Apeejay Surrendra Park Hotels Limited (PARKHOTELS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the earnings conference call of Apeejay Surrendra Park Hotels Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Devrishi Singh from CDR India. Thank you, and over to you, Mr. Singh.

Thank you, Neerav. Good evening, everyone, and thank you for joining us on Apeejay Surrendra Park Hotels’ Q3 and 9-M FY '25 Earnings Conference Call. We have with us Mr. Vijay Dewan, Managing Director; Mr. Atul Khosla, SVP Finance and CFO of the company; and Mr. Rabindra Basu, Director, Investor Relations. We will begin the call with opening remarks from the management, followed by an interactive Q&A session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Mr. Dewan to make his opening remarks. Thank you, and over to you, sir.

Thank you. Good evening, everyone, and thank you for joining us on our earnings call today. On behalf of the entire management team, I would like to express our gratitude for your continued support and confidence in our vision and business strategy. We remain committed to creating long-term value for our stakeholders. The year 2024 has been the year of triumph and success for us. Post our successful listing in February '24, today we are a debt-free company. The year has seen opening of our 2 palace hotels, THE Lotus Palace Chettinad and the Majestic Ran Baas, The Palace at Patiala. Flurys has reached the 100-store mark, which is truly historic for us and for an Indian company out of Kolkata. We have also opened Zone Connect by the Park 40 rooms at Prayagraj ahead of the Kumbh. In quarter 3, '24, we have achieved double-digit operational growth and the highest revenue for the quarter. Operational EBITDA, growth was 11% with margins at 36%. Growth in PBT stood at 58% Y-on-Y and PAT at 17% Y-on-Y. We have maintained our leadership in the upper upscale segment of the Indian hospitality industry. Our own hotels have recorded India's highest occupancy rate of 91%. Notable properties such as Kolkata have achieved 100% occupancy, while Navi Mumbai and Chennai have recorded 95% and 92% occupancy, respectively. New Delhi, Hyderabad and Bangalore have registered 91% occupancy. This momentum continues as we innovate and elevate the guest experiences across our properties. We also maintained our leadership in RevPAR in the upper upscale segment. Q3 ARR growth was 9% and RevPAR growth was close to 12%. Among our Palace hotels, the Lotus Palace Chettinad amounted to ARR of INR 14,000 and Ran Baas, The Palace at Patiala ARRs of INR 35,000 plus. As these hotels stabilize, we expect our overall ARRs to further improve. Zone Connect Prayagraj has seen very high ARRs during the Kumbh festival. And we expect the location to continue to attract strong occupancy levels even beyond the event as it's an important destination for religious travel. As of now, we operate 36 hotels with a total of 2,495 keys. Over the next 5 years, we are on track to double our key count to a total of 5,048 keys. This includes development of 830 keys of our own, which include Pune 200 keys, Kolkata 250 keys, Vizag 100 keys, Navi Mumbai 170 keys and Jaipur 150 keys. All projects remain on track and we can look forward to further additions in the coming year. The Kolkata Municipal Corporation has granted in-principle approval to go ahead with our project. And in this month, we plan to submit working drawings for approval to the Kolkata Municipal Corporation. The sale of 100 service apartments will begin before the festive season this year. And we will add close to INR 100 crores to our balance sheet every year for the next 3 years. Our cash flows from operations and will continue to keep us net cash positive throughout the development cycle over the next 4 to 5 years, which remains a significant part of our strategy. The 16 lakh square feet of development, adding 830 rooms is being carried out on our legacy land parcels and will ensure high IRRs from these projects in the range of 30% to 40%. As we execute this expansion, we remain focused on enhancing the guest experiences and driving higher operational efficiencies. As part of this initiative, we have refurbished and renovated close to 100 rooms this year, which we expect will significantly improve our ARRs in the coming quarters. These investments will not only enhance our product offering, but also contribute meaningfully to our revenue growth. We have successfully relaunched 4 restaurants after renovation this year. Flurys, our iconic bakery and confectionery brand, opened 23 new outlets during the year so far, reaching the 100-store milestone. Out of these 8 new outlets were added to Mumbai. And during this year, we have entered the cities of Indore and Hyderabad. This year, we plan to set up a large central factory for Flurys in North India. And this cold chain format will change and it will cover the whole of North India from a central kitchen. This will lead to even faster growth for Flurys and help in its pan-India presence. Flurys is on course with its expansion plan and to provide industry-leading margins. Flurys, as you know, started in Calcutta in 1927. And we plan to reach 200 stores in 2027, its centenary year for Flurys. Coming to our current financial performance. Consolidated total income for Q3 FY '25 stood at INR 179 crores, reflecting a healthy 9.2% Y-on-Y growth. RevPAR reached INR 7,658 supported by a steady ARR of INR 8,387. ARR growth Y-on-Y was 8.9% and RevPAR growth stood at 11.7%. EBITDA for the quarter was INR 63 crores, making 11% Y-on-Y growth with margins steady at 35.7%. Looking ahead, the company remains committed to enhancing its operational efficiencies. In Q3 FY '25, the F&B segment accounted for 44% of our total income. The Flurys brand delivered exceptional performance, posting a 39% year-on-year growth during this period. Looking ahead, we aim to see that each matured Flurys store to achieve an annual revenue target of INR 1 crores, specifically for the cafe and restaurant segment, underscoring our confidence in this vertical's potential. We believe Flurys is well positioned to become one of the most prominent pan-India brands. And we expect strong growth in the Flurys business in the coming years. The company's profit before tax stood at INR 85 crores in Q3 FY '25, achieving a 58.2% Y-on-Y growth. Our normalized PAT for the quarter stood at INR 32 crores, demonstrating an impressive 17.3% Y-on-Y growth. The synergy of our 3G's approach that is growth, governance and green initiatives continue to guide our long-term strategy. Sustainability is a key part of our expansion plans, ensuring that our growth aligns with environmental responsibility and strong governance. With focused efforts on waste management, water conservation and carbon efficiency, we are driving meaningful progress towards a more sustainable future. In conclusion, I'd like to say that ASPHL remains confident in its ability to sustain leadership in the upper upscale segment of the hospitality sector, driven by strategic expansions, investments and operational efficiencies. As I highlighted in my previous earnings calls, we are entering the early phase of what we anticipate to be a super cycle for the hospitality sector, one that could span more than a decade. Additionally, segments like spiritual tourism, weddings, MICE, wildlife tourism and a new category of leisure will play a key role in the sector's expansion. We expect sustained double-digit growth for our business in the quarters ahead as we capitalize on these emerging trends. Once again, I'd like to express my gratitude to our shareholders, customers, team members, well-wishers, friends and business partners for their trust in us. Thank you.

