Apeejay Surrendra Park Hotels Limited ($PARKHOTELS)

Ladies and gentlemen, good day, and welcome to the Apeejay Surrendra Park Hotels Limited Q4 FY '26 Earnings Conference Call, hosted by PL Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from PL Capital. Thank you and over to you, sir.

On behalf of PL Capital, I welcome you all to the 4Q FY '26 earnings call of Apeejayc Surrendra Park Hotels Limited. We have management represented by Priya Paul, Chairperson and Executive Director; Mr. Vijay Dewan, MD; and Mr. Atul Khosla, Senior Vice President, Finance and CFO. I would now like to hand over the management for opening remarks. Over to you, sir.

Thank you, Mr. Joshi. Good afternoon, everyone. Thank you for joining us today to discuss our fourth quarter and financial year 2026 earnings. On behalf of the Board and the management team of Apeejayc Surrendra Park Hotels Limited, I would like to extend a very warm welcome to each and every one of you. FY '26 and particularly the final quarter of this year was marked by a dynamic operating environment for the hospitality industry. The sector witnessed periods of volatility driven by geopolitical developments, disruptions in international travel flows, intimated supply side constraints including LPG shortages in select markets, inflationary pressures across operating costs and fluctuations in travel sentiment across certain regions. Despite these challenges, the Indian hospitality industry continued to demonstrate strong resilience supported by robust domestic demand, sustained momentum in weddings and mice activity and increasing customer consumer preference towards premium differentiated and experience-led travel. Importantly, supply growth within the premium hospitality segment continues to be measured relative to the demand growth across most key markets. This continues to support healthy occupancies, pricing strength and long-term confidence across the sector. The industry is also benefiting from broader structural tailwinds including rising disposable incomes, improving travel infrastructure, growth in organized travel, increasing corporate mobility and strong domestic tourism trends. Against this backdrop, FY '26 was another year of steady operational performance and strategic progress for the company. We continue to strengthen our position across hospitality, food and beverage and experiential lifestyle segments with a healthy momentum across our core hotel portfolio. Our brands continue to demonstrate strong market positioning across several key studies, with year-round occupancy at 91% and RevPAR leadership across the upper upscale segment, reflecting the differentiated nature of our hospitality offerings and the strength of our customer engagement and loyalty. During the year, we also continued to expand and diversify our hospitality platform through a balanced mix of owned, managed and leased assets while maintaining focused on a disciplined and capital-efficient growth. At the same time, we continue to make progress across our long-term development pipeline spanning hospitality led mixed-use development, urban destiny and leisure markets. Our residential and hotel project in Kolkata has had a successful start with 29 apartments sold at market-leading rates. Visakhapatnam will commence construction very shortly and our boutique property in Juhu will be ready within a year. Our lifestyle-led ecosystem across restaurants, night life and experiential food and beverage formats also continued to see encouraging traction during the year, supported by strong consumer engagement and increasing preference for differentiated social experiences. Several of our hospitality and F&B formats also received important industry recognition and accolades during the year, reinforcing the strength of our brands and design-led philosophy. Flurys, our patisserie confectioning brand with over 110 stores, continued its growth momentum and further strengthening its presence across a few geographies. The business has continued to scale in a disciplined manner across multiple formats and cities. And over the next year or 2 to ramp up will be significant across the rest of the India. Operationally, the year also marked important progress in strengthening our internal capabilities and long-term operating platform initiatives around technology integration, process improvement and sustainability. These continue to remain key focus areas as we build a stronger and more future-ready organization. As we look ahead to FY '30, our vision is centered on building a stronger, more scalable and future-ready hospitality platform. We are strategically expanding our presence in the fast-growing mid-market segment, while accelerating our asset-light growth strategy to drive efficient and sustainable expansion with a clear target of surpassing 6,000 keys by FY '30, we remain focused on maintaining industry-leading occupancy levels and enhancing profitability across our portfolio. At the same time, we continue to unlock embedded real estate value while leveraging technology-led initiatives such as no 1 AI-driven upselling platform to further elevate guest experiences and revenue optimization. With a portfolio of differentiated brands, strong positioning across hospitality and lifestyle segments and a growing development pipeline across both owned and managed assets, we remain confident about our long-term growth prospects. With this, I would now like to hand over to Mr. Vijay Dewan, Managing Director of our company, who will take you through the detailed operation and financial highlights for the quarter and for the year. Thank you very much. Mr. Dewan?

