Kamat Hotels (India) Limited ($KAMATHOTEL)

Ladies and gentlemen, good day, and welcome to the Q4 FY '26 Conference Call of Kamat Hotels India Limited. [Operator Instructions] Please note that this conference is being recorded. At this time, I would like to hand over the conference to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Kamat Hotels India Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the fourth quarter and financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Mr. Vishal Vithal Kamat, Executive Director; and Mr. Nikhil Singh, Company Secretary and Compliance Officer. Without any delay, I request Mr. Vishal Vithal Kamat to start with his opening remarks. Thank you. And over to you, sir.

Thank you very much. Namaskar, everyone. I'd like to welcome you all on the earnings call that we have for the year ending 2026. So with that, let me just briefly go through that overall -- let me give an overall outlook that the -- while the global challenges have been immense for multiple industries, I think at the same time, we find ourselves in a very strange situation where supply is a challenge and demand is still there. So, many companies are having orders, but they are not able to execute due to supply issues. And when they are supplying, there is a cost escalation. So, there is a benefit also indirectly, but that kind of like evens out. So hence, you find that we are in a very unique position where there is still growth. We still have the performance, but expenses and other things are going up, and we need to keep that in mind. I think what Mr. Modi has said, our Prime Minister said, along with even when you look at Singapore Prime Minister's Viral Video and Mr. Uday Kotak, it's not about being pessimistic. It's about being cautious and keeping our eye on the ball as to what is happening and preparing for that. And touch wood, I'm very happy that hospitality in our case, the sectors that we are in, I'll talk in more detail about it in more. But broadly, we find ourselves in a position where our existing hotels will continue to have as per what we see, a good run or at least what we have been doing, okay? I don't know about the growth, but I definitely know that even if we maintain what we are maintaining and focus on our tightening belt that itself will still give a good result like we have seen in the last 1 year. And at the same time, new project execution would be challenging because of material supply availability today because of LPG. It's not only hospitality, but real estate and even simple office renovation, home renovation, any kind of utility for materials because of the tiles being a big challenge because LPG is required for tile manufacturing. So, you find that there is a lot of different, different push and pulls happening. But the good part is we are aware of it, and we are ready to weather it. That said, there has still been a good demand, a very good demand for weddings. There has still been a very good movement of domestic miles. And because Kamat is an Indian brand, homegrown brand, a strong domestic brand, having majority domestic clients, we particularly have not been affected with the results show from the foreign disruptions, foreign travel and Mumbai as a city being the primary Gateway of India has had that advantage. And Navi Mumbai Airport opening also is a further boost on this whole scene, whether it is from hospitality or business. So, Navi Mumbai and the way Navi Mumbai airports are adding the additional international flights, at least Mumbai as a sector, Pune as a sector seems to have a robust future with the increasing business. With this backdrop, we also know that overall we have some upcoming projects which have got delayed, whether it is the Orchid Dehradun, Orchid Gwalior, the Ira by Orchid Bhavnagar. But the good news is that Ira by Orchid Bhavnagar should open by June, though it was envisaged to be much later, thanks to the owners, again, Orchid Nashik got delayed. So, Bhavnagar owners, they were able to do things much more expeditiously and fast. So, when we are dependent on the owner, that time these certain delays happen. So, Bhavnagar Ira will open by June. And with that, let me just read a formal -- which our CFO, who has moved on. So based on that, the new CFO will come, which we can discuss on that later on. I'll just read one of the main passages was basically, on a consolidated basis, revenue for the fourth quarter stood at INR 110 crores, representing an increase of approximately 19% year-on-year. EBITDA for the quarter was at INR 32 crores, improving the EBITDA margins to 29%, reflecting an expansion of 213 basis points year-on-year. Profit after tax for the quarter stood at INR 18 crores, representing a 59% year-on-year, while PAT margins stood at 16%. For the full-year FY '26, the consolidated revenue stood at INR 386 crores, reflecting an 8% growth. The EBITDA for the year stood at INR 97 crores with EBITDA margins of 25.1%, while the profit after tax stood at INR 39 crores, translating into a PAT margin of 10.1%. So looking ahead, we are, like I mentioned, cautiously optimistic. We have to be very pragmatic in terms of the volume that we are looking at in terms of our business, focusing more on our domestic clients after President -- sorry, after Prime Minister Modiji's call on travel in India, I don't think many of the people in India have a choice because foreign airlines are anyways canceling and reducing the number of flights due to the higher fuel prices, including domestic aviation companies also have reduced their foreign travel like Air India has canceled. So while it will affect incoming, but post corona, again, let me remind everyone, Indian tourism influx of foreigners post corona was not very robust. It did not reach the pre-corona levels. And hence, a lot of our boom has been because of the robust internal economy. So again, this year, this holiday season, we find a lot of movement from within India and that's how many of our resorts are doing well even after the 31st of March. So, I think that boost many of the Indian operators, the Indian hoteliers, the Indian tour operators, many of them will have this advantage. With that, I'll leave the floor open to the question-and-answer session. I have with me Mr. Nikhil Singh, our Company Secretary also. They have done a very good job in -- basically, I must appreciate you and your team, Nikhil, for handling the things in the absence of [indiscernible] and still getting everything done on time. So thank you, everyone. And with that, I ask the moderator to open the floor. Thank you. Namaskar.