Now shall we open the floor for questions?

Yes, please.

[Operator Instructions] The first question is from the line of Archana Gude from IDBI Capital.

Congrats on good set of numbers. I have 2 questions. So firstly, on this ADR, 9% Y-on-Y growth in ADR is encouraging. How we should read these numbers in terms of same-store growth?

No. So the ARR by and large, is coming from the existing hotels which we are owning. And it's the occupancy also of 91% is from the properties which we own. We have achieved, as I mentioned, 100% occupancy in our hotel in Kolkata. And we have achieved 95% occupancy in Navi Mumbai and we have achieved 91% in New Delhi, Chennai and Bangalore. As far as ARR is concerned, we achieved during the quarter -- actually during the 9 months ending, we have achieved in New Delhi, which is very significant, an ARR of INR 8,472, which actually increased by over INR 1,000 compared to last year in quarter 3. If we were to look at our hotel in Kolkata in 9 months ending, it was at INR 5,004. It has increased to INR 7,406. Likewise, if you see our hotel in Bangalore, it has increased from INR 6,587 to INR 7,015. So all our hotels are actually showing above double-digit growth in terms of ARR, and this trend is likely to continue in the quarter 4 as well. I must also add that I mentioned that we have opened Palace Hotel in Chettinad which is now giving us, which opened in the month of September-October and it is now stabilizing and it is giving us an ARR of INR 14,000. Whereas if we look at Ran Baas, the Majestic Ran Baas, The Palace at Patiala is starting to give us ARRs in the range of INR 35,000 to INR 40,000. And these 2 hotels as they stabilize in quarter 4 and in the quarters ahead are really going to stabilize, further increase, further help us increase our ARR. And I expect actually, it's not just about double-digit growth. But as we go into the year ahead, we are expecting higher double-digit growth, possibly ahead of 15% as we move forward.