Thank you, Ms. Paul. Good afternoon, everyone, and a very warm welcome to each one of you. It is always a pleasure to have you with us and today, especially so. On behalf of my colleagues across the organization, I thank you for your trust, your patience and your belief in what we are building at Apeejayc Surrendra Park Hotels Limited. [ FY '26 ] has been a significant year with revenue crossing the INR 700 crore milestone for the first time. Q4 continued to reflect resilient operating performance across the portfolio, with company maintaining its leadership position in occupancy and RevPAR. The sale of service apartments at EM Bypass Kolkata has exceeded expectations, resulting in substantial improvement in this year's cash flow. The 75% dividend payout approved by the Board, reflects the strength of our balance sheet and growth momentum. The outlook remains positive, and we continue to focus on creating long-term value for our shareholders through strategic portfolio expansion enhance guest-centric experiences, operational excellence and sustained margin improvement. In Q4 FY '26, consolidated operating revenue stood at INR 184 crores, up 4% year-on-year, while EBITDA stood at INR 53 crores with an EBITDA margin of 28.85%. Profit after tax stood at INR 12 crores with a PAT margin of 6.44%. The company maintains its leadership in occupancy and RevPAR. The ARR increased 3% on a year-to-year basis at INR 9,165, and RevPAR remained resilient at INR 8,149 despite a very high base. The Park Kolkota achieved occupancy of 100% for the quarter. and for the year, maintaining its record of world-leading occupancy. The Park Chennai at 95% and the past Navi Mumbai at 93% were among the top 3 in occupancy. For the full financial year, consolidated operating revenue stood at INR 707 crores, registering a growth of 12% year-on-year, while EBITDA stood at INR 218 crores, an EBITDA margin of 30.82%. Profit after tax stood at INR 66 crores with a PAT margin of 9.21%. Occupancy for the year remained strong at 91%, while ARR increased 9% year-on-year to INR 8,304. RevPAR also grew 7% year-on-year to INR 7,584, reflecting continued pricing strength and healthy operating momentum across the portfolio. Although profitability during the year was impacted by war and tension in the Middle East, higher depreciation and finance costs linked to ongoing expansion initiatives, the overall operating environment remained healthy and demand trends across most of our key markets continue to be encouraging. Our performance continued to outperform the industry across several major markets, including Koltaka, New Delhi, Bangalore, Goa, Navi Mumbai and Vizag, reinforcing the strength of our differentiated design-led hospitality model and lifestyle-led guest engagement strategy. Food and beverage continues to remain a significant contributor to our overall hospitality ecosystem and a key differentiator for our brands. During FY '26, F&B revenues crossed INR 300 crores and contributed approximately 43% of total revenues, supported by healthy traction across restaurants, nightlife, and experiential dining formats. During the year, we won several awards, Ran Baas, The Palace featured in the Prix Versailles global list of Architecture and Design Awards. Ran Bass, The Palace was also awarded with One MICHELIN Key demonstrating high quality of our product and differentiated service experiences. The Lotus place Chettinad featured in the travel and leisure list of 100 best new hotels in the world. During the quarter, several of our signature outlets, including Dusk at The Park Navi Mumbai, Aqua at The park Bangalore, Aqua at The Park Navi Mumbai and some places received important industry recognitions and awards further reinforcing the strength of our experiential F&B positioning and lifestyle-led brand ecosystem. Flurys also maintained strong momentum during the quarter with continued expansion across formats and cities, further strengthening its presence within the retail F&B segment. The brand has now grown to 110 outlets, reflecting steady and disciplined scale-up supported by improving consumer traction and strong brand affinity. Flurys plans to add more than 30 outlets over the next 10 months, it plans to enter the new markets of NCR with 8 outlets, Pune 5 outlets and Bangalore 4 outlets. In preparation for its sentinel year in 2027, it plans to reach 100 outlets in West Bengal alone. Flurys delivered robust revenue growth of 29% year-on-year during FY '26, while continuing to deepen customer engagement across markets. We are pleased to welcome Mr. Rohit Kakra, as the new Chief Operating Officer of Flurys effective April 2026, and we continue to strengthen leadership capabilities to support the next phase of growth for the brand. Mr. Rohit Kakra Kate brings in 23 years of experience and was previously the Chief Operating Officer at Costa Coffee and Pizza Hut. On the development front, we have made substantial progress across our growth pipeline. At EM Bypass, we launched our integrated hospitality led us development comprising of 218 hotel rooms and 69 service apartments. Out of the 2 blocks in this project, 1 block has been launched. Out of the 34 apartments in the block, 29 have been sold at an average realization price of INR 20,857 857 per square foot. The sale has exceeded our expectations and have contributed positively to cash flows during the year. Cash flows have improved by over INR 11 crores up to April '26 on account of EM bypass apartment sales. The second block of apartments is expected to be launched in September, October this year. From EM bypass sales, we expect additional cash flow improvement of close to INR 70 crores during the course of this year. We have also finalized the design for The Park, Mumbai at Juhu comprising now 78 rooms with project commencement planned in June '26, and completion targeted in about -- by about March 27. In Vizag, with an environment clearance is now in place for the upcoming 100-room development, project launch is expected to be on ground in August of 2026. Project teams are already at site and site reparation has started. Expansion remained our key focus area during the year as we continue to strengthen our presence across leisure, pilgrimage and urban destinations through a disciplined asset-light strategy. During FY '26, we launched 7 hospitality properties, adding 283 keys to our network, including hotel launches during the quarter itself, Zone by the Park Darjeeling, Zone Connect by The Park Gangtok and Zone Connect by the Park [indiscernible]. During FY '17, we plan to add 12 hotels totaling to 400 -- sorry, 472 keys out of which 8 would be asset-light side of the model, taking the total key account past for 3,000 keys by FY '27. Over the next 4 years, we plan to double the number of hotels from 42 hotels presently to 85 hotels and take the key count from 2,677 to 6,635, a 2x growth will happen in our owned hotels and a 3x growth in the asset-light model under Zone by The Park and Zone Connect by The Park. In other areas, we also completed the successful implementation of SAP S/4 HANA during the year, which will strengthen financial controls, improved reporting quality, enhance overall operational efficiency across the organization. Sustainability also remains an important focus area for us. And under the planets program we have reached 100% or near 100% green mobility and gas services in our own hotels. Looking ahead, the demand environment for the hospitality sector remains favorable. Structural growth drivers, including domestic travel, weddings and mice businesses, experiential consumption and limited supply growth across several markets continue to support strong medium- to long-term industry fundamentals. We remain well positioned to capture this growth. At Apeejay Surrendra Park Hotels, our journey continues to be guided by the principles of growth governance and green. We remain committed to building an organization that combines innovation with responsibility while creating meaningful experiences for our guests, some opportunities for our people. Equally important, we continue to strengthen our culture as a people first and AI-first organization. enology and artificial intelligence are powerful enablers of growth efficiency and guest satisfaction. But our success will always be driven by our people, their creativity, commitment and passion for hospitality. With a strong balance sheet, a robust development pipeline, growing brand equity and committed leadership team, we remain well positioned to capture the opportunities emerging across the Indian hospitality sector and to deliver sustained long-term growth. I would like to extend at this stage, my heart felt gratitude to our shareholders, customers, team members and business partners for their continued trust and support. Their confidence inspires us to keep innovating, growing and creating enduring value for all our stakeholders. Thank you. With this, I would like to hand over to the moderator once again to open the floor for question-and-answer session.