[Operator Instructions] The first question is from the line of Urmish Shah from Moneywisers.

Sir, my first question is on the ARR. I mean, if I see the Y-o-Y numbers for the quarter, then IRA and Fort JadhavGADH both have seen a decline. If you could throw some light on that and also on the occupancy rate for both these properties.

So occupancy, we have had a dip in JadhavGADH last year. There were certain things. But this year, we will definitely see much better figures for Fort JadhavGADH in general. There were certain challenges, which were there in the middle of the year because of which we did face. And that's why the second half was better than the first half, but we did not -- but yes, there was a dip overall. So this year, we have changed certain strategies in certain things and based on which there will be a much, much more better performance in terms of the ADR and the occupancy and the overall business, where especially in JadhavGADH, when we do weddings, we do in terms of yield. So this year, there has been a different change in strategy, and that's how basically we will find that result. IRA, for the coming -- sorry?

Could you elaborate a bit more on the strategy? Because I can understand IRA had a 5% dip, if I see the numbers, but JadhavGADH had a 10% dip.

Yes. So, IRA's dip is different and Fort JadhavGADH's dip is different. IRA's dip is because -- so basically, what happens is when we add new hotels and this is also a very good question you asked, let me take it on a broader sense of the occupancy also drop, which holistically as a company, we have seen. That's because what happens is when you add new hotels and since they have been under either Orchid brand or under IRA brand, the overall metrics becomes wider. The base becomes wider. For example, we've added 45 room hotel, IRA by Orchid Porvorim. Now in the first few months, it took time for it to start, stabilize. It takes a lot of time for the SEO, which is the search engine optimization to get the algorithm and then the hotel to start popping up on the top, then people when they start booking, that time on the OTA bookings also the algorithm starts playing. Today, if Orchid Hotel comes in the top page, it's not because of only the money that you spend on ad or banner and all. That doesn't help a lot. What actually helps a lot is when you are popular due to clicks, the algorithm at the back end says, hey, this is a popular hotel. People are liking this hotel. Let me promote this hotel because ultimately, what does the agent want, the OTA want, the MakeMyTrip, Booking.com. They want more clicks through them. So if they show popular hotels first, the probability of the clicks and the conversion is very high because of which the algorithm is set that way. So when you start a new hotel, it takes time. Even if you are a good brand, it does not matter. It takes time for the algorithm to recognize you to be popular in that area and then your thing come up. So today, touchwood, that IRA by Orchid Porvorim is doing exceedingly well. But when it started off, the first few months, the first 3 months. Similarly, Orchid Rishikesh, our Orchid Rishivan, that also suffered the same challenge that for the first few months, it struggled because the OTA -- even though Orchid is popular everywhere else, in Rishikesh, it did not know that Orchid is popular there. But now you find the traction happening through the OTA, you find the traction happening through the web page. So basically, this is where your overall ADR and overall occupancy falls because it takes time for the -- because the base has changed. So, that's why basically -- so when we talk about Orchid Mumbai as a stand-alone, there is an ADR -- minor ADR up based on the market circumstances. There is no -- in fact, the occupancy also has a couple of percentages gone up. But when you talk Orchid as a brand, it shows that it has dropped because of the new additions of hotels. So, this is a continuing thing which will happen as new hotels will come. And as our Orchid, as our IRA, as our brand base becomes bigger, these new additions will not affect it to so much. It will affect it in minor. So, that's how basically then the -- so even jumps will not seen extreme and even the drops will not be seen in an extreme or in a higher case.