Sir, is my reading correct that you said that for FY '26 somewhere higher mid-teens full year growth can be expected?

Yes, we can say that, yes. At the end of the year with FY '26 end of the year, we can expect higher double-digit growth and possibly in the higher mid-teens; definitely ahead of 15 plus.

So secondly, on the Flurys, congrats on reaching 100 mark. Sir, are we sticking to this 120 outlets guidance for FY '25? You mentioned that by FY '27, we should have 200 outlets. Sir, how many numbers of outlets should be matured by FY '27?

No. So every year, if we are opening 40 to 50 outlets, in fact, during this quarter itself, we are planning to open another 14 outlets. And these are opening largely again in Mumbai, Kolkata and now also in Hyderabad. And starting next year, over the next 2 years, we plan to add 50 outlets. So majority of the outlets, I would say that in '26-'27, should be at least 150 outlets should have matured. And it's not that the plan is only up to 2027. I mentioned 2027, the aim is because we reach 100 years of Flurys, because Flurys started in Kolkata in 1927, so it's an important historic landmark for us. So at that stage, we are aiming to reach 20 stores over, say, by the time we complete 100 years or we reach the centenary year.

And sir, this INR 1 crores revenue for Flurys, the matured ones we spoke about, roughly what kind of EBITDA margin would that generate?

So we have always maintained. Firstly, the INR 1 crores revenue per store is largely going to be in the cafe and in the average of cafe and restaurants. It is not going to be INR 1 crores for the kiosks we open. And Flurys is the mix of kiosks, cafe and restaurants. And going forward, we are going to open actually more kiosks, more cafes and restaurants. And the margins, the margins continue to be industry-leading for us, in the range of 18% to 20%. They have been like this. And we will possibly even exceed these percentages as we go forward.

So that was helpful. And maybe lastly, I'll just squeeze in one more question. Sir, how has been the slate for the new hotel addition on management contract? Do you see some kind of competition that everybody is being very competitive on getting the hotel management contract, the midsized hotel viewers like us. So how has been the response and overall scenario on ground?

So as we have currently close to about 1,050 keys on the management side of the business. And this business also we plan to double as we go forward over the next 5 years. And this business is doing well for us. Yes, there is competition, but this business is growing well for us and will continue to grow at the same pace in the years ahead.

Next question is from the line of Ashish Golechha from BU Ventures LLP.

Congratulations to you for a very good set of numbers. Sir, I have 2 questions. Sir, my first question is, last year; we achieved a net profit of INR 69 crores and that INR 69 crores was on account of interest payment of INR 66 crores. So for the current year, once the interest payment outgo is becoming less, can we assume -- can we basically be our estimate will be around INR 110 crores to INR 125 crores? If you could throw some light on that, first question. Second question is, sir, any idea in future once our Flurys is doing so good and you have outlined a very good plan in 2027. Any plans for demerging it?

Firstly, in terms of profitability, we do remain committed since INR 60 crores have gone interest liability has gone, so it will be in the range of -- PBT will be in the range of INR 100 crores and INR 120 crores. And of course, it will be further subject to taxation thing. So it will be within that range in terms of PBT. Second thing in terms of Flurys, as we go to 200 mark, as we cross that 200 mark in FY '27, we will be looking at various options, as you are saying in the -- are available. And we will be discussing with the -- Board will be discussing various options available for future growth of the future model as a separate also in terms of SOP valuation. That will be options will be explored and look into and taken to the Board.

At the moment, the focus is to actually grow Flurys from 100 stores to 200 stores. That will be the primary focus. And the Board will evaluate our new options once we have Flurys reach the 200 store mark. The most significant thing about Flurys, which I mentioned in my opening remarks, is that now we are during the course of this year, we will be setting up, a large central commissaries, which will be in the range of 20,000 square feet in the Delhi NCR region. This is a change actually in our strategy. Earlier, we were setting up a decent sized commissaries in the place of operation like we have one in Mumbai, we have a large one in Kolkata. But now we will open a central large commissary in the NCR region. And the plan is to actually use it to supply the whole of North India. So the future growth of Flurys is going to be much faster than the growth which we are seeing right now because we are moving now to a cold chain format, freezing the products and then making them fresh at the time of delivery. So this is a change in model which will happen. And this will lead to rapid expansion of Flurys, firstly in North India and then overall whole of India.

