Chalet Hotels Limited — Q4 FY26

Chalet Hotels Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=K3RpqBXDSU8 Published: 1d ago

0:01 1 second Ladies and gentlemen, good day and welcome to Charlay Hotels Limited quarterf and full year ended 31st March 0:09 9 seconds 2026 conference call. This conference call may contain forward-looking statements about the company which are based on beliefs, opinions, and 0:18 18 seconds expectations of the company as on the date of this call. These statements are not guarantees of future performance and 0:25 25 seconds involve risks and uncertainties that are difficult to predict. As a reminder, all bias spin lines will be in the listen 0:32 32 seconds only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 0:39 39 seconds conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now 0:48 48 seconds hand the conference over to Mr. Shwatang Singh, managing director and CEO. Thank you and over to you sir. 0:56 56 seconds Thank you Michelle and a very good morning everyone. It's a pleasure to welcome you to this call today. We value this forum as it gives us an opportunity 1:05 1 minute, 5 seconds to share our journey discuss the growth road map ahead. Also it is imminent that we reflect on the evolving geopolitical 1:13 1 minute, 13 seconds and macroeconomic landscape that influences our industry today. As always we welcome your queries and 1:21 1 minute, 21 seconds perspectives. They keep us anchored, focused and aligned in our pursuit of long-term value creation for all our stakeholders. 1:29 1 minute, 29 seconds The fiscal year 2526 and indeed the last quarter has been quite remarkable both for the industry at large and for chalet 1:37 1 minute, 37 seconds in particular. Over the past year, the industry has navigated a complex and dynamic environment shaped by several macroeconomic and geopolitical events. 1:47 1 minute, 47 seconds These included operation Sindur, trade tariff related uncertainties, aviation disruptions, extreme weather conditions 1:57 1 minute, 57 seconds and the heightened geopolitical tensions in West Asia. Despite these challenges, the industry delivered a resilient and 2:04 2 minutes, 4 seconds robust performance marked by strong refar growth primarily driven by sustained expansion in average room 2:11 2 minutes, 11 seconds rates. This performance underscores the inherent strength of the domestic hospitality sector supported by rising 2:18 2 minutes, 18 seconds disposable incomes, evolving consumer preferences, India's expanding economic footprint and a strong resurgence in 2:26 2 minutes, 26 seconds mice activity and not to forget the evergreen demand driven by weddings. 2:31 2 minutes, 31 seconds Importantly, while there are there has been a healthy pipeline of signings by both do domestic and global hotel 2:40 2 minutes, 40 seconds brands, supply continues to lag behind, reinforcing our confidence and excitement as we plan ahead. Turning 2:48 2 minutes, 48 seconds specifically to the quarter, performance was uneven across three months. January began on a softer note with no auspicious dates for weddings and 2:57 2 minutes, 57 seconds additionally Mumbai witnessing municipal elections in the third week of the month followed by a long weekend with Republic 3:04 3 minutes, 4 seconds Day following falling on a Monday. These factors collectively impacted demand particularly in Mumbai. It is also 3:12 3 minutes, 12 seconds important to note that the base for January last year was strong, supported by large concerts including international events like Cold Play and 3:21 3 minutes, 21 seconds significant mice activity elements that were absent this year. February was very strong with both ADRs and occupancies 3:29 3 minutes, 29 seconds picking up. However, towards the end of February, the escalation of geopolitical tensions in West Asia began to 3:37 3 minutes, 37 seconds materially impact global travel patterns, leading to notable disruptions in March with widespread cancellation 3:44 3 minutes, 44 seconds across segments. In the context of international business travel, it is important to recognize the multiplier 3:51 3 minutes, 51 seconds effect it creates. Overseas executive visits are typically accompanied by respective teams within India. 3:59 3 minutes, 59 seconds International business travel slowed down in March. This associated domestic business demand also got impacted. 4:07 4 minutes, 7 seconds Consequently, the quarter saw a meaningful impact in the form of both confirmed cancellations and opportunity 4:14 4 minutes, 14 seconds losses. Despite these short-term disruptions, we remain confident in the structural strength of our business and the broader industry fundamentals. 4:24 4 minutes, 24 seconds Our balance sheet remains strong. Our asset portfolio is well positioned and our growth strategies align with long-term demand drivers. We continue to 4:34 4 minutes, 34 seconds focus on disciplined execution, operational excellence and prudent capital allocation as we move forward. 4:41 4 minutes, 41 seconds With that context about the industry and macro environment, let me talk about our own performance and strategic 4:47 4 minutes, 47 seconds initiatives. The year 2526 has been a milestone year for us as our consolidated revenue crossed the rupees 4:56 4 minutes, 56 seconds 25 billion mark and the EIA crossed the 10 billion mark reflecting both the scale and inherent strength of our diversified platform. 5:06 5 minutes, 6 seconds Excluding the residential business, our revenue grew by 18% yearonear to rupees 20,741 5:14 5 minutes, 14 seconds million with AITA of rupees 9,573 million up 21% yearonear. Importantly, 5:23 5 minutes, 23 seconds AITA margin improved by 9 97 bips to 46.2%. 5:29 5 minutes, 29 seconds For the quarter, our consolidated revenue was up by 6% yearonear to rupees 5:35 5 minutes, 35 seconds 5,711 million with AITA of rupees 2786 million up 8% yearonear. 5:44 5 minutes, 44 seconds Abita margins improved by 100 bips to 48.8%. 5:49 5 minutes, 49 seconds Excluding the residential business, our revenue was very similar, growing 6% yearonear to rupees 500 5,76 million 5:58 5 minutes, 58 seconds with AITA of rupees 2,800 million up 7% yearon year. AITA margin improved by 13 bips to 49.1%. 6:10 6 minutes, 10 seconds Let me now touch upon the hospitality business performance that is core of our platform for the year. Hospitality 6:17 6 minutes, 17 seconds business grew 14% yearonear uh on the revenue and 12% yearonear on ebita reflecting sustained demand and 6:26 6 minutes, 26 seconds resilient pricing dynamics. On the quarter hospitality revenue grew 3% yearonear 6:32 6 minutes, 32 seconds while aida stood at rupees 2248 million up 1% yearonear. From an operating 6:40 6 minutes, 40 seconds perspective, repaire declined 3% yearonear in quarter 4, largely driven by a 7.7% drop in occupancy. As I 6:49 6 minutes, 49 seconds highlighted earlier, this was predominantly a function of Mumbai underperforming relative to the rest of the industry. As per industry reports, 6:57 6 minutes, 57 seconds Mumbai ADR growth of only was only 0 to2% in occupancy and a decline of 0 to 7:06 7 minutes, 6 seconds sorry my apologies. Mumbai saw ADR growth of only 0 to2% and an occupancy decline of 0 to2 percentage points 7:15 7 minutes, 15 seconds during January to March 26 compared to last year. In contrast, India overall average recorded ADR growth of 6 to 8% 7:25 7 minutes, 25 seconds with a limited occupancy decline of 0 to2 percentage points. If we look at our segment in the micro markets that we are 7:33 7 minutes, 33 seconds present in, the variance was even starker. Additionally, our Pawai property continues to face temporary constraints due to ongoing construction 7:42 7 minutes, 42 seconds of Signis 2 tower which has impacted weddings and mice demand along with the crew thereby affecting occupancies. 7:50 7 minutes, 50 seconds Given Mumbai's high contribution to our hospitality revenues, these factors masked the otherwise healthy performance 7:57 7 minutes, 57 seconds that we had across the rest of our portfolio. 8:01 8 minutes, 1 second Compared to business hotels, resorts did ve very well during this quarter. 8:05 8 minutes, 5 seconds Western Rishiesh was has delivered a strong performance and has continued its momentum into April and May. Aiva 8:13 8 minutes, 13 seconds Kandala did its first full quarter of full inventory. We did multiple marketing activities during this period 8:20 8 minutes, 20 seconds to create market awareness and this was all exceptionally wellreceived. The pickup in occupancy with ADR sustaining 8:28 8 minutes, 28 seconds north of rups 15,000 gives us confidence for the upcoming monsoons which will be followed by the wedding season. 