Okay. So, should we assume that our EBITDA and PAT also will -- I won't say suffer, but be on a lower range if this effect happens?

Now, this has already happened. So whatever PAT and whatever EBITDA you see now is based on already what I've explained. So next year onwards, you will actually find the gain in the EBITDA and the gain in the PAT or -- not PAT, but let's say, EBITDA. PAT being something else. But there's a gain in the EBITDA because the EBITDA will now improve as the hotels start performing. So, Orchid Rishivan in the first few months didn't have the kind of traction. It did not have the kind of sale. Why? Because it takes time for a new hotel to get the weddings, get the other things, get this BOB up, get the things done and because of which basically we took time. But after that, now weddings are coming. Now corporate movements are coming. Now, FIT from various OTA channels are coming, even our direct member base. Our Orchid Reward program, people are going, then word of mouth spreads, local agents are there. So, this is how basically now Rishivan is on track. Similarly, Porvorim, when it started off, today in Porvorim, we have some airlines also. Today, Orchid is a preferred group for IndiGo and for Akasa. We work for Air India. Now, we get in sporadic. But these are the airlines who support us across India. We have a tie-up with them across wherever there is an airport and we are near to it, we are a preferred choice because of our -- the way we handle the air hostesses, the girls. They feel happy. They feel taken care of. They feel a home away from home. And that's how basically whether it's Bhubaneshwar, whether it's Mumbai. So, coming back to the main point is that we basically will have a better EBITDA because now these hotels will perform since they opened last year. Some have opened 4 months back from the 31st of March. Some have opened 3 months back, 4 months back, 6 months back. So, they take time to perform like Chandigarh. Chandigarh last year did not perform to its expected because it opened in April and in May, we had Operation Sindoor. Correct. So 4 months, Chandigarh suffered because the airport was in a hot zone unlike Mumbai and Delhi, where at least there were some flights happening. There was a traction happening. But in Chandigarh and then entire belt, it was absolutely no aviation happening. So, people were stuck. They were going to other places and taking their flights. So, this is basically the difference, which we will see this year in the additional improvement of EBITDA by these hotels performing.

Right. Sir, one question more before I join back. On our upcoming projects, especially the projects, which were due to open in June and September and because of this LPG crisis and as you explained in your opening remarks as well, because geopolitical uncertainties, we can't do much. So are these on track? Or how do you see the landscape evolving?

So, I definitely see that not only ours, anybody's projects will have some hiccups and they will have to manage those hiccups because your availability of imported goods, your availability of -- within India also manufacturing, there are challenges. There are various issues happening at -- see, when you make a renovation, you might have the cement, not a problem. It's in India. It's available. You might have other materials. But one odd material might be there, which is coming from abroad, which as much as you need is not there. Suddenly, you needed, say, 10,000 square feet or 8,000 square feet [Foreign Language]. Now the architect has to go back, think what can be the alternative. These are practical problems we faced, I'm sharing with you that these have been challenges we have faced that suddenly the availability, the time lines all are going for a toss because you earlier were doing just-in-time method, say, about a year back when everything was hunky-dory and [Foreign Language]. But now there is a gap. So, we have to manage it. Now it is -- the plus point is that it is the owner's headache. The negative point is that we are -- we are also bound with them, and we want it, that we are losing opportunity. Today, our Dehradun, if it was ready, which should have been ready at least 1.5 years back based on certain things that have to be done. If this hotel was ready, it would have been doing exceedingly well because the Dehradun market was very buoyant, extremely buoyant. By the time it actually comes, I do not know. We estimate it to come in September, okay? By the time if it comes actually, what will be the scenario? We don't know. So, our also internal planning go for a toss. The only plus point is that [Foreign Language]. But the real reason we got into this marriage is for opportunity, not for saving fictitious interest of my money, which is not the fact that way.