One last question, sir, you talked about in the presentation regarding Prayagraj. If you could throw some light regarding the number of keys and room occupancy in Prayagraj considering the MahaKumbh is going very nice. So it would be really great for the participant, sir.

So MahaKumbh actually has been a great success for our country. It has already, as per estimates, achieved close to revenues of close to INR 3,000 crores for the country. And we are lucky that we have been able to open Zone Connect by the park at Prayagraj. It's a 40-room hotel under management contract. And we have been seeing ARRs of INR 40,000 and obviously, 100% occupancy all throughout this period starting from January. And we expect this high occupancy and ARRs to continue because India's spiritual tourism growth is actually really phenomenal. It's not only just that it is there in Kumbh. It's the similar trends which are emerged, which have emerged in Varanasi as well as in Ayodhya. Ayodhya last year has seen INR 1.6 crores in terms of travelers to the city. And this trend is going to continue; so domestic tourism within that spiritual tourism is going to play a key part as we move forward.

Next question is from the line of Raman KV from Sequent Investments.

Sir, my first question is with respect to Park M bypass of Kolkata. You said there, in the presentation, it is mentioned it's 100 apartments. And you also mentioned in your opening remarks that you will start the sale by this year and it will generate a cash flow of INR 100 crores, right?

Correct.

Sir, it will -- for how many years it will generate?

So let me explain to you this project in detail. This is close to 6 lakh square feet development. Close to 3 lakh square feet is going to be used for the development of serviced apartments and close to 3 lakh square feet is going to be used for the development of the hotel. The construction work for both the hotel and the apartments is likely to start by the middle of this year and also at the same time, the sale of the serviced apartments, are also going to start before the festive season. This is a 3 lakh square feet development of the service apartments, which will give us at a minimum rate of INR 20,000 per square feet, a revenue of around INR 600 crores. And this is a joint development. We have a joint development agreement for this with the Ambuja Neotia Group on a 55-45 revenue share basis with the cost totally to the developer. And we expect our share of the revenue to be in the range of INR 300 crores.

Sir, do you have joint agreement with Ambuja?

Yes, joint development agreement. They will be developing this project for us on a revenue share basis of 55-45, 55% coming to us and 45% to the Ambuja Group with all costs being borne by them. And they will be selling and marketing this project. And the hotel project will be exclusively 100% owned by us. So from of this INR 600 crores, roughly INR 300 crores will come to us. And we plan to sell roughly about 33% of these apartments every year. So our share in this will be INR 100 crores for the next 3 years. We will get INR 100 crores every year for the next 3 years.

And this INR 300 crores will be used -- proceeds will be used to construct the hotel. So effectively, this hotel, EM Bypass with 250 rooms in the prime location is going to be with zero cost; so that zero cost with a very high IRR. And so you can expect the ARR when it's open in that area is going to be in the range of INR 12,000. So it will be Okay.

The hotel ARR is to be around INR 12,000?

Yes.

And sir, I have another doubt with respect to the Flurys business. So you said INR 1 crores once the store matures, how long will it take per store to mature?

See, most of it depends largely on locations. But on average, the stores are maturing roughly in about 6 to 7 months' time.

Okay, which means like the stores which were opened about in the first quarter will contribute INR 1 crores in quarter 4 of this year, right?

You are right, but I'm saying this is for the cafes and restaurants. On the whole, we have a mix of kiosks, cafes and restaurants. And most of the expansion in the future is going to be for cafes and restaurants and a lower portion is going to be for the cafes. And yes, we are saying that we will stabilize the store for the cafes and restaurant at the INR 1 crores mark. So currently, if you see, it is 50-50 for kiosk and cafes and restaurants. But as we go forward, 70% to 75% of our new stores are going to be cafes and restaurants.

Okay. So you are not planning to expand kiosk aggressively as aggressively as cafes?