8:36 8 minutes, 36 seconds Coming to our commercial real estate business during the quarter we signed LOI for an additional 67,000 square foot 8:44 8 minutes, 44 seconds at Bangalore taking the overall occupancies to over 83%. Occupancy at POI remains strong at 90%. 8:52 8 minutes, 52 seconds Our March 26 run rate of rentals touched rupees 280 million as indicated in the 8:59 8 minutes, 59 seconds last call. While growth in FY 2627 would be driven by improvement in occupancies at Pway and Bangalore, commissioning of 9:07 9 minutes, 7 seconds Signis 2 in FY 2728 will bring a major growth in this business. Now let me talk about our 9:16 9 minutes, 16 seconds strategic initiatives during the quarter. Starting with pipeline expansion, Shalet now has 3,389 9:24 9 minutes, 24 seconds operating keys with a pipeline of approximately 1,655 keys across seven assets. That takes the 9:33 9 minutes, 33 seconds total key count to more than 5,000, marking another milestone in our journey. During the quarter, we added 9:40 9 minutes, 40 seconds two major projects to our pipeline, both in high demand destinations with strategic advantage and potential to deliver high returns over the long term. 9:50 9 minutes, 50 seconds Udapur, we completed the acquisition at Udipur Resort, marking our entry into this fast growing and deep leisure market of Udapur. 9:58 9 minutes, 58 seconds We have paid a total consideration of rupees 1,710 million for 144 key resort 10:05 10 minutes, 5 seconds spread over 8.2 2 acres of land reducing the land to launch risk subse uh substantially. 10:14 10 minutes, 14 seconds The location is very prime and the land is very beautiful. We intend to significantly upgrade the infrastructure and rooms before we rebuild and re 10:23 10 minutes, 23 seconds relaunch the property as an upper upscale resort a wide open space in the UD market Udapur market with limited new 10:31 10 minutes, 31 seconds supply. We are also evaluating expansion potential through different avenues. 10:37 10 minutes, 37 seconds Clarity on this shall emerge in in the next few months. Thus, we are not able to share the project timelines, capex 10:45 10 minutes, 45 seconds and brand related information at this stage. But what I can tell you today is that this will be another marquee asset for our portfolio. 10:54 10 minutes, 54 seconds Hyderabad. In February, we announced an ultra luxury 330key hotel in Hyderabad, a green field project located outside 11:02 11 minutes, 2 seconds Mindpace, Marapur. The hotel will operate under the Ridge Carlton brand. 11:08 11 minutes, 8 seconds This is our first ultra luxury project and we are excited about this especially given the prime location in Hyderabad 11:14 11 minutes, 14 seconds and that has strong demand for luxury product. Also, it helps us in positioning given our strong presence in 11:22 11 minutes, 22 seconds the micro market with two properties already operational and performing very well. The hotel will be constructed by Mindpace REIT and we shall be taking 11:32 11 minutes, 32 seconds over a warm shell on a lease on a long-term lease basis. Our fit out cost shall be close to rupees 5,600 11:41 11 minutes, 41 seconds million and largely after we get the position in quarter 4 FY28. So, it is backended. We expect the launch to launch this project by end of FY2829. 11:55 11 minutes, 55 seconds I'm also delighted to share that our corporate sustainability assessment score by Dow Jones sustainability index has jumped from 67 to 82 this year 12:05 12 minutes, 5 seconds putting us at second place globally among the hospitality peers. This is a significant achievement given our thrust 12:12 12 minutes, 12 seconds on sustainable growth. Also, I would like to highlight that our green energy consumption has now moved up to 65%. 12:21 12 minutes, 21 seconds Let me now talk about the updates on live projects. Work is at full swing in the signness to provide and we are on 12:28 12 minutes, 28 seconds track for an FY27 end substantial completion. Although the West Asia crisis has put some pressure 12:36 12 minutes, 36 seconds on labor labor availability, we expect to launch 70 rooms at Taj project at Delhi International Airport 12:45 12 minutes, 45 seconds by quarter 4 FY27 with balance inventory to be launched in a phase manner thereafter. 12:52 12 minutes, 52 seconds Mindpace has begun excavation work at Hyderabad and Nyoli. Both the projects are on track. In summary, the Indian 13:00 13 minutes hospitality industry's performance is being driven by a potent potent mix of strong domestic travel, uh higher 13:08 13 minutes, 8 seconds disposable incomes, improved infrastructure and connectivity, event-l tourism, and a favorable demand supply gap. 13:17 13 minutes, 17 seconds There might be a there might be some short-term hiccups, but the story continues to unfold in a positive manner. Shalet is well geared up to 13:25 13 minutes, 25 seconds seize the opportunity with strong cash flows and robust growth pipeline. With that, I will now hand over to Nitan who will take you through the financial details of the quarter. 13:36 13 minutes, 36 seconds Thanks. Uh good morning to everyone on the call. I'm pleased to walk you through our financial performance for 13:44 13 minutes, 44 seconds the quarter and the year ended 31st March 2026 and also provide perspective on key 13:51 13 minutes, 51 seconds financial and performance drivers, balance sheet strength and capital allocation. 13:57 13 minutes, 57 seconds Starting with the full year, our consolidate revenue increased by 60% yearonear to 28124 million supported by 14:06 14 minutes, 6 seconds residential revenue recognition during the year. 14:10 14 minutes, 10 seconds Abita grew correspondingly by 59% yearonear to 12,31 million. 14:17 14 minutes, 17 seconds Abita margin stood at 43.7%. 14:21 14 minutes, 21 seconds Excluding the residential segment, our performance reflects the underlying strength of the operating businesses. 14:29 14 minutes, 29 seconds X residential revenue grew 18% yearonear to rupees 20,741 14:36 14 minutes, 36 seconds million while Abita increased 21% yearonear to 9,573 14:42 14 minutes, 42 seconds million. Abita margins expanded by 97 basis points to 46%. 14:50 14 minutes, 50 seconds Driven by operating leverage, strong cost discipline and portfolio mix. 14:56 14 minutes, 56 seconds Moving to the quarter, consolidate revenue grew 6% yearonear to 5711 15:02 15 minutes, 2 seconds million with an AITA of 2786 million, up 8% yearonear. 15:11 15 minutes, 11 seconds This has resulted in a 100 basis point improvement in AITA margin to 48.8%. 15:18 15 minutes, 18 seconds On an ex- residential basis, quarterly revenues stood at rupees 576 million, up 15:25 15 minutes, 25 seconds 6% yearonear with an AITA of rupees 2,800 million, also reflecting 6% 15:32 15 minutes, 32 seconds year-on-year growth. The AITA marginial improved by 13 basis point to 49.1% 15:41 15 minutes, 41 seconds highlighting the consistency in underlying operating performance. 15:46 15 minutes, 46 seconds Let me now cover the hospitality segment. For the full year, hospitality revenues grew 14% yearonear to 17,311 15:56 15 minutes, 56 seconds million supported by incremental inventory and repo growth. Aeta increased 12% yearonear to rupees 7,63 million with aa margins at 43.9%. 16:10 16 minutes, 10 seconds A decline of 81 basis points yearon year. Reper for the year was up by 5% to 16:17 16 minutes, 17 seconds rupees 9226 million sorry reper for the year was up by 5% to 16:25 16 minutes, 25 seconds rupees 9226 for the quarter hospitality revenue rose 3% yearonear to rups 4740 million with 16:34 16 minutes, 34 seconds aa of rups 2248 million up 1% yearonearita 16:41 16 minutes, 41 seconds margin for the quarter stood at 47.4% 4% lower by 102 basis points. The moderation in margins is primarily 16:50 16 minutes, 50 seconds attributable to portfolio mix and stabilization dynamics. Our resort assets are at an early stage of 16:57 16 minutes, 57 seconds stabilization with average occupancy at around 43% for the year which we expect to trend towards 60% as these assets mature. 17:08 17 minutes, 8 seconds Additionally, the P&L currently absorbs cost related to incremental inventory at Bangaluru, which as highlighted in 17:15 17 minutes, 15 seconds earlier cause is a transitory impact and this shall normalize as occupancies ramp up over 17:23 17 minutes, 23 seconds the next few quarters. We remain focused on maintaining cost efficient operating structures, project productivity and 17:31 17 minutes, 31 seconds exercising disciplined asset level cost control as the portfolio scales. 