The next question is from the line of [ Pankaj ] from Axis Capital.

A couple of questions on business and a couple of on financial side. One is the IRA Mumbai facility, I've given to understand it has discontinued since April 1. So, a question is that what contribution it played both on top line and bottom line in FY '26? And how are we going to kind of -- how are we planning to recover this loss on both the parameters? The second question, you did explain the occupancy challenges you're facing right now. And you also mentioned that in Fort JadhavGADH, you actually had some more issues. Can you just put more color on that? And at 29% occupancy, is it really breaking even? Or are we making losses? And whatever the strategy is you're planning to kind of counter on that? My last question on the financial side is we have seen a compression of almost like 4% on EBITDA from FY '25 to FY '26. So if you can just put us or help us with more color on that? And are these costs -- the increase in costs because of the Middle East crisis? If yes, then are they sustainable? Or are we going to see the impact in FY '27 also?

So, let me start off with the easy one, Fort JadhavGADH, okay, in short answer. Fort JadhavGADH, basically, we had some leadership change. We had some things over there done. And there was basically some sort of strategy change, which we have. Now this year, we have a tie-up with more vendors in terms of the weddings and all, where earlier we had a tie-up with some limited vendors and that was not performing, okay? So it's -- actually, JadhavGADH is an emotionally very high product for us. We have a great affinity, being very proud of what we have created over there, having a lot of emotion. But in terms of the financial context, definitely, it is making money and it has done very well in the past. And this year, in fact, it will do exceedingly well more than previous year or so. But the thing is that it's not a loss or that kind of what you mentioned and all that. And overall, it is there in terms of this thing. And what -- basically, we had to make some more changes in terms of how we are selling it. So basically, that is the major thing. We have done some improvements, which did not go in. See, what happens is you have to keep tinkering. If you keep doing the same thing, you will get the same results. So if you want an improvement, you have to do something new. So each time, like example, when we changed our -- I'll give you a practical example. When we changed our Orchid Hotel website because our Orchid Hotel website was -- while it was very good, but it was very functional looking. It was not aspirational looking. It was doing the job of what we were. But considering where we are going with the way Pune Orchid has been renovated, we have Fort JadhavGADH, we have Orchid Rishivan. We have already Orchid Mumbai. We have beautiful more, Orchid Passaros. Our Orchid Passaros initially did not do well for multiple months because it was a child-free resort. We were not taking people under the age of 15. And what was happening was that there was a resistance in the market. And ultimately, what happened once people realize that no, these guys are dead serious, they are sticking to their ethos, their values that no, if I go with my wife or if I go alone, whether a single man, single lady as a single traveler or if I'm not going to be disturbed by children. Not that I have anything against them, but I don't want to go to a resort where it's like if you are vegetarian, sir, you may not want to go to a non-veg restaurant. It is your choice. It is your desire. [Foreign Language]. So accordingly, when the market realized, it has done exceedingly well after that. So this year, we are getting a lot of advanced queries from such groups who are like [Foreign Language]. Where are we going? [Foreign Language]. So all these kind of products, which are positioning themselves in a much different quadrant is basically the aspiration. So, we changed our web page. And what happened when we changed our web page? Our business dropped drastically. Even though the website was beautiful. Why? Because the world doesn't work the way we think. The algorithm in Google suddenly said [Foreign Language]. So, we had to do a lot of -- again, spend money, bring SEO, do the marketing, again, do the right linkages. It took us 4 months to bring our web page back to a certain level and touch wood again, the kind of volume that we're doing again is back on track. So, we thought we were doing very nice thing by changing the website, but the business fell. So, these things happen in our thing. But now long-term, Orchid Hotel web page will get its long-term benefit, which is already getting. Our last year business compared to this year has been more through our website. So, these are the kind of examples, which are not worth for me to take for everyone's time just for Fort JadhavGADH. Let me tell you the more important broader issues about like IRA Mumbai. So IRA Mumbai was contributing top line almost INR 50 crores. That INR 50 crores is now not going to be there because this is