It is going to be -- the mix is going to change and will be more tilted towards cafes and restaurants, because as we have learned more about this business, we feel that we should actually have more cafes and restaurants.

Sir, also one last question with respect to the -- you said you are opening large central confectioneries in NCR Delhi, its 1,000-2,000 square feet area, right?

20,000.

20,000. And this is basically it will be used as like a central kitchen and you will be supplying?

All of North India.

Next question is from the line of Tanya from AUM Capital.

Congratulations for the strong set of numbers. I just have a couple of queries. I saw an increase in the inventories from INR 16 crores in March to INR 111 crores in September. Was it due to the transfer of land and construction costs related to EM Bypass Kolkata project? That's the first question.

Yes, due to the inventory, that is what inventory transferred because of the shifting of inventory on account of EM Bypass for sale of the bypass.

Okay. So who are the target customers like in the service apartments? Are they luxury recipients or long-term rental properties or just short-stay corporate housing? Like which segment is it going to cater the service apartments?

This is going to be in the upper upscale and luxury segment. The apartments are being positioned in the range; the starting price at the moment is in the range of INR 18,000 to INR 20,000. And as we go forward, we expect the average to be in the range of INR 22,000 to INR 25,000. But this is for -- we'll have to wait and see. But our opening price is expected to be in the range of INR 18,000 to INR 20,000. And that is the price range in which the apartments are selling at the moment.

And sir, the cash flow which you have said, is it going to get added from next year itself? That is FY '26 the INR 100 crores?

The INR 100 crores cash will come into the balance sheet. It will not form part of the P&L because the entire INR 300 crores will only get recognized at the end of the handover of the apartments. But the cash flow of the company will continue to improve by INR 100 crores every year starting this year.

Okay, sir. And regarding the finance cost, sir, we have reduced significantly. And I would say it is -- that is completely nil. Are we seeing any borrowing costs further going up in the next year because you have so much of projects coming up and lined up?

No. We don't expect too much of cash loan cost because of the fact, because this year also, our total project cost is expected to be in the tune of INR 140 crores. Next year also, it will be tune of INR 140 crores to INR 170 crores. And our EBITDA last year was also INR 205 crores. Cash EBITDA was INR 205 crores. And this year, it's expected to be already more than that. So if we maintain that much EBITDA level also, we'll have a surplus after doing the project cash allocation of about INR 150 crores to INR 175 crores. We are already keeping this parking the surplus for future purpose from the EBITDA. So at present, as on date, my current mutual debt balance is INR 40 crores.

Mutual fund?

Mutual fund balance.

[Operator Instructions] Next question is from the line of Jaideep Kapadia from IDBI Capital Markets.

Congratulations on the good set of numbers. My question is specifically on the markets like Navi Mumbai property and Chennai. We are seeing a high occupancy rate of around 92% and 95%. But on the ARR front, things are not very green. So like what's impacting our capability to charge a higher ARR over there?

No, ARRs for Navi Mumbai have been also steadily increasing. And as we have seen, there is a lot of traction happening because of the entertainments which are taking place, particularly DY Patil Stadium. And during the quarter, during the month of November, the ARRs hit a record high during this 3-day period in Navi Mumbai. And during the quarter, we have seen that the ARR hit actually INR 6,206 from INR 5,806 and the RevPAR was INR 5,806 with the occupancy of 92%. And we expect these ARRs to further improve as the airport. The most significant thing is that the airport is likely to be commissioned during the course of the next financial year. The runway strip is absolutely ready. And that is the other reason that we have -- we are now going to further develop at Navi Mumbai. Presently, we have only 80 rooms. And we are seeing a very strong market in Navi Mumbai. One is for the connectivity. The other is -- the connectivity has significantly improved between Navi Mumbai and Mumbai because of the coastal road and also for the airport. So we plan to add another 170 rooms for which we have already completed the schematic design drawings. They are actually being completed. And we are now going to be shortly going for the sanction of these drawings and for the additional approval of SSI. And the SSI, which is going to be available -- is going to be about 3.5 lakh square feet. And this will give us a total of 80 rooms we have, 170 rooms we add, so a total of 250 keys on the whole. So this is going to be -- Navi Mumbai for us is showing a lot of promise. And it's going to significantly add to investor value as we sort of go forward.