17:36 17 minutes, 36 seconds Turning to the commercial real estate businesses, this segment continues to provide high margin stable cash flows 17:44 17 minutes, 44 seconds for the year. CR revenues grew 55% yearonear to rupees 3,61 million and 37% 17:51 17 minutes, 51 seconds yearonear to rupees 847 million for the quarter. The monthly rental exit run rate in March 26 stood at rupees 280 million. 18:02 18 minutes, 2 seconds On the profitability front, fullear AITA increased 65% yearonear to rupees 2544 18:10 18 minutes, 10 seconds million translating into a strong AITA margin of 83.1% mar 83.1%. 18:17 18 minutes, 17 seconds Quarterly AITA stood at rupees 708 million up 42% yearonear with an AITA margin of 83.6%. 18:26 18 minutes, 26 seconds Current portfolio committed is at approximately 88%. We expect monthly renters to scale up to rupees 300 million during FY27. 18:37 18 minutes, 37 seconds Commissioning of signness 2 at pai will lead to a step change in growth FY28 onwards. 18:45 18 minutes, 45 seconds Moving to residential project during the year we handed over 152 units resulting 18:51 18 minutes, 51 seconds in a revenue recognition of rupees 7383 million and a bit of rups 2728 19:00 19 minutes million to briefly refresh the project structure phase one residential has been completed with 152 units handed over and 19:09 19 minutes, 9 seconds one unit pending handing over phase 2 residential comprising 168 8 units is under development with handover expected in FI27. 19:20 19 minutes, 20 seconds The project also includes 1 lak 60,000 square ft of commercial space which is yet to be developed and will be leased post completion. 19:32 19 minutes, 32 seconds Now coming to balance sheet debt and capital allocation. 19:36 19 minutes, 36 seconds Uh over the last two years we have deployed approximately rupees 19 billion towards growth capex and acquisitions. 19:43 19 minutes, 43 seconds Despite this significant investment phase, net debt has reduced from rupees 25 billion as of March 24 to approximately 19 billion as of March 26. 19:54 19 minutes, 54 seconds While a portion of this deleveraging was supported by equity inflow in April 25, it is important to highlight that 20:01 20 minutes, 1 second approximately 15 billion has been funded through internal acrals reflecting the strength of our operating cash flows and 20:09 20 minutes, 9 seconds disciplined capital allocation. We continue to maintain comfortable liquidity position with a cash buffer of around rupees 4 billion as of year end. 20:19 20 minutes, 19 seconds The average cost of finance remains stable at 7.48% as of March 26. 20:26 20 minutes, 26 seconds From a capital deployment perspective, capital work in progress and assets not yielding returns stood at rupees 8.3 20:34 20 minutes, 34 seconds billion at year end providing visibility on near to medium-term growth. Looking ahead, we have outlined a plan capex of 20:42 20 minutes, 42 seconds approximately rupees 30 billion over FI27 to FI29 across our hospitality and commercial 20:51 20 minutes, 51 seconds real estate portfolio. This includes announced acquisition and committed investments and importantly is expected to be largely funded through internal 21:00 21 minutes acruals underscoring our focus on maintaining balance sheet discipline. We have also taken an enabling approval for debt raise of up to rupees 10 billion. 21:10 21 minutes, 10 seconds To clarify, this is purely enabling in nature and there is no immediate plan to raise incremental debt. 21:18 21 minutes, 18 seconds Overall, our balance sheet continues to provide adequate headroom and financial flexibility to pursue strategic 21:25 21 minutes, 25 seconds opportunities as they arise. The C portfolio with 2.4 4 million square ft² of leasable area has the potential to 21:33 21 minutes, 33 seconds generate rupees 3 to 4 billion of annual cash flows at stabilization combined with strong abita generation 21:40 21 minutes, 40 seconds from the hospitality business. This creates a robust and sustainable free cash flow base to support our long-term growth strategy. 21:50 21 minutes, 50 seconds With that, I would like to open the floor for questions. Thank you. 21:56 21 minutes, 56 seconds Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touchstone phone. 22:07 22 minutes, 7 seconds If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking 22:15 22 minutes, 15 seconds questions. In order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to only two per participant. 22:25 22 minutes, 25 seconds Should you have a follow-up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 22:37 22 minutes, 37 seconds The first question is from the line of Vikas Ahuja from Antic Stock Broking. Please go ahead. 22:44 22 minutes, 44 seconds Hi uh good morning to the management and thanks for taking my question. Uh so my first question is uh why did we choose 22:52 22 minutes, 52 seconds to do the subsidiary level dilution a dilution structure for dial instead of funding it entire entirely entirely 23:00 23 minutes through internal acquisition or maybe through debt. I mean uh for us uh this was a great deal we got uh and uh now we 23:08 23 minutes, 8 seconds are diluting stake it's a little confusing for me and what are the investors uh uh in coming in dial what 23:15 23 minutes, 15 seconds strategic value do they bring beyond capital uh any any color on this would be uh great and after that I have a 23:24 23 minutes, 24 seconds followup thank you uh morning Vicas thank you for the question uh look uh we are implementing 23:32 23 minutes, 32 seconds a number of projects at this stage and we have also announced some acquisitions recently as you're well aware in order to manage this growth in a very 23:40 23 minutes, 40 seconds calibrated manner. The board has approved a one-time proposal for a minority equity shareholding in just one of our projects. 23:48 23 minutes, 48 seconds So it is it is not something that we are sort of taking for the long term. It is for one of the projects. We have done it at Dial. It was it's a project under 23:57 23 minutes, 57 seconds execution as you're well aware. It is a great project. nothing has changed on the fundamentals of the project at all. 24:03 24 minutes, 3 seconds Uh this is one u strategic call that we have taken to fully understand this space is that that's all there is to it at this stage. 24:15 24 minutes, 15 seconds Uh okay thank you and and also you know uh given the large upcoming pipeline including you know the Hyderabad and the 24:22 24 minutes, 22 seconds dial higher ter go how should we think about uh you know annual capex intensity 24:29 24 minutes, 29 seconds over FY27 to 29 how much of this capeex upcoming should be funded through internal approvals versus uh internal 24:37 24 minutes, 37 seconds debt uh and what is the expected peak debt if we can you know I'm I I understand with dial also we are just trying to manage manage the debt levels 24:46 24 minutes, 46 seconds what we have done if if any peak debt guidance we can get would be great. 24:51 24 minutes, 51 seconds Yes. So Nathan actually referred to it in his speech in quite a lot of detail. 24:55 24 minutes, 55 seconds Uh just high level I'll give you then Nathan will give you more details. I mean he was he correctly pointed out that over the last two years we've 25:03 25 minutes, 3 seconds invested about 19 billion in capex and 15 billion of that came from internal approvals. You know the proof of the 25:10 25 minutes, 10 seconds pudding is in the fact that 25 billion was our debt earlier two years back. We are at 19 billion. So whilst we have 25:17 25 minutes, 17 seconds been investing in the cap, we have actually been reducing debt. So our internal acrals remains very strong. Our capital work in progress right now is 25:25 25 minutes, 25 seconds 8.3 billion something that is not yielding any output for us. U to in total we are expecting to invest about 25:33 25 minutes, 33 seconds 30 billion between FY 27 and 29. uh how we are going to fund it. Nathan will give you more a little bit more idea. Uh 25:42 25 minutes, 42 seconds look uh thanks Vicas. Uh look the same cash flow momentum will continue and uh and I don't see any you know major 25:50 25 minutes, 50 seconds capital which we going to draw from uh uh you know from the borrowings as such uh unless there is a very strategic 25:58 25 minutes, 58 seconds acquisition coming in our face. So for announced projects uh this entire 30 billion will be funded through internal acrals. Secondly, I also pointed out 26:06 26 minutes, 6 seconds that the CRA business, you know, the one project which is already in pipeline will start giving us results in FI2829. 26:14 26 minutes, 14 seconds So that's one big uh you know jump which will uh which we'll see from a CR business from a hospitality business we still have two assets which are in the 26:23 26 minutes, 23 seconds ramp up stage. You see a tha which has just launched in November 25. We are yet to see the complete results. Uh from uh 26:30 26 minutes, 30 seconds the FPS part they're launching a tha in in the next quarter. you still see a ramp up which is coming over there. 