 Bn as of FY26-end. This provides significant balance sheet flexibility ahead of its expansion phase. The company generated an operating cash flow of ~INR 2.0 Bn in FY26, which we project would expand at a CAGR of 27.1% over FY26–FY29E. Thus, internal accruals of ~INR 6.6 Bn over the next few years are estimated to fund ~30% of the planned CapEx, while ~INR 18 Bn funded through debt. We expect debt-to-equity to peak at ~1.5x in FY29E and moderate thereafter as new assets ramp up and cash flows strengthen

View and Valuation

We initiate coverage on BRIGHOTE with a ‘BUY’ rating and a target price of INR 80, based on FY28E EV/Adj. EBITDA of 14.0x (vs. 12x–16x for asset owners). The multiple is assigned based on BRIGHOTE’s transition from midmarket to luxury and upper-upscale. Driven by premium portfolio positioning and a visible pipeline, we project Revenue / Adj. EBITDA / PAT to expand at CAGRs of 27.8% / 33.2% / 31.3%, respectively, over FY26E–29E. Our DCF valuation of INR 80/share provides a sanity check.

Key Risks to our Valuation

Possible delay in commissioning of upcoming projects, probably slower-thanexpected ramp-up of luxury assets and higher leverage

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