basically earlier lease, so the revenue was captured by us. But now let me come to the EBITDA side. There was an EBITDA neutral. In fact, I would say a marginal maybe INR 1 crores, INR 1.5 crores EBITDA draining because of the admin cost when you add because on a top line of INR 50 crores, it was doing a INR 20 crores almost EBITDA, almost, okay? Because of which the EBITDA will go up because of IRA not being there. So you can say technically, it's EBITDA positive by INR 1 crores, INR 1.5 crores, INR 2 crores at least. Yes, while emotionally, we have lost our property, which we had already sold. So it's not that it's something new. We already got somebody else's. We were now managing it. And now that person has decided and rightfully, he is the owner. So he has said, [Foreign Language] we have peacefully vacated basically the thing in terms of moving out from there in terms of giving our thing of 31st thing. So in the financial impact, INR 50 crores future will be down. EBITDA will go up by anywhere between INR 1 to INR 2 crores, at least, at least, okay? Secondly, coming to the financial side, 4%. This is a very pertinent point. I'm glad you asked this because I was anyways going to take it up later on. One of the major costs, if you see, sir, has gone up is our labor cost. Our labor cost has gone up considerably. And for that, there is a very good reason we have. And I will break that reason, and that will solve your problem of the issue on the short-term and long-term or permanent or nonpermanent. So second, yes. So basically, what we see is there is an impact to our labor cost. And one of the major reasons is basically the annual salary revisions based on the New Wage Code. The New Wage Code impact, which has happened, which I'm sure you must have heard in many other investor calls also, that has basically played a significant impact. So first and foremostly, the Wage Code impact has been about INR 4 crores, which is there to stay. But what is not there to stay is approximately, you can say, INR 2 crores of impact in terms of payout from the closure of IRA. So INR 2 crores of EBITDA approximately again, INR 175 crores, say, INR 2 crores broadly is a figure, which basically is a 1-month salary which we have paid to those who have not wanted to continue with us. We had offered everybody relocation opportunities based on where they start from. If they are from Gadwal, they could go Rushivan. If they are from North, they could go to Noida or whatever. We have given opportunity to whoseever wants to continue within the Kamat family as they are -- Kamat Khandan members, we have given them first choice. Many of them chose not to relocate because Mumbai has its own charm and they did not want to. So there was a payout. Out of this, whoseever has continued in that service, there has been no payout. That has been the [ Euler ]. But there has been a gratuity payment, I think, INR 0.50 lakhs, INR 0.55 lakhs approximately between that has been the gratuity payment. There have been various other settlements. There have been other -- so that INR 2 crores broad impact is a onetime impact which is there. Apart from this, the new hotels have also increased our payroll cost, which in the coming year will get absorbed in their holistic performance. For example, Chandigarh, we have almost INR 6 crore impact of Chandigarh salary. But the last year, it did not perform. It only performed INR 14 crores. But this year, we expect it to do INR 20 crores north. So now the minute it does north of INR 20 crores, INR 22 crores, this salary impact will become as per the norms, which is basically that it should be roughly around anywhere between 22%, 23%, 22%, we will target in that fashion, for example. So then is Hyderabad, the preopening expense and then the full year impact not been. Same way Orchid Rishivan. Orchid Rishivan also salary has added to our salary cost. So primarily this Wage Bill of ours, our target is to bring this down by performance and by rationalization wherever required as per -- we don't fire anyone. Even in the case of if we find that any automation we've done and people are redundant as a company policy, as a Kamat policy, family policy, we don't kick out anyone. We don't retrench anyone. We [ re-issued ] them into some other role or we basically parallel moved them into another role. So this way basically we do. So these are the main impacts of the financial. Some of these are here to stay, but will get absorbed through performance. Some of them are here to stay because of the Wage Bill, which are not going to -- and then some are onetime impact.

I think fairly detailed clarification for that. On quick one follow-up on IRA. You mentioned that there would be a drop by almost like INR 50-odd crores on top line. So are we expecting a degrowth at least in terms of top line? You mentioned -- you clarified that on EBITDA, this will have a minimal impact, but?

INR 50 crores, you take that this year, we almost did INR 400 crores. We were down by only INR 20 lakh on a total company level. That top line INR 50 crores minus and EBITDA [Foreign Language].