26:37 26 minutes, 37 seconds Bangalore 120 plus rooms we still see that effect on a beta coming in. So I am fairly confident that from uh the same 26:45 26 minutes, 45 seconds momentum you know from the cash flow will continue and we will be doing the efficient capital allocation as we have been doing in the recent past 26:53 26 minutes, 53 seconds and sorry just to add the the new commercial real estate that's coming up is also 900,000 square foot. So you know 27:00 27 minutes it's it's a it's a big development and that will be very value accreative for us in terms of cash flows. 27:07 27 minutes, 7 seconds Uh yes sir this is helpful. One final bookkeeping you know ADR uptick of 8% possible to get uh you know same store 27:15 27 minutes, 15 seconds number also you know can management share FI27 ADR outlook if we have any because you know with the outbound 27:23 27 minutes, 23 seconds international travel becoming expensive and domestic leisure demand improving uh do you think shalet city heavy marit 27:30 27 minutes, 30 seconds like portfolio would see relatively lower uh same store ADI versus the pier that's my final question sir thanks a 27:39 27 minutes, 39 seconds Uh no not really. We continue to believe in the strength of the business. In fact uh if you have heard the recent announcements from our our honorable 27:48 27 minutes, 48 seconds prime minister he spoken about encouraging more travel within uh within India. So it's it's it's a trend that we are closely watching out for. already I 27:57 27 minutes, 57 seconds think the Middle East image has taken a bit of a beating and therefore we actually expect the the the the 28:05 28 minutes, 5 seconds marriages to move from Middle East back to India. So actually we are expecting a strong recovery and bounce back in the 28:13 28 minutes, 13 seconds second half of the year broadly speaking. So we don't see any slowdown coming yet. 28:19 28 minutes, 19 seconds So my question was we are more corporate heavy versus you know some of your peers which are more leisure heavy. So you 28:26 28 minutes, 26 seconds know for example this quarter also our ref number I mean even the AR number was little lower than the peers. So I was trying to understand that whether that 28:34 28 minutes, 34 seconds trend you think will continue in the near term because you know flying to other countries have become become expensive but it's same it's it's vice 28:43 28 minutes, 43 seconds versa also right and we get our fit number is much higher than some of the others. So yeah, thanks. 28:52 28 minutes, 52 seconds So we hear you. It's not a it's not that it's a trend that we don't look for, but we don't see any slowing down in particular for any of these reasons. 29:00 29 minutes Yes, we are a bit uh business heavy, but we are also been diversifying our portfolio into the leisure side. So we are uh we are absolutely in a good space with respect to all of this I think. 29:12 29 minutes, 12 seconds Okay sir. Thank you. Wish you luck for the next quarter. Thank you. 29:16 29 minutes, 16 seconds Thank you. The next question is from the line of Sumit Senna from Mquari. Please go ahead. 29:23 29 minutes, 23 seconds Yes, thank you. So, I had a couple of questions kind of going deeper into the previous one. Um, clearly domestic travel has picked up and hopefully it'll 29:31 29 minutes, 31 seconds continue to gain momentum uh uh especially over the summer. Can you talk about sort of uh uh you know what what 29:40 29 minutes, 40 seconds initial trends you are seeing uh in terms of spend um you know especially in the context of was the statement that you made earlier where foreign travelers 29:48 29 minutes, 48 seconds tend to um travel with other people uh especially domestic executives and that so there's a multiplier effect there. So 29:56 29 minutes, 56 seconds uh so that is one question. My second is in terms of commercial leasing. Um you know you're saying that it'll be totally 30:04 30 minutes, 4 seconds leased out by fiscal 28. Uh any reason it's it could take that long or what's the hold up? I know in the past that you've spoken about that you were 30:12 30 minutes, 12 seconds careful about the quality of the counterparty there. Is that uh is that the reason or is the Bangalore market 30:20 30 minutes, 20 seconds seeing any sort of uh uh different sort of macro impact? 30:27 30 minutes, 27 seconds Okay. Uh let me take the questions in in in the two parts. On the commercial leasing side, actually we have had a 30:34 30 minutes, 34 seconds very decent pickup on on Bangalore. Uh I think we have now upped our occupancy to nearly how much we 91% in in Bangalore. 30:45 30 minutes, 45 seconds So so I think we have made good progress there and actually part of our comment on the leasing was for Sigmas 2. It was 30:52 30 minutes, 52 seconds not for our existing inventory. our existing inventory is is is nearly is above 90% occupancy right now. So you 31:00 31 minutes know we can we I I suspect that we can only we only have a 10% play there. So there's and and if you see our exit has 31:08 31 minutes, 8 seconds almost reached the 30 cr uh the 30 cr per month mark. So I think on the on the leasing side we are doing fairly well with the recent pickup. Our occupancies have improved quite dramatically. 31:19 31 minutes, 19 seconds With respect to foreign tourist arrivals, of course, there is there is a geopolitical tension that is unre that is unresolved as we speak and it continues to be a space that we monitor. 31:29 31 minutes, 29 seconds But we have pivoted during this period. 31:32 31 minutes, 32 seconds Uh we have closely monitored uh this trend and therefore gone back to some of our corporates uh with with more favorable rates and better better offer. 31:43 31 minutes, 43 seconds Uh and therefore we have upped the game on that. We have also looked at the crew segment and and increased our base occupancies by bringing them in wherever 31:51 31 minutes, 51 seconds possible. So it's it's as I said you know we are monitoring this trend closely. Uh we expect it all to return very quickly after the tensions subside. 32:01 32 minutes, 1 second Uh on the leisure side uh there seems to be no stopping. People continue to want to travel. Our our leisure portfolio is 32:09 32 minutes, 9 seconds doing very well and uh with uh Ativa Kandala in particular we are still stabilizing. So you know the growth 32:16 32 minutes, 16 seconds potential on that is very very substantial for this year. Got it. Thank you. 32:25 32 minutes, 25 seconds Thank you. 32:27 32 minutes, 27 seconds We'll take the next question from the line of Pratik Kumar from Jeff. Please go ahead. 32:35 32 minutes, 35 seconds Yeah. Good morning. Uh morning sir. Uh my first question is on your uh quarter. 32:41 32 minutes, 41 seconds Can you split your quarter like on a month-wise basis partly discussing March so because your repar of minus 3% 32:49 32 minutes, 49 seconds compares to 6 to 8% for peers uh so what specifically have hurt you more and how is your march performance and then maybe 32:57 32 minutes, 57 seconds how on the net basis uh things have I don't know if it has improved in April May or how are they shaping up 33:07 33 minutes, 7 seconds okay good question though even though the question hurts us but it's still a good question. Uh let me we actually in my speech I referred to a very steady 33:16 33 minutes, 16 seconds January for the reasons that Mumbai was not uh marked because of uh elections uh 33:24 33 minutes, 24 seconds the municipal elections and a long weekend which sort of stunted the growth in Mumbai. February was very strong 33:30 33 minutes, 30 seconds across the board. In fact our south hotel some of our south hotels were upward of 35% growth year on year. So 33:38 33 minutes, 38 seconds you know we the structural uh demand there's nothing wrong with it that continues to be uh uh very strong and 33:46 33 minutes, 46 seconds shalet if you look at chalet's performance throughout our strength has always been foreign tourists and and and they're brilliant they stay longer they 33:54 33 minutes, 54 seconds consume big uh more FNB they stay around the hotel and uh and they tend to pay high they have higher permium so they 34:01 34 minutes, 1 second pay us better in the south hotels particularly in in uh in March What we witnessed was a dramatic uh amount of 34:10 34 minutes, 10 seconds cancellations. Just to give you a number, we lost almost 9,000 room nights uh from foreign tourist arrivals and some attached business as I as I had 34:19 34 minutes, 19 seconds referred to in my speech from the domestic side which was a much smaller number but still an attached number. 