[Operator Instructions] We have the first question from the line of Archana Gude from IDBI Capital.

I've got 3 questions. Firstly, on the hotel side. So this ADR has been -- has shown some decline over sequential quarter as well as on Y-o-Y, there was just a few percent growth. So how we should read these numbers where there's some cancellation during Q4, which led to this degrowth?

So yes, you are right. There have been cancellations because of the geopolitical situation and the war in the Middle East, large significant cancellations did take place in Delhi as well as in Hyderabad. But things have stabilized now, and we expect the conditions to further improve starting now. And we expect that the growth will continue to be strong for us as we move forward.

So even on full year earlier, you had guided mid-teens kind of growth on top line, but somewhere we are at 12%. So is that we need to really work on some RevPAR part what is really missing that we stop on the 15% mark, sir?

So 12%, considering there were 2 disruptions, one would say 2 disruptions have taken place during the course of the year. One is the disruption which took place because of operations Sindhoor, which happened in quarter 1. And the second disruption has taken place because of the war in the Middle East, which started towards the end of February and continued right into April and still the settlement has not yet happened, but the signs are looking very positive. And we hope that over the next week or so that the situation comes back to normal through the extension of this 60-day cease fire. And then that should lead to definitely an improvement in performance. Already, we are seeing that domestic India's domestic travel was strong, and it continues to be strong. And we are a strong domestic player, and we should be able to take advantage of that. So the 12% growth, if you are saying, I would say that the 12% growth, considering the fact that there were 2 disruptions has been very good.