[Foreign Language] we might see even a degrowth at least in terms of top line, if not in terms of bottom line.

Absolutely, sir. We will have. But then other properties will fill into this gap, okay, whatever expansions we are doing, whatever the current hotels which have not performed fully last year will perform this year. So we will find accordingly a replacement in that sense. But yes, that INR 50 crores or whatever caluculation.

Last question, sir. Fort JadhavGADH, is there a target occupancy you are planning for this FY '27?

Sir, I think let us give other chance please let's come back, sir, if you don't mind.

The next question is from the line of Gunit Singh from Counter Cyclical PMS.

So firstly, I would like to understand the other income of INR 10 crores in the P&L and also why have our finance cost increased to INR 10 crores, whereas our total borrowings have gone down to, I think, about INR 107 crores?

So one is the other income are basically, we have a lot of miscellaneous incomes also. We have rental income. We have other income from cross basically interest from our companies given to each other. Then there are miscellaneous income, which don't fall in the bracket of our core operational income. That is basically it's like example, in our corporate office KHIL House, we have office space, which is given on rent. A few crores come from that. Then we have various other locations also which we have as part of the company from where you get miscellaneous income, rental income, others giving. So it's basically that, sir. It's mainly -- and then there is a fair amount of portion on that, which is interest, which basically the company has given. For example, one of the loans which was given at that time was to a company which is a sister concern is Ilex was having a loan of INR 5 crores, but Ilex has done exceedingly well. It has paid off that loan to KHIL and it has paid interest also. So the interest portion would have come in other income. And that INR 5 crore loan, which Ilex has taken that it has paid back to KHIL, KHIL is going to utilize that in FD for future contingency for future. That's why basically our Kamat Hotels cash balance has been very robust and gone up. So we have a good -- very good cash in hand, particularly for contingencies such as Corona or Ukraine war or Iran war or all these kind of things that keep happening every 6 months.

Can you give a breakdown of the other income because INR 10 crores is -- INR 5 crores, the onetime loan given.

I will do one thing, sir. [Foreign Language] We will -- I'll send you the detailed breakdown of that, okay, in that fashion.

And what about the finance cost, INR 10 crores seems to be a bit.

Finance cost -- let me get back to you on this. In the meantime, [Foreign Language] when we come back to the round of question, we will give you the answer. Let me just get back to you on this, sir. Please go ahead.

So my next question is regarding the outlook for the coming year. So if we look at the ARR that has been falling across all our verticals, whether it's Orchid or Toyam or IRA.

I already answered this question. Sir, I answered this question before. I'll just repeat in very short. Because new hotels have come and the base has become bigger you can see IRA has fallen.

I'll continue my question. So my question is that since new hotels are coming up that you mentioned, so what -- which all properties do you think which did not mature in FY '26 and you expect significant growth in FY '27, if you can mention the properties?

All of them, sir. All the properties which have been opened will mature this year, all, whether it's Panchgani, whether it's Rishivan, whether it is all, all of them because you require a stabilization time. That pain has been taken last year. So this year will be the gain. It is for all. Sambhajinagar when it opened, it was in loss. Today, Sambhajinagar is in profit. Sambhajinagar has now stabilized because it is the second year running. Whatever pain had to happen has happened in its first year. And that's why it is now doing exceedingly well. So it happens for all the hotels. So you take it for all the hotels that this year will be better where they will be EBITDA contributing rather than being negative in terms of their preopening costs and others becoming EBITDA negative.

Basically, this IRA Mumbai is going out of the picture. So for -- even if we exclude the revenue of IRA Mumbai from our top line, it comes to about INR 330 crores, INR 340 crores currently. So what kind of growth do we expect in FY '27, if you would like to give a number in terms of top line and what?

No, sir, because I would not like to speculate anything right now, okay, considering various things. I would not like to speculate on any or give any guidance or give any kind of input on that point. Let's just give someone else a point.

The next question is from the line of Sagar Tanna from Alchemie Ventures.

Can you quantify how many keys did we open in FY '26?

Yes, one second. So we opened approximately -- let me just take out that. Okay. What is the next question, sir, while I get the details on this one.