34:24 34 minutes, 24 seconds Overall, I think uh the the political tensions have caused about a 10 to 12% disruption in our business. If that 34:32 34 minutes, 32 seconds hadn't happened, I think we would have been really strong. uh when you compare us to our peers, you have to also sort of look at the fact that our portfolio 34:41 34 minutes, 41 seconds is where it is and given that portfolio we have had great days and this was an unfortunate quarter from our perspective where we were in a micro market which 34:49 34 minutes, 49 seconds was not very strong but that tends to change. These are short-term uh trends. 34:54 34 minutes, 54 seconds uh fundamentally Mumbai is still one of the strongest markets this country has and uh and the fact that there is such demand uh there are such barriers to 35:03 35 minutes, 3 seconds entry we will be continue to operate we'll be continuing to operate in a very very strong market I think 35:12 35 minutes, 12 seconds and how this trend move like of foreign tourist arrives of the mix uh in April May have this significantly improved or 35:21 35 minutes, 21 seconds how's that changed so you know It's it's it's not a good idea to just look at percentages. We heard a lot of our peers talk about just 35:29 35 minutes, 29 seconds percentages because you know percentages can be misleading when the overall demand itself has dropped. Uh so the way to look at it is the real loss in room 35:38 35 minutes, 38 seconds nights and as I said just for March alone we lost about uh 9,000 room nights from foreign tourist arrivals. It has 35:46 35 minutes, 46 seconds become a bit better. April has been stronger and actually has surprised us also on a year-on-year trend. and May is 35:54 35 minutes, 54 seconds really strong. But to give you that uh a full picture, May last year at this time was very weak because of operation syndex. 36:16 36 minutes, 16 seconds So this year we ended up doing capex of 400 cr uh versus like uh around 800 to 900 cr expectation I think which we generally were guiding. 36:27 36 minutes, 27 seconds So Kumar can you please rejoin the queue for follow-ups please we have a queue sir. 36:34 36 minutes, 34 seconds Thank you ladies and gentlemen we would request all the participants to kindly limit their questions to only one per participant as we have a long queue for 36:43 36 minutes, 43 seconds questions. Thank you. The next question is from the line of Akash Gupta from Namura. Please go ahead. 36:50 36 minutes, 50 seconds Hi, am I audible? Yes sir, please proceed. 36:54 36 minutes, 54 seconds Uh hi. Uh so congrats on great performance uh for the quarter. Uh so my question number one is uh that we have 37:03 37 minutes, 3 seconds multiple hotels which are beating stabilization phase in FI27. 37:10 37 minutes, 10 seconds uh and then we also have introduced uh we have done new acquisitions over the past 2 years. I just wanted a quick 37:17 37 minutes, 17 seconds summary on like where are we in the stabilization phase of each of the hotels and how should we look at that by 37:25 37 minutes, 25 seconds FI27 end. Uh that's my first question. Thank you Akash. I really like you. 37:33 37 minutes, 33 seconds You're the first one who's acknowledged a good performance. Um just to sort of talk about our portfolio, let me break it down. Let's take the easy one first. 37:43 37 minutes, 43 seconds We have added 129 rooms to Bangalore and as Nithan keeps pointing out a 129 room addition is like adding a whole new 37:51 37 minutes, 51 seconds hotel. So that is still picking up and therefore you must have seen an occupancy drop overall in Bangalore. Uh but that's because we are still 37:59 37 minutes, 59 seconds absorbing the new set of rooms. Uh it came at a time where there was geopolitical headwind. So the timing was not great in in in hindsight. Uh but we 38:09 38 minutes, 9 seconds still believe that by becoming one of the largest hotels in that micro market, we are going to uh sort of gain from from the inventory size and and quickly 38:17 38 minutes, 17 seconds rebound to a 60% occupancy. So there is a big headroom that's coming from Bangalore very clearly. 38:24 38 minutes, 24 seconds Moving on, um Aiva Kandala is only entering its first proper operational year. uh and with the positioning that 38:33 38 minutes, 33 seconds we have managed to do for it uh with ADRs north of 15,000 we believe that there is a very strong potential of 38:41 38 minutes, 41 seconds growth there in this year and in the coming two to three years therefore you know we can expect a very very good uh 38:49 38 minutes, 49 seconds sort of performance coming from there on the customer side it we have had excellent feedback uh very well received 38:56 38 minutes, 56 seconds uh and and that's something that we have been actually working on very consciously and spending a lot of marketing dollars 39:03 39 minutes, 3 seconds on uh and uh that seems to have worked because most almost every feedback that we have had is is brilliant and our 39:11 39 minutes, 11 seconds rating is over 4.9 on Trip Advisor. So very good performance there from that hotel. FPS which we are uh which we are 39:19 39 minutes, 19 seconds rebranding to AIA will also see a big upside uh mainly because that market has become stronger in in that area with the 39:28 39 minutes, 28 seconds opening of the new airport but also the fact that we have invested close to 100 crores in that property completely gutting it out and and rebuilding it 39:36 39 minutes, 36 seconds from scratch. Our projects team has done a brilliant job. It's a Hersh bender design and what has come out as a product is absolutely beautiful and we 39:44 39 minutes, 44 seconds expect that to again have a very strong impact overall on the portfolio in terms of growth. Looking at our other two 39:51 39 minutes, 51 seconds resorts uh Rishiesh had a uh Western Rishies had a very difficult year last year with operation Sindur and the fact 39:59 39 minutes, 59 seconds that we had monsoons. So on a low base a stabilizing hotel is expected to give a 40:06 40 minutes, 6 seconds very good growth over last year. Uh our courtyard at Aavali which has now been rebranded to Marriott Aaliy should also 40:16 40 minutes, 16 seconds have a significant upside given that there is a clear brand uptick on it and uh Delhi NCR being a very brand 40:23 40 minutes, 23 seconds conscious market we expect the rates to go up as a result. So overall we have multiple opportunities. There have been FNB outlets that we have opened which 40:32 40 minutes, 32 seconds are not stabilized. Those are also growth uh engines. There are a few additions that we are doing through our asset sweating route which we will keep 40:40 40 minutes, 40 seconds announcing in subsequent quarters. So there's a lot of work that's going on within the portfolio which should give us significant upside overall. 40:50 40 minutes, 50 seconds That's it. Uh thank you for that answer. 40:53 40 minutes, 53 seconds So my second question is your two acquisitions uh the Udaur and the Hyderabad one. Um 41:00 41 minutes sir could you give us an understanding as to how you are thinking about those two micro markets and second is uh what 41:07 41 minutes, 7 seconds kind of IRRs have you uh baked in into the calculations for these numbers and 41:14 41 minutes, 14 seconds what kind of ADR growth rates have you baked in for these IRS? Thank you so much. 41:21 41 minutes, 21 seconds Look, our stated stated strategy on development has always been very clear. 