Okay. And the second question is on Flurys. So the total number at the end of '26 obviously lower compared to what we guided before. So is that -- are there any challenges on the expansion, what we did in a earlier? What are the achievable expansion plans for the next 2 years?

So right now, the expansion is being planned. We plan to add -- we are at 110 outlets, we are definitely going to add 30 more outlets during the course of the next 10 months. And this expansion is going to happen largely in Delhi, where we plan to add 8 outlets. And then in Pune, we plan to add 5 outlets. And with this, and then, of course, we have plans for West Bengal, Hyderabad and Bangalore also. So adding 30 outlets is definitely going to happen. We plan to take it from current level of 110 to 140 outlets or maybe a little bit more. And then the plan remains to add 40 to 50 outlets of Flurys over the next 4 years to 2030. And as I mentioned, we have strengthen our leadership team with the appointment of Mr. Rohit Kakra who joined in as the Chief Operating officer. Firstly, we welcome him and then he has a lot of experience in this retail SMB format, 23 years of experience and a good experience in being the Chief Operating Officer at a Costa Cafe and Pizza Hut. And we believe now under its leadership and a strong leadership team, which already exists that we would be able to achieve the numbers we are committing to.

Right, sir. And sir, any bifurcation you would like to give of this 30 number for Flores, will it be more skewed towards kiosks or more the rooms and cafes?

Largely, it is going to be on cafes. But yes, there will be 1 or 2 flagship stores in each of the markets we enter. Like in Delhi, we expect at least 2 flagship stores. Delhi, when I'm saying it is Delhi NCR, but large amount of this expansion is largely going to be in the cafe format, and we feel that the Cafe format is the most promising as we move forward.

The next question from the line of [indiscernible]

I have a couple of questions. What are the key growth drivers going forward given our high occupancy levels and the meaning and calculation of 100% occupancy for Kolkata hotel?

The focus is going to be on ARR. We are during the course of the year, going to be carrying out room renovations across our properties. We are going to be renovating at Chennai, Bangalore, Kolkata, Visakhapatnam. So this improvement in the product is going to definitely help us in improving our ARR as we go forward. Also, there is no doubt that there is a significant demand-supply gap, and it continues to be there. As you all know, India is only 216,000 rooms in the branded category and not much of supply is coming in as we are moving forward. So demand side continues to be strong, and the supply is lower by at least 200 to 300 basis points. So that should help us in improving ARRs. And that should drive our growth going forward in the existing properties. We -- as you know, that during the course of last year, we had opened The Park Ran Baas Palace at Patiala. We also opened the Lotus Palace at Chettinad, and we have completed the acquisition of Purity, the 17-room property at Purity in Cochin on the Vembanad Lake. These properties, firstly, Purity was only operating for 3 months in the last financial year. So that property is going to add our growth into our growth story. And also along with this, our 2 properties, the 2 Palace hotels are going to further stabilize and drive our growth strategy going forward. Additional, of course, growth will happen because of the expansion on the asset-light side of the model and also the addition of 3 leased properties, which we plan to acquire during the course of the year. And of course, along with that, we are to complete the acquisition of the Malabar House at Cochin, which should happen over the next month or so. And with that also, there would be increase in our in our performance and in our revenue model. Alongside this, there is going to be, of course, rapid growth in our Flurys model, which should take our revenues to a much, much stronger position. And with that, we should be able to deliver a significantly strong performance.

Okay. And meaning in calculation of 100% occupancy for Kolkata Hotel because I am able to book the rooms. So I'm not understanding that my understanding is correct or you are saying that 100% occupancy, but your website says rooms are available for Kolkata hotel...