If you can quantify how much was the EBITDA drag from the newer properties?

Okay, one second, I'll tell you. Approximately 250 keys were added to 260 keys. This is my browsing, in case if I missed out any hotel, but 260 keys we added. That is what we added. And what is the EBITDA drag? The EBITDA drag actually would be -- if see now, there are 2 ways to look at it. One is basically that these are the sunk cost and one is the operating cost. Broadly, if I have to say that -- I would say that you can take INR 10 crores broadly as the drag in terms of -- if I was to say this is the labor cost, this is the deployment cost, this is the various other expenses. But out of this, INR 6 crores will [ mota-mota ] come back into circulation through the routine operations. So they will get absorbed as part of our GOP. That's the thumb rule which we say that if a hotel is doing INR 100, then the thumb rule is that it will do a GOP of 35%, suppose. So those expenses will come in next year in that 35% -- sorry, in that 65%. So preopening cost was a burden before, but then it becomes part of your operations. So that's how the EBITDA will improve.

Got it. And how many keys do we think we will be able to operationalize in FY '27?

This year, we should be looking at operating additionally opening at least 150 to 200 keys. But I'm being very modest based on the what I see right now in hand, not for the full year. I'm assuming based on only what I have in hand. So the entire year is left for us to look at our sign-ups, the entire this thing -- further is basically there. So this is only what we see as of now.

[Operator Instructions] The next question is from the line of [ Runit Kapoor from Investile Investments ].

So I wanted to know that since you said that you have retained your employees for IRA Orchid Mumbai. So what will be the additional burden due to this employee cost for that?

Sir, there is no additional burden because what -- wherever the vacancies were there, we opened those vacancies for first come, first serve basis to our employees or IRA. So they have been absorbed in the hotels where there was a vacancy. So it has not been a forced -- employment. It has been voluntary where they have said that these are the opportunities who would like to take it best? And based on that, they have either taken the opportunities or they have moved on. So the impact of the people who have moved to our various hotels is that they are absorbed in that payroll. The impact of those who have moved out of our system by taking another job by resigning, there we have paid them their existing salary and a month's pay. So when it closed on 31st of March, they obviously got the salary of 31st of March. And then they have been paid 1 month notice period and whatever additional as per government norms, the dues are there, gratuity, PF, the salary, any other additional, whatever is there and the matters have been -- because see, we want these people back. It's not their fault that IRA is to close. So we want their goodwill, and we want that whenever needed, some of them join us back. In fact, some who left us have rejoined us when the vacancies have opened in our various hotels. One has gone to Panchgani, one has joined in Orchid Mumbai, one has joined. So basically, the point is that they have the affection. It's just that since we don't have the space, they've gone somewhere else and then they'll join back to Kamat whenever the opportunity arises. So there has been no financial impact beyond our routine payments, which are supposed to be done as per the law and as per what is right to them. And there is nothing as an extra burden on our payroll currently.

Okay. And secondly, so are we looking at any large hotel to overcome this loss of revenue?

100%. We are definitely looking at -- one is that the current new openings and the old -- firstly, let me take the old hotels we have partially opened. This year, we'll give their full performance. So they will fill this hole. Apart from that, some new hotel openings which are going to happen, they should also fill this hole. And then some tie-ups which are going to happen, which at the appropriate time will be announced, will add to take it up further beyond that.

Okay. And my last question is regarding this Ilex Developers. I think IRA Orchid Bhubaneshwar. I think the company has only around 32% stake in this. So are we planning to convert it into the 100% stake because balance is by the promoters only?

Correct. As of now, sir, currently, there is no plans. As and when there is, we will inform everybody.

[Operator Instructions] The next question is from the line of [ Sanjeev Pandya from Lanex Inset ].

Sir, you talked about income from your surplus assets, which seems to be rather a large number, about INR 10 crores. So on the one hand, you seem to be exercised about the excess assets that you're holding. Now from a debt reduction perspective, we know that a general rule in the market, especially for a company coming out of restructuring is that for every rupee of debt that you pay, you can -- it translates into INR 2 to INR 3 of market cap that you get as the risk perception on the company starts to go down. I also heard you say that you are now carrying excess cash. So what would be the return on that excess cash given that you are already -- your interest rate is a little higher than average?