41:26 41 minutes, 26 seconds We want to be putting up big boxes, taking large concentrated bets in in uh in key markets just ahead of the 41:33 41 minutes, 33 seconds infrastructure curve. Uh on the leisure side, we have decid we we have always said that we wanted to diversify our portfolio to get to at least 20% of our 41:42 41 minutes, 42 seconds revenue from the leisure segment. and leisure we define as drivable distance which is about an hour hour and a half 41:50 41 minutes, 50 seconds from a key airport. Besides this we have also said that we will look at some deep 41:57 41 minutes, 57 seconds uh markets in leisure such as Goa uh Udapur Jaipur etc. So it has always been 42:04 42 minutes, 4 seconds our stated strategy to go to these markets and we have taken a very proactive approach to our development strategy. Having said that coming to 42:12 42 minutes, 12 seconds Udapur, we have always believed Udaur is a deep market. Uh if you look at our acquisitions more recently, we have 42:20 42 minutes, 20 seconds basically focused on reducing the land to launch risk. While green field is our strength and continues to stay our strength, we believe that the maximum 42:28 42 minutes, 28 seconds value resides in turning around opportunities such as Udapur where we are taking up a resort and actually gut 42:36 42 minutes, 36 seconds re gutting it completely and and refurbishing it to a much higher level and positioning uh AI coming from Dukes 42:44 42 minutes, 44 seconds is a classic example of that. We see Udapur similarly. Uh all segments are firing in Udapur today and continue to 42:52 42 minutes, 52 seconds do so. A classic example is the issues that the world faced right now with the geopolitical tensions. Actually Udaur 43:00 43 minutes gained overall uh because those marriages came back to Udapur uh from being destination weddings outside the country. So Udaur strong continues to 43:09 43 minutes, 9 seconds stay strong. We have taken up a a case where we can actually make refurbishment and reposition. Hyderabad has been on 43:16 43 minutes, 16 seconds fire for a long time and that particular micro market we love because we have 13 million square foot of our own office space uh there in that micro market from 43:25 43 minutes, 25 seconds our sister concerned mind space. Um we already have two hotels there in the two west. This is a third taking full 43:32 43 minutes, 32 seconds advantage of the cluster giving us a new position point also and give us an advantage so that we can actually start 43:39 43 minutes, 39 seconds to dictate the price in that market. uh taking it on lease uh from mind spaces I think is also a brilliant strategy 43:47 43 minutes, 47 seconds because it actually lowers our capex burden uh to the extent of the warm shell and also backends our uh our fit 43:55 43 minutes, 55 seconds fitment cost on the capex side and you know we have publicly spoken of a 560 million uh capex overall but there are 44:03 44 minutes, 3 seconds two things that I want to remind you all first of all it'll be backended second of all it also includes about 40,000 square foot of commercial space the cost of which is also built into that capex. 44:14 44 minutes, 14 seconds So you know we continue to remain very efficient when it comes to the capex side. We believe that that market is really strong and will continue to grow. 44:22 44 minutes, 22 seconds In fact we don't mind looking at a few more hotels in and around financial district of Hyderabad. Also the the GCC 44:30 44 minutes, 30 seconds story of India is very clear. There have been multiple articles recently that you must have seen. Everything seems to have grown in that sector and India continues 44:38 44 minutes, 38 seconds to be very strong and that's a that's something that we have complete trust and faith in. Understood sir. Thank you so much. 44:47 44 minutes, 47 seconds Oh sorry one second. Sorry one apologies. It's not 560 million. It's 560 crores. I missed a zero. 44:57 44 minutes, 57 seconds I wish it was 560 million. Okay. 45:04 45 minutes, 4 seconds Thank you. A request to all the participants to kindly restrict their questions to only one. Should you have a follow-up question, please rejoin the 45:12 45 minutes, 12 seconds queue. We'll take the next question from the line of Adid Chhatadada from ICICI Securities. Please go ahead. 45:21 45 minutes, 21 seconds Yes, I'll try I'll just squeeze in my questions in one shot. Uh sir, first is just the accounting thing on the capital WIP of more than 800 crores. Where does 45:29 45 minutes, 29 seconds this sit on the balance sheet as of March 26? because the capital WIP number looks just uh north of 100 crores. If you could just clarify on that and other 45:38 45 minutes, 38 seconds question is on our Bombay hotels the operation was the Weston and the four points which is getting converted into Akiva now if you could just help us you 45:47 45 minutes, 47 seconds alluded in your opening remarks that occupancy has been impacted a bit by the sign tower to construction. So 27 what 45:54 45 minutes, 54 seconds is the outlook on occupancy considering this and with the AIA rebranding in Washi how do you see the occupancy 46:02 46 minutes, 2 seconds trending in the year 27 yeah that's it those are the questions to my side but we have lost track of the questions but Nitan will start with the capex 46:10 46 minutes, 10 seconds question and then we'll jump in for the other parts please so so the 800 crores actually sits uh you know from an accounting balance 46:19 46 minutes, 19 seconds sheet perspective in three segments uh so one is of course the direct CWIP. The second is if you see the notes two 46:25 46 minutes, 25 seconds accounts, it actually sits in IPU which is around 486 cr. The CIP CIP pure number is 132 crores and balance is 46:34 46 minutes, 34 seconds actually lying under inventory which is around 269. So if you add that up that comes to around 800 crores. Okay. 46:42 46 minutes, 42 seconds Yeah. 46:44 46 minutes, 44 seconds So should I repeat my question or no let's let me let me just deal with the Akiva question first uh at FPS that 46:55 46 minutes, 55 seconds market is I mean that market has always been strong we have always been a a leader in that market uh and by a very 47:01 47 minutes, 1 second very long margin. We actually chose this opportunity to invest significantly in that property because we wanted to 47:09 47 minutes, 9 seconds rebrand it at at a higher level. uh uh for our brand and therefore we made that 47:16 47 minutes, 16 seconds investment. Uh we don't see any slowing down in that market. In fact, we expect that market to be growing quite rapidly 47:23 47 minutes, 23 seconds and I think our timing of launch on that market has been quite fortuitous. 47:28 47 minutes, 28 seconds Doesn't always happen like that. But in this case, we have managed to time it quite well is my belief. Coming to 47:34 47 minutes, 34 seconds Hawaii, I think uh we did mention that there is a short-term stress on the occupancy side because we have an under construction commercial building there. 47:44 47 minutes, 44 seconds The stress is coming for two three because of two three factors. One is the crew doesn't like the noise. They like to sleep in odd hours of the day as and 47:52 47 minutes, 52 seconds when their flights come in. So we've had some crew that has left us. We have managed to retain some of them in JW Sahar. Uh but we have still had a net 48:01 48 minutes, 1 second outflow on that. Secondly, we have lost the porch of the of the banquet space mainly because uh there was a 48:10 48 minutes, 10 seconds connectivity at the at the basement level with the buildings building next door that's under construction. Uh we 48:18 48 minutes, 18 seconds are rapidly closing that out and we should be able to close it out fully and significantly in the next quarter post 48:25 48 minutes, 25 seconds which we expect our uh mice and social business to resume back to business as usual. Did I did I answer all your questions or did I miss something? 48:35 48 minutes, 35 seconds No. So that is I think fairly clear. So broadly to take away 27 these things should get ironed out at least that 48:44 48 minutes, 44 seconds can you please rejoin the queue. Sir, we have a long fine. 48:50 48 minutes, 50 seconds Thank you. I would request all the participants to kindly limit their questions to only one. Please rejoin the queue for follow-up questions. We'll 48:58 48 minutes, 58 seconds take the next question from Karan Kana from Amber Capital. Please go ahead. 49:02 49 minutes, 2 seconds Yeah. Hi, thanks and uh just two quick questions. Firstly, in terms of uh the guidance for pipeline addition for FI27 49:09 49 minutes, 9 seconds given that you've already crossed 5,000 uh keys which was the guidance at the start of the year. So how should we think about that uh going into FI27 and 49:17 49 minutes, 17 seconds which segment will it be more leisure or business? So that's question number one and secondly just a clarification on Ritzkart in Hyderabad. Is the capex 49:25 49 minutes, 25 seconds numbers 560 crores uh which is as per the presentation or 630 crores as per the press release and is it safe to assume uh you know 25,000 AR and 80% 49:35 49 minutes, 35 seconds stabilized occupancy and uh you know by when can we expect stabilization of this hotel and just to follow up on this what 49:41 49 minutes, 41 seconds can be the lease payments more like 15% lease payment to mine space rate or will it be higher and in that context what kind of margins are you expecting for 49:50 49 minutes, 50 seconds this project right by the time you got to your second question. I've forgotten the first one. 49:56 49 minutes, 56 seconds So, let me deal with the second one first. Kar. So, um the the one in Hyderabad is 560 crores of capex. When 50:04 50 minutes, 4 seconds we had reported it in the press, we had actually done the right thing by adding IDC and and lease deposit and therefore that had added up to 630. 