Rooms will always be available on the website will be available or may not be available. The most important thing is that rooms are open on the website right up to midnight. And so some days, you will see that the rooms are available up to late in the evening. But the hotel has always delivered 100% occupancy, and it's not only or near 100% occupancy over the last 10 years, except the 2 COVID years. And in those 2 COVID years, this hotel and in fact, our group demonstrated very high occupancies. The reason why occupancy is high, firstly, at Park Kolkata and also at the Park Hotels because we have a very effective revenue management system. We have a team which is highly dedicated and highly passionate about achieving 100% occupancy. And then our hotel is an entertainment destination. So people prefer this hotel over other hotels. And lastly, all our hotels have great entertainment and are exceptionally well located. So location of the hotel makes a significant contribution for selecting the hotel and giving us that 100%occupancy. Very important thing to note is that the Park Kolkata because of its services, because of its location and because of its entertainment, it has a very high percentage of repeat customers. The repeat customer base of this hotel is also at 30%, which is among the highest in the country and possibly in the world. So repeat percentage of customers is very, very high in this hotel. And it is because, as I said, because of its location, because of the entertainment offerings and because of its services.

Okay. But I want the calculation. What do you mean by calculation of 100% occupancy in Kolkata hotel?

It means that all the rooms are occupied in all days. occupancy means all days and the hotel is full all the time. But if I'm going to your...

Sorry to interrupt I would request you to please rejoin the queue again for questions. We have the next question from the line of Sumant Kumar from Motilal Oswal Financial Services.

Can you talk on the Kolkata market outlook when we have seen a change in the government and the government -- this government is aggressive for the economic development. And we have a good presence in Kolkata market and also in the vicinity. So what's your view on that and our outlook for Kolkata market?

So firstly, Sumant, thank you for joining the call. Kolkata has, at the moment, a very limited supply. At the moment, it only has 5,101 keys and roughly about over the next 5 years, very limited supply is coming in, about 1,702 keys are expected in Kolkata over the next 5 years. So the outlook for this market and for us because of this limited supply remains very, very positive. The government change, which has happened is also very, very positive. It should definitely drive in, firstly, stability. It should drive in definitely more investment into the state, should drive in more projects across West Bengal, both in Kolkata and the surrounding areas as well as in Bengal. So the outlook as a result of this is definitely positive. It brings the center and the state sort of together, and that should definitely help in propelling investments into West Bengal and alongside that, obviously, propelling growth in West Bengal on the whole. As we have launched our project on EM Bypass, 218 rooms. We have launched the project along with 69 service apartments. And actually, one of the -- we launched -- we have launched 1 of the 2 blocks and the sales have been very, very encouraging. We launched at INR 18,225 to begin with. And currently, we are selling the apartments close to INR 21,000. The second block -- we plan to launch in closer to the festive season, and we expect that the rates are going to further go up, and they may actually virtually surprise everyone because of this change. So through this sale of service apartments this year alone, we have already have improvement in our cash flow by INR 11 crores up to April. And as I mentioned earlier, we definitely expect on a minimum a INR 70 crore improvement in our cash flow. The market is going to definitely improve as the government stabilizes. -- and all the vacancies in the government of all the ministries are full and a proper change in the administration is carried out. It looks very, very positive as far as Bengal is concerned in the real estate sector as well as in the hospitality sector is very, very strong, and it's the time to invest in Kolkata. It's the time to buy Kolkata.

We will take the next question from the line of Anish Jain from [indiscernible]

So I want to ask about what our retention policy because we have seen cancellation in the March. So what about our retention policy, how did we retain?

So we have further strengthened our sales and marketing. We are pushing revenues through a constant communication with our 250,000 loyalty members. And we are, of course, aggressively there in the market to capture every part of the business, which is available. There have been a little bit of pressure because of the war in Delhi as well as in Hyderabad, but we have fully overcome that. And the occupancy level at the moment in both these hotels has once again recovered to be over 90%, and we expect that this trend will continue. We have consolidated our position. We have reestablished contacts with the ministries. We have reestablished contracts with the corporates. We are aggressively following more RFPs for both Delhi and Hyderabad, where a little bit of impact was felt because of war in the Middle East, but the situation has fully stabilized. And the good news is that last year, because of operations, Sindhoor, the quarter was not very strong. But now with things stabilizing, we expect this quarter to be a good quarter and a stable quarter.

Okay. And my second question is can you provide the performance in the ARR and the Lotus [indiscernible] about their ARR and their occupancy...

So this is, firstly, at the current level, the ARR I can give you for last year. The Ran Baas the Palace completed last year with an occupancy -- ARR of INR 31,000 plus and an ARR of approximately 20%. And at the Chettinad Hotel, the Lotus Palace Chettinad, we had ARR of about INR 12,000 and an occupancy rate of about 30%. Now during the course of this year, we have, of course, we are going to push this out even more. firstly, both the hotels are stabilizing even more. We have spent a considerable amount of money in PR and communication and in advertising these hotels and getting the positioning right in these 2 hotels. We expect at Patiala, the revenues to -- the occupancy to go close to about 50%, which is going to be significant because that's the kind of occupancy at high ARR, the leisure properties attain and that is considered to be very successful. So we are going to -- we are expecting that to be reached during the -- particularly during the season of October to December. This, of course, is an off-season. But even compared to last year, both the hotels are performing well, and we expect good growth to come out of these 2 hotels.