So sir, our current interest rate from Axis Finance is at 9.75%. And we have INR 86 crores as our total company loan. And we have cash in hand, approximately exact if I have to -- don't know, but between INR 35 crores and INR 40 crores. I think it's around INR 40 crores. And our EBITDA is what it is INR 110 crores and our EBITDA is INR 110 crores. So we've come out of our problem, sir, thanks to our investors at that time, thanks to people who funded us in 2022. So there is now particularly no company stress and we don't intend to do anything which will unnecessarily create that repeat telecast in the past. We have learned our lessons. We've done our needful. So I think financially, we are quite comfortable in terms of fulfilling our obligations to our lenders. And we are okay, sir, in that regard and still expanding. And whatever, by the way, expansions we are doing, we are doing from internal accrual using our EBITDA. So the cash which is there, which is generated is helping us enhance our properties or do the expansion or whatever the things are there.

But it is not going to be used to prepay any debt?

Sir, there is no point in me prepaying INR 86 crores with this INR 40 crores and bring it down to INR 46 crores because I'd rather have contingency in my hand, which is basically the thing. Now one of the things, sir, I can like to explain because you asked about this INR 10 crores, which is there. One of the things also is that this also INR 10 crores has income tax refund, which is approximately INR 3 crores worth of income tax refund, which is there, rent is there. So like I said, miscellaneous income, sir, which is there are in this, which you asked, INR 10 crores.

[Operator Instructions]

I think if there are no further questions, we can end the conference madam. You can ask last and if no one has -- and by the way, if anybody still does have and does not want to ask on this forum, we have always been more than welcome to have you reach out to me or Mr. Nikhil. Yes, one thing I'd like to mention for everybody. I'm very, very glad to inform everyone, as you may have read on the stock exchange or if you have not, that we have Mr. Milind Wadekar joining us as our CFO. Mr. Milind Wadekar is a very seasoned industry professional. He has been a part of Chalet Hotels for 15 years. He was the CFO of Chalet from which after he moved to Ventive, Chalet being one of the largest listed companies, Ventive also is in the top, if I'm mistake, not top 5, top 8 in terms of market cap. And main important thing is that we are getting a person who ethos matches, he's thoroughbred from the industry. He was earlier the CFO of Leela also earlier before moving to Chalet. So he knows our industry. And we are going to be having a person who will be able to present Kamat better, guide Kamat better. He is already a person who is known in the market and is this thing to be cost conscious. So this year, particularly our EBITDA enhancement in terms of improved processes, improved systems. So we are very lucky that we are getting a gentleman from such a staunch background, a very stalwart from the industry joining Kamat. And if he's joining Kamat at the stage at which we are is because he also sees that where Kamat wishes to go and how he can be an integral part of this journey in the future. So I think this is something which I would definitely like to have all our listeners note and appreciate. And if there is anything about this, they can reach out to Mr. Nikhil, they can reach out to me. So I look forward to working extensively closely with Mr. Milind. And I'm sure all of you will find him also because he's already doing a lot of Investor Relations and investor meets and outreach for Ventive. So he will -- in fact, wherever we lack, he will guide us to improve and become better. So we also will -- I think that's something I look forward to. So this is something I did want to mention. I forgot to mention it before. So thank you.

Thank you very much. [Operator Instructions] As there are no further questions from the participants, I now hand the conference over to management for their closing comments.

So thank you, everyone. I really appreciate the questions. This time were much, much more different. They were more interesting in terms of a much wider and the thing. I think if there's still -- I would like to repeat that if still anyone has any questions, doubt, queries, please don't hesitate to reach out to Mr. Nikhil or to me. We are more than welcome to answer. Many of you all do tend to come and meet us off and on based on -- and it's not only about Kamat. We are here in general also. We know that if our sector thrives, we thrive, only we thriving will not be the thing. So if you have in general also any particular thing, we are open to giving our perspective on whatever it would be. So thank you, everybody. I appreciate the high attendance that we regularly get, and I appreciate all of you taking this 1 hour time out. Thank you.

Thank you. Ladies and gentlemen, on behalf of Kamat Hotels India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.