50:16 50 minutes, 16 seconds uh we realized that the market didn't interpret it that way and hence we wanted to clarify this that the pure construction cost that's going into the 50:23 50 minutes, 23 seconds building is 560 crores with including 40,000 foot of commercial space. So it is still very very efficient probably at 50:32 50 minutes, 32 seconds the top end of of capex deployment in that in that uh price positioning of the hotel. Coming to the uh to the uh price 50:41 50 minutes, 41 seconds positioning uh we 25,000 should we expect 25,000 I think quite easily today the market at the top end is driven by 50:49 50 minutes, 49 seconds ITC and we know that they are fairly in that region already if not higher than that so there is no reason for us not to 50:56 50 minutes, 56 seconds expect that kind of pricing from a from a hotel which will be brand new and probably much superior to the comp set there so that's that's the second part 51:05 51 minutes, 5 seconds of the conversation karan from a direction perspective I think we normally don't give uh you know future directions in a very specific 51:14 51 minutes, 14 seconds property and this is again a capex which is a backended I would suggest uh you know to keep this information up to this level only 51:22 51 minutes, 22 seconds sure and on the pipeline for fi27 shitank how does that look like is there a guidance you to lay out for that 51:29 51 minutes, 29 seconds yeah so look I hope you like our expansion plans because we are now up to 1655 taking up to over 5,000 keys So I 51:38 51 minutes, 38 seconds think we are probably amongst the best in the market with when it comes to to the growth cycle. Secondly, are we going to stop there is your main question. 51:47 51 minutes, 47 seconds Absolutely not. Uh we continue to be in a growth phase. Uh as a company we love our group and sister companies as well. 51:55 51 minutes, 55 seconds So so we we tend to work with them uh for a while. It just helps us to follow the commercial development. It just 52:02 52 minutes, 2 seconds gives us captive demand and and almost ensures that we start on a very very strong base as soon as uh you know we 52:10 52 minutes, 10 seconds come to the opening. So overall we love expansion. We going to continue to expand. What are we going to do in terms 52:17 52 minutes, 17 seconds of what kind of assets? We continue to be very efficient on the green field. We love conversions because we know that we 52:23 52 minutes, 23 seconds can uh we can sort of reduce the risk on land to launch and get a higher return on our capex employed overall. But we 52:31 52 minutes, 31 seconds would also not stop at acquiring good hotels like the Western Rishies or the or the Marriott in Araiali uh because we 52:38 52 minutes, 38 seconds know that uh it significantly reduces the execution risk uh for us uh overall and gets us to cash flows very quickly. 52:48 52 minutes, 48 seconds Thank you sir. A request to all the participants to kindly not to club the questions and restrict themselves to 52:55 52 minutes, 55 seconds only one question per participant. The next question is from the line of Achil Kumar from HSBC. Please go ahead. 53:03 53 minutes, 3 seconds Yeah. Hi. Um, thanks for taking my question. Um, I'm so sorry. I have two very quickly. So, one, um, you know, I want to understand about uh the impact. 53:12 53 minutes, 12 seconds So, you highlighted that you lost 9,000 rooms, but that's all from foreign tourist arrivals. How do you see the domestic I mean because everybody's 53:20 53 minutes, 20 seconds talking about the domestic replaced international. So um how do you see the domestic demand and do you see the domestic corporate events are actually 53:28 53 minutes, 28 seconds increasing them they're not cancelling so how should we think about that and you must be talking to your corporates how do you see that business um you know 53:35 53 minutes, 35 seconds so that is first question secondly on the strategy about the growth you highlighted that you are expanding um you know beyond business hotel so you 53:44 53 minutes, 44 seconds are expanding luxury and you said 20% you you decided to go to 20% at least um or or maintain 20% lux luxury side but I 53:51 53 minutes, 51 seconds mean you know I If you see the GCC growth, I think a lot of GC growth is coming tier two, tier three cities, Jaipur, Coadur and all. So is your 53:59 53 minutes, 59 seconds strategy still remains uh limited to expansion in these known cities or um you are sort of open and then you plan 54:06 54 minutes, 6 seconds to grow in other cities where you see a lot of business coming through in the GCC and even in the leisure. Thanks. 54:14 54 minutes, 14 seconds So uh sorry just to clarify we didn't say luxury we said 20% in the leisure segment. Sorry, sorry, my bad. 54:22 54 minutes, 22 seconds No, no, that I just wanted to clarify that because you know um that's luxury is not something that we want to get to 20% in terms of our growth. As I said, 54:31 54 minutes, 31 seconds we our strategy is very well stated. We are not going to mend what is not broken. Uh the strategy is working brilliantly for us. We will go to 54:39 54 minutes, 39 seconds leisure spaces uh deep markets but we will continue to expand in the in the key in the key markets uh just ahead of 54:48 54 minutes, 48 seconds the infrastructure curve with large big boxes because we know that the unit economics on them is brilliant and therefore if you see our industry-leading aida margins comes from 54:57 54 minutes, 57 seconds the facts that these are big boxes with you know very efficient operations and a brilliant asset management team to back up all of that. So, so uh so hence we 55:06 55 minutes, 6 seconds will continue to grow and continue to grow in a in a in a diversified manner as we have said before in what was your 55:13 55 minutes, 13 seconds first question Achel Achel on uh was it on what was the other question you had sorry it slipped my mind 55:21 55 minutes, 21 seconds uh sir Achel has left the queue um maybe he'll get back to us later we'll move on to the next question from the line of 55:29 55 minutes, 29 seconds Deepak Saha from Ashika Institutional Equities please go ahead Thanks for the opportunity. Just uh one 55:37 55 minutes, 37 seconds question sir if you see the last three quarters trend uh the divergence between repar and room revenue right in this quarter minus 3% repar leading to 4% 55:46 55 minutes, 46 seconds kind of a room revenue growth. Uh so under normal course of business uh given the last year base was also very low if you're able to pull off mid single digit 55:54 55 minutes, 54 seconds high single digit kind of a repar growth can we try to assume that that can culminate into double digit kind of a mid double digit kind of a room revenue 56:02 56 minutes, 2 seconds growth at least by 27 yeah abs I mean I this is the shortest 56:09 56 minutes, 9 seconds answer I'll give today absolutely perfect sir last one on the lease side any risk from uh work from home point of 56:17 56 minutes, 17 seconds view in terms of incremental uh signing uh that is uh possible. 56:24 56 minutes, 24 seconds Sorry didn't I couldn't hear the question. I'm saying I'm saying on the on the commercial side as far as incremental signings are concerned uh 56:32 56 minutes, 32 seconds given the commentary that have come from the senior leadership I understand long-term we are secure but uh in terms of incremental signings on the 56:40 56 minutes, 40 seconds commercial annuality uh do we see any moderation risk u on the commercial annity side? 56:47 56 minutes, 47 seconds No no not at all. In fact, if anything, our demand side has gone up and quite significantly. And and while at Shalet, 56:55 56 minutes, 55 seconds we understand the space, the group understands the space even better. And if you see the growth of mind space, you'll realize it's it just continues to 57:02 57 minutes, 2 seconds grow. The GCC story is as there was a recent article also on Times of India, if you have seen everything seems to 57:08 57 minutes, 8 seconds have nearly grown at 30 32% uh on uh in the last 3 to four years on the PCC 57:16 57 minutes, 16 seconds space. So it's a space that's really growing. We don't see any slowing down on that. 57:22 57 minutes, 22 seconds Thank you. The next question is from the line of Abbec Han from Access Capital. Please go ahead. 57:29 57 minutes, 29 seconds Yeah. Hi. Hi Shang and Nan and thank you for the opportunity. Uh so just one question on the margin side. So uh even in FI26 we saw that uh there was some slip uh in the hospitality a bit margin. 