Okay. And one last question is, can you provide the Flurys EBITDA in quarter 4 and FY '26, both?

We do not share the segment analysis, but Flores is a profitable business. It has grown by 29% on the top line. And we expect the Flurys business to further expand and maintain its growth momentum going forward.

We will take the next question from the line of Anuj Kash from [indiscernible] Capital.

Last time I think in last con call or last -- you mentioned that you were setting up a central kitchen in Delhi for the operations of Flurys. So right now, sir, don't you think we are lacking in the execution part when it comes to Flurys?

So this -- we definitely said, but we have reimagined the business in totality. We have dropped the idea of making central kitchen at New Delhi. We are going to be outsourcing the manufacturing of the products to a vendor. And though that agreement has been signed, and we have put the processes into place for standardization of our recipes and for quality control. And we feel that the new model, which we have now put into place is definitely going to be helping in Flurys faster expansion. The factory itself takes a long time in terms of development. And that development period, we will have the advantage of not having that development period. So as a result of that, we should be able to grow faster, reach the markets faster. It's going to help us not only in Delhi, it's going to help us in all markets, all metro markets. So that is why this year, it's not only Delhi focus. It's also going to be a focus in Bangalore. We are going to also have a focus on Pune. And as a result of this, we feel we will be able to grow at a much faster pace.

Much appreciated, sir. Sir, what is the rationale behind this, whether it is asset-light model as such or whether it's margin accretive thing?

It is -- this is the model which is getting followed at the moment. It is more cost effective -- and more than being cost effective, you are able to rapidly roll out. You don't have to spend about INR 20 crores to INR 30 crores and then wait for a return on that investment. So this is asset-light, asset-light on the store level. It is going to be asset-light on the production level. So as a result of this, this is a better model, and we feel that the returns are going to be definitely better as a result of this. And obviously, as I mentioned, faster growth.

Yes. And sir, like I have an apprehension that sir, whether we'll be able to -- like the Fur to state that for what Flurys. So do you think we'll be able to maintain that differential from the...

Firstly, the recipes and the craftsmanship at Flurys is fully preserved. And we are going to be using those preserved and unique recipes, which Flurys stands for to maintain the quality of our product. We have put in the -- in each of the stations where we are going to follow this model, there are going to be checks and balances in regard to quality and in terms of the product, in terms of the standardization of the recipe. So the quality inspectors or the quality chefs are going to be in position at at this production facility, and they will ensure that the quality which comes out is as per the Flurys standard and it meets or exceeds actually customer expectation.

We will take the next question from the line of Jaydeep Taparia from Haitong Securities.

Sir, my question is regarding the ARR, which you mentioned that which will be a prime focus and specifically for the Kolkata market. So the occupancy currently is almost 100%. So how much headroom do you see like increase in ARR, which we can expect in the coming few years because the occupancy is almost 100% and Kolkata the market has -- it's very difficult to command the premium which you can in New Delhi or Hyderabad market.

Firstly, things are changing in Kolkata with the change in government. And then this hotel is very unique. It is considering that it has only 149 rooms. It has in the Central Business District, the T RevPAR, which is the total RevPAR per available room, which is close to INR 24,000, which is the highest in the business district. It exceeds all the major luxury brands in the central business district. And it is way ahead of some of the top brands, which are currently in the central business district. Because it does 100% occupancy and because it also has -- it's not only that it has the highest occupancy in the central business district, irrespective of the fact that it operates in the upper upscale segment. It is the market leader in RevPAR, and it is very close to other top hotels, luxury hotels in this business district. The gain in this hotel as the demand supply mismatch further continues, this hotel is automatically going to gain in terms of the ARR. It is also going to gain in terms of the banqueting business. It is very, very strong in its food and beverage business and particularly in the nightlife and entertainment business, where its beverage revenue is actually higher than its room revenue in most of the months. So as a result of this, we expect that through a much stronger banquet performance and a much stronger restaurant and bar performance, it will continue to outperform the market. And there has been no letup in this over the last 10 years, and there is no reason that this hotel will not grow as it moves forward. A lot of changes are also happening at this hotel. The plan is to refurbish and redo 20 rooms and raise the level of the product quality. And again, through the improvement in the product quality, take the ARRs up. We have over the last year, refurbished one of our bar, and we are also engaging with specialist companies to improve our offerings at the bar. We offer, of course, the best entertainment in the city. But we also now are looking at improving the product offering in terms of cocktails and in terms of food offering at these bars. And with this plan and obviously more control over the social media, in fact, the hotel has the best control over the social media, whether through Facebook or Instagram. YouTube channels. It has the best control over the social media channels. And with further push in those channels and with further push on entertainment, we expect to retain our leadership in the market.