The next question is on any inorganic opportunities currently on the table? So the presentation mentioned that the company looks at organic and inorganic opportunities, so any inorganic opportunities right now on the table?

There are some. That is why I did mention that, obviously, we are going to be developing these 830 keys for which work is in progress and it is in various stages. And firstly, it is on course in all the projects, including our mega project in EM Bypass in Kolkata. And more significantly, as we go into the next year, we are evaluating inorganic opportunities. And as and once they crystallize, we will be back with you.

Okay, sir. And my last question is like could you provide some light on your future CapEx plan for the last quarter and the coming year, '26 financial year '26?

Last quarter, the CapEx plan is approximately INR 30 crores. And the next financial year, of various projects, the CapEx should be in the range of INR 150 crores to INR 170 crores. And we expect that to be taken out from our internal accruals. And this year also with the EBITDA of -- and plus with the internal accruals plus there is an INR 100 crores amount of cash will come from EM bypass projects also. So my cash requirement will be fully met. And still on account of it, we are creating a liquidity from the EBITDA. And we already have INR 40 crores lying in the mutual funds from the surplus liquidity after project CapEx payment.

So the balance sheet on the whole is strong and it is becoming stronger as we go forward.

[Operator Instructions] Next question is from the line of Vaibhav Muley from Yes Securities.

Congratulations on a very good set of numbers. I actually just had one question. Can you share the year-wise breakup of your pipeline in terms of owned and managed rooms over the next 5 years?

So the main projects, which we are opening, that is the first project which will open is in Pune, 200 rooms are going to open in Pune, along with 100 rooms in the same year in '27. So in FY '27, if the hotels will open, the first hotel, Pune is going to open in April '27, followed by Vizag 100 rooms in October of '27. So about in '27-'28, 300 of our own keys are going to be added. This will be followed by the opening of our hotel in Kolkata, which is the EM bypass project. This project actually opens in April of 2028; so in '28-'29, you can expect 250 keys opening on account of our hotel in Kolkata. And along with that, in '29, we will open about 400 keys, which, is Navi Mumbai and our hotel in Jaipur. So these will open in FY '28-'29. Lastly, for each year, as far as the management contracts is concerned, we plan to add roughly about 300 keys every year.

Next question is from the line of Sagarika from Anand Rathi.

Just wanted to get a sense of your 2 palace properties. So what kind of occupancy are we -- did we witnessed in the quarter? And at the same time, what kind of steady-state rates are you expecting going forward, especially in FY '26?

Okay. Can you repeat the question? It is not very clear. There is some disturbance actually coming.

Okay. Sir, so I just wanted to get a sense of your palace properties. What kind of occupancy did we see in Q3? And what kind of steady-state ARRs are we expecting in FY '26 for both properties as well as the occupancy?

So the occupancy in these properties at the moment is roughly around 20%. And as we go forward, these are going to stabilize in the range of 40% to 50% in FY '26-'27. But in these Palace hotels, the game is not going to be on occupancy as it is in the rest of our hotels. This is going to be an ARR game. And we expect the ARRs -- I'm talking about YTD. ARRs for the hotel in Chettinad to be in the range of INR 15,000 and for the Ran Bass Palace to be in the range of INR 45,000 to INR 50,000 in the coming year. This year, we are expecting INR 14,000 and INR 35,000, INR 14,000 for the Lotus Palace Chettinad and INR 35,000 for the hotel in Patiala. So this is the key to our -- going to be the key to our ARR growth and key to the fact that we are going to be having higher double-digit growth in the coming year because of these palace hotels. And these palace hotels, as if you have gone through the presentation, they have been extremely well received, not only by customers, but by the media as well. And both the hotels have got extensive coverage in Condinas Traveler as well as Travel and Leisure, which are the leading luxury magazine. The hotel in Patiala is expected to be in the gold list for the year 2025, which is going to be a very significant achievement. Also, the hotel in Patiala Ran Bass, the Palace Hotel has already undergone inspection for being a Relais & Chateaux hotel, which is going to be a marketing tie-up with this company. And Relais & Chateaux hotels are the most prestigious hotels in the world. And we expect this hotel to achieve that status by the end of February or by beginning of March. And once this marketing arrangement and is completed with Relais & Chateaux.