57:41 57 minutes, 41 seconds uh and going forward if we are expecting incremental occupancy to come more uh from domestic uh versus international uh 57:50 57 minutes, 50 seconds how are we looking at the margin outlook in FYI 27 and 28 and uh what are the strategies that uh shalet as a unit can take to uh to increase that. 58:01 58 minutes, 1 second See look if you see historically our margins have been absolutely at the top end of the industry and it continues to stay there. What we need to realize is 58:10 58 minutes, 10 seconds that for the city hotels, we are not not likely to significantly grow the margin percentage. We have we are pretty much 58:17 58 minutes, 17 seconds at a stable point where the flow through is equal to the margin. So you can't grow the margin at that point even mathematically. So they will continue to 58:25 58 minutes, 25 seconds remain stable and that will be our key challenge and our asset management team's key challenge to keep that margin stable. But on the leisure side, we 58:34 58 minutes, 34 seconds still have some growth because there is a there is uh we are not stabilized on the margins in our leisure portfolio and 58:41 58 minutes, 41 seconds we expect to that to grow to at least mid40s uh thereby overall continuing to grow the the the margins of uh uh the 58:50 58 minutes, 50 seconds margins of the of the portfolio. Don't forget we have a little bit of a scope on the CR side also uh because our margins are at I think 83 84% right now. 59:01 59 minutes, 1 second So there is some growth that we can bring from there. Don't forget that we had also mentioned asset sweating and asset sweating is very central to how we 59:10 59 minutes, 10 seconds look at our existing business. uh we will continue to add new revenue generating areas where they don't didn't 59:17 59 minutes, 17 seconds exist before and therefore we will continue to see a margin expansion as well as a growth uh overall on the revenue side. 59:27 59 minutes, 27 seconds Thank you. 59:29 59 minutes, 29 seconds In addition to that, there was also a Bangalore ramp up you know we have added 121 rooms which also will you know kind 59:36 59 minutes, 36 seconds of impact our margins and once the complete ramp up happens that also will uh you know stabilize our you know EITA margins. 59:48 59 minutes, 48 seconds Thank you. The next question is from the line of Janesh Jooshi from PL Capital. Please go ahead. 59:54 59 minutes, 54 seconds Uh yeah uh thanks for the opportunity. 59:57 59 minutes, 57 seconds Uh sir my question is on uh dial uh while you highlighted that uh this is a one-time uh proposal for one project. Uh 1:00:06 1 hour, 6 seconds but just wanted to understand uh this uh decision a bit better. Uh basically this is a airport hotel you have t as a 1:00:14 1 hour, 14 seconds branding partner. Uh so so that means that the scale up can be uh much faster in the first year itself. Then in in 1:00:22 1 hour, 22 seconds such a scenario why choose to dilute why not take a a debt and fund the keep of that particular hotel. Uh so yeah that's 1:00:30 1 hour, 30 seconds that's question one. I just wanted to know the thought over here. Sorry Jes can you repeat your question? 1:00:38 1 hour, 38 seconds We were losing you in between us. 1:00:41 1 hour, 41 seconds Why why choose an equity partner in dial rather than finding the capex via debt? 1:00:47 1 hour, 47 seconds because this is the airport hotel uh occupancies can be very healthy in the first year itself. So wanted to know the 1:00:54 1 hour, 54 seconds reason behind dilution versus uh uh debt funding. 1:01:00 1 hour, 1 minute No, so this is not a capital decision for us Janesh. Let me clarify that this was not a capital decision. We are 1:01:06 1 hour, 1 minute, 6 seconds trying out a a project level partnership something that we have not tried before. 1:01:11 1 hour, 1 minute, 11 seconds We're just trying to figure out how this works. You have already seen the strength of our balance sheet. It's not that we are looking or scrolling for capital right now. So it's not a capital decision just for clarity. 1:01:24 1 hour, 1 minute, 24 seconds Thank you. We'll take the next question from the lineup and this will be the last question for today. Due to posity of time 1:01:32 1 hour, 1 minute, 32 seconds Pavaskkar from ICICI direct, please go ahead. Yeah. Uh thanks for the opportunity. 1:01:38 1 hour, 1 minute, 38 seconds Congrats for resilient performance. And I will just ask the question which earlier participant was trying to ask on 1:01:45 1 hour, 1 minute, 45 seconds the demand side. Uh sir you mentioned in your initial comment that we have witnessed cancellation on the quadrant tourist arrival in terms of uh digs. 1:01:54 1 hour, 1 minute, 54 seconds uh what we are trying to understand is that if this uh you know scenario continues global uncertainties continue I'm not talking from the quarter one 1:02:02 1 hour, 2 minutes, 2 seconds perspective I'm talking from the entire p your perspective uh Q1 might be good for us because the base was low but if 1:02:09 1 hour, 2 minutes, 9 seconds this uh you know uncertainties continues so from domestic uh you know corporate cancellation point of view or if there 1:02:16 1 hour, 2 minutes, 16 seconds are any cancellations going ahead since even government is also trying to emphasize more on uh you know uh online 1:02:24 1 hour, 2 minutes, 24 seconds meetings or work from home kind of a scenario and if corporate tries to reduce on their uh travel cost going ahead. So in that context is there any 1:02:34 1 hour, 2 minutes, 34 seconds risk of cancellation from the domestic uh you know corporate travel point of view and if uh you know if this is first 1:02:42 1 hour, 2 minutes, 42 seconds part of the question second part to it is that are we uh like whatever uh you know steps you talking about or the upside risk we have in terms of the 1:02:50 1 hour, 2 minutes, 50 seconds leisure properties or you know the rooms coming uh occupancies at Bangalore new rooms getting uh uh into that will 1:02:59 1 hour, 2 minutes, 59 seconds mitigate whatever the risk we can talking about. 1:03:05 1 hour, 3 minutes, 5 seconds Hi Kam, this is Gorv. Uh uh I'm answering this on behalf of the team here. Uh you know from from a perspective of what Shaman just touched 1:03:13 1 hour, 3 minutes, 13 seconds upon the international traveler we did have a decline in the numbers that was shared to you approximately 9,000 in 1:03:20 1 hour, 3 minutes, 20 seconds just the month uh of March. Uh but when we look at the domestic traveler so to speak uh we've had no decline uh 1:03:27 1 hour, 3 minutes, 27 seconds principally in the in in the entire portfolio. uh we believe that uh given that uh uh there is more scope of 1:03:35 1 hour, 3 minutes, 35 seconds opportunity available in the portfolio now with the occupancy availability we'll be able to you know use that space 1:03:42 1 hour, 3 minutes, 42 seconds available uh by correcting our segments towards driving the occupancy upwards. 1:03:48 1 hour, 3 minutes, 48 seconds uh when we speak of correcting a segment, it is essentially looking at segments which we otherwise may have restricted uh given that we had uh 1:03:56 1 hour, 3 minutes, 56 seconds international business coming in uh largely like groups mice uh that could have been restricted in larger size. Uh 1:04:03 1 hour, 4 minutes, 3 seconds if I was to give a perspective of that as a number, we've seen an upward trend of almost 10% on our group segment uh 1:04:10 1 hour, 4 minutes, 10 seconds moving from 20 to 22% of the entire business segment just in the last month alone. uh and these corrections will 1:04:18 1 hour, 4 minutes, 18 seconds allow us to be able to move our segmentation driving domestic demand upwards. 1:04:25 1 hour, 4 minutes, 25 seconds Thank you sir. As that was the last question, I now hand the conference back to Mr. Shang Singh for closing comments. 1:04:33 1 hour, 4 minutes, 33 seconds Thank you and over to you sir. 1:04:36 1 hour, 4 minutes, 36 seconds Yeah. Uh thank you so much. Uh I understand there was a still a long queue of questions and it got we we missed some of the people. Please feel 1:04:44 1 hour, 4 minutes, 44 seconds free to write to Deepak uh who heads investor relations for us. Uh we'll be very happy to answer your questions separately. Uh as always we appreciate your insightful suggestions and queries. 1:04:56 1 hour, 4 minutes, 56 seconds We hope we have been able to respond to all your queries in case you need any further clarification or insights on our business. Please contact Deepak once again and he will be able to help you. 1:05:07 1 hour, 5 minutes, 7 seconds Good day and thank you so much. 1:05:10 1 hour, 5 minutes, 10 seconds Thank you members of the management. On behalf of Shalet Hotels Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you.