We will take the next question from the line of an individual investor.

Yes. I have 2 questions, sir. One regarding the capital intensive work we are going for the next 2 to 3 years. Like how do we plan to keep the interest cost under control...

Mr. Khosla, our CFO, will take you through this question.

Our interest cost at present is 8.5%, which is the MCLR of the bank. So expected to remain under that level only is that. So interest cost remains under control. In terms of capitalization, we have earlier guided that we have approximately about 4 projects of Pune, Mumbai, Vizag and INR 50 crores, which is about INR 1,100 crores of which reduced the bypass INR 350 crores, out of which INR 70 crores is expected this year. [indiscernible] INR 330 crores normal CapEx is about INR 40 crores per annum is about INR 30 crores to INR 1,400 which is being funded mostly through internal accrual even if I take INR 250 crores as an EBITDA projection for conservative for 5 years. So we have not too high. So that's how we get service this demand. Second is we also have in addition to a current balance of cash and cash equivalent balance of about INR 75 crores in the books, but we do keep line of credit in our books. And this year also the interest, which has been charged about INR 7 crore interest increase has come mainly bank interest [indiscernible] financing of the acquisition balances, it is charged off to the books in P&L. But for the project financing, it will be capitalized only the interest cost under P&L will remain...

Okay. And sir, my second question is regarding, given the opportunity in Kolkata, do we have further land bank to develop more hotels, sir?

So we are currently having 400 rooms at the moment in Kolkata, which is a very high inventory. We plan -- which is both on the ownership side as well as on the asset-light side. We plan to add as in the EM bypass Kolkata project, we plan to add 218 keys on the ownership side of the model. Alongside this, we are looking at -- we have signed an agreement with Luxmi Tea for another asset-light model under the Park brand in Siliguri. This is in one of the best one of their best gardens. So within West Bengal, you can expect that the present 400 rooms, which we have in combination, 400 rooms in West Bengal are going to be doubled over the next 4 years. So it is a very strong presence in Bengal. And as we go along over the next 4 years, it will continue to be strong.

Sir, lastly, sir, our average room size like per property is approximately 100. Like how do we -- economics when compared to the bigger where we're having 300 rooms per hotel property...

So the new hotels, which we are obviously leaving the acquisition aside in Mumbai, but the new hotels, which we are opening in Kolkata, we will have 200 rooms, 218 rooms to be precise. In Pune, where the planning is going on, we will be having 250-plus rooms. In Navi Mumbai, where the project is the additional FSIs available of 380,000 square feet, we now propose to have 250 rooms. So there are -- the change is there. We are entering into large formats, 200-plus room formats as we move forward. More than that, -- it is also premiumization of the product itself. So these are going to be super luxury hotels, whether at Pune, Visakhapatnam, Mumbai, Navi Mumbai. So all these new products or hotels which are going to come up or new blocks, which may come up in these locations, they are going to be leading to a more luxury positioning. And with that, it will lead to higher ARR and higher performance. The market is strong, not only in the upper upscale segment, it is also very, very strong in the luxury segment. So we will be -- as we are going forward, we will be moving towards premiumization of the product, and that will drive our revenues going forward. So it looks very, very strong in terms of going forward. So the other most important thing in you said that our average is about 100 rooms. But alongside these 100 rooms, we have very successful restaurants and more than restaurants, we have very, very successful night clubs and bars. So as a result of that, you will see that though it's not being tracked at an industry level, the TRevPAR, which is the total revenue per room for Park Hotels is higher than that of the competitors. The case in point in Kolkata, it is in the central business district where some of the very key luxury players are there, the TRevPAR of the hotel is much higher than that of the luxury hotels. So it's not only just rooms. Our F&B is very, very popular. We drive our revenues through room as well as through F&B. We have 43% contribution, which is also among the highest in the cities in which we operate in the industry.