And just one more question. So you said that you mentioned INR 150 crores to INR 170 crores CapEx outlay for the next year. Can you just briefly provide a bifurcation, especially in the context of the 200-room addition in the Navi Mumbai property? So what is the CapEx bifurcation of your upcoming properties?

Yes. Next year, it will be mainly in the Pune. Operating properties about Pune will be about INR 40 crores operating properties about another -- you can say INR 40 crores. So that is INR 80 crores. And we will also be starting the Vizag, which you can say could be another INR 40 crores. But then we will be starting EM bypass also and INR 30 crores.

[Operator Instructions] Next question is from the line of Harshal Dev, individual investor.

You mentioned the average revenue from a store plus -- from a cafe plus a restaurant. What would the same be for a kiosk?

Kiosks, the revenue is around INR 20 lakhs to INR 30 lakhs.

And could you give us a rough idea, the additional 100 stores, would it be expansion in the existing cities? Or are we looking at newer markets apart from new cities?

So let me explain to you. We plan to -- we have already reached 100 stores and now new stores are opening, 14 stores are about to open. And we are going to have about 40 stores in the coming year. Over the next 2 years in Delhi, we will be adding 20 stores every year. The first thing is to add the central commissary in the NCR region and then to have -- overall to have a growth rate of about 40 to 50 stores. So the large part of the growth over the next 2 years is actually going to be happening in the North and which is going to be 40 stores in Delhi. And the 40 other stores, 40 to 50 stores further in the entire Northern belt, which will include Chandigarh, which will include Lucknow, which will include cities like Ludhiana. They will include cities like Jaipur and in Rajasthan, so all the high-density Tier-2 cities are going to be targeted in the North. So as to have roughly about 150 stores in the northern area over the next 2 years. The balance 50 are going to be added in Hyderabad as well as the expansion will continue in Maharashtra, which is already going to be 20 stores by the end of this financial year. And then we will add another 20 stores between Mumbai and Pune over the next 2 years to actually take it to the 200 mark.

Okay. And just a last question. The Flurys brand, is it owned by the Surrendra Park Hotel Company or is it owned by another group company?

It is totally owned by the main company, which is the Apeejay Surrendra Park Hotels. This is the main company, which is owning the brand and it will continue to be so. So there is going to be no change. In fact, all the brands which are with us are actually totally owned by Apeejay Surrendra Park Hotels Limited. It includes also the Someplace Else brand which is a standalone bar brand, which we have taken it outside the hotel, which is running in BKC in the Jio World Mall in Mumbai, so all the brands are owned by ASPHL, the Apeejay Surrendra Corporation, that'll continue to be...

Flurys tea, which is sold, which Typhoo is now sold as Flurys tea. Does any revenue on that flow into the company?

Yes. So the Flurys tea and subsequently Flurys coffee, this is owned by another company of the APJ Group. And for which we get a royalty from the parent group, which is 1% of their total sales. And this is an agreement which was signed earlier and it will continue to be so. The good thing about this is that Flurys is that parent company Flurys business is, they are also getting into coffee business. And we are going to be procuring our own coffee. And currently, we are buying roughly about 500 kgs of coffee. And this is actually very interesting and will lead to higher margins for the Flurys business. So we have our own baristas now. And we are going to be buying our own coffee, which currently, as I mentioned, it's 500 kgs per month. And we are buying this high-quality coffee in the range of INR 1,200 to INR 1,300 a kg. And buying our own coffees from -- this is going to be in the range of INR 900, so roughly about 25% savings on coffee will accrue to us as we sort of go forward.

And this royalty income is shown in the other income in our books?

Yes, it is always part of the other income.

With this, I now hand the conference over to the management for closing comments.

So thank you, everyone. And I would like to thank everyone for attending this call and for showing interest in Apeejay Surrendra Park Hotels Limited. I hope we have been able to answer all your questions. Should you need any further clarification or would you like to know more about the company, please free to reach out to us or to CDR India. Once again, thank you for joining the call and see you all in the next quarter. Thank you.

Thank you very much. On behalf of Apeejay Surrendra Park Hotels Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.