We will take the next question from the line of Jinesh Joshi from PL India.

We have stated that we plan to come up with [indiscernible] So the question is, are we planning to launch the hotel in FY '27 -- so that is one. And second, in terms of time lines in the last quarter [indiscernible] in early 2029. And the time line has been rescheduled to early 2030. So any reason for the delay is just an extension to the existing hot...

So let me see the page you're referring to, you said.

Slide 11.

Yes. Slide 11. You're referring to Malabar House?

Right. The development update slide.

Yes, yes, this slide. So this slide clearly shows that we will be moving from INR 2,677 crores to INR 3,149 crores. So Malabar House, the process of acquisition is currently -- the agreement has been signed. It got signed in December, January last year in December. But the process is still going on because it has an external payment for which bank permission has been sought. It is being bought from a foreigner. So that permission is taking a little bit of time, but now that permission has been granted. So the final part of the documentation is now going on, and we expect this acquisition to be actually concluded within the month of June, but to be on the safe side and giving a little bit of room, this has been put into quarter 2. But this agreement is -- and this deal is -- the acquisition should close within the month of June itself. Work is going on, and this should add. And now this hotel also like our hotel in [ Atala ] is a ray and shadow hotel, which is a mark of quality. And more than that, it's also very important for the positioning. The Malabar House is a re and shadow hotel already, and it produces a very high ARR. It is popular both with the -- it's actually more popular with foreign travelers, and it should help us in driving our ARRs as we sort of go forward. Could you repeat the second question you had?

Vizag hotel time line.

Vizag time lines, we are always working closely with the government to achieve faster permissions. Unfortunately, there has been a slight delay. The permissions are not largely in our control. In our hotel in Kolkata, we were able to get the permissions very fast from the time we applied to the time of the start of the project. There has been a little bit of delay in getting the environmental clearance, but the environmental clearance, which is the most difficult permission in Visakhapatnam, it got a little delayed, but now it is in place. And the rest of the permissions are virtually on the way. So -- but still because of the delay in permissions, this project seems to be slightly pushed back. But our teams are going to make a full effort to actually get this hotel up and running faster. The good news why it can come up faster is because it does not have a basement. It is going to be starting straight on the ground level itself, the construction. So as a result of this, there is a good chance that we will be able to do this project faster. But at the moment, considering the time it takes from the time of starting the project to the end of project, which is roughly a 3.5 to 4-year time line for any hotel company, we have given that time line to open in 2030. But be assured that from our side, all efforts will be made to finish all projects, whichever we are undertaking on time or ahead of time.

Sure. One last bookkeeping question from my side. Can you share the ARR and occupancy of our leased hotels as of FY '26?

Okay. So as far as the Pata hotel is concerned, it is on a 50-year lease. I did tell the other person who asked the question, it is in the range of -- it is on 31,000

Sorry, sir, I'm interrupting. For the 336 keys that we have on the leased side, can you just give me a blended ARR and occupancy number for FY '26? I mean that will be...

Okay. I got it. I do not have that number calculated. So what I'll do, Mr. Joshi, I can give you the individual numbers, which are at the back of my hand. But if you need that, I'll calculate and we will e-mail it to you. Yes. But I can still tell you what the individual numbers are. Atul will just read out the numbers for you. So 31,000, as we said, is in [indiscernible] INR 12,000 is what we said is in the notice -- so Mr. Joshi, we will just put these numbers together, and we will e-mail it to you. The numbers are not available on a consolidated basis. The overall consolidated numbers are there. But lease is all plucked together in the MIS, which we report. So the numbers which we have given to you in the presentation are the combined numbers of all the properties, but we will e-mail it to you.

Ladies and gentlemen, we will take that as the last question. I now hand the conference back to the management for the closing comments. Thank you, and over to you, sir.

So thank you, everyone. I would like to thank all of you for joining the call today, and I hope we are able to address all your queries. If you have any further questions, you can reach out to our newly appointed IR managers at Valorem Advisors. Thank you once again for participating in this call. And let me reassure you that we are on a path of growth and success. And whatever we have committed, we will be working towards it to achieve as we move forward.

Thank you, members of the management. On behalf of PL Capital, we conclude this conference. Thank you all for joining with us today, and you may now disconnect your lines. Thank you.