Royal Orchid Hotels Limited (ROHLTD) Earnings Call Transcript & Summary

Ladies and gentlemen, I welcome you all to the Q3 FY '24 Post Earnings Conference Call of Royal Orchid Hotels Limited. Today on the call from the management, we have with us, Mr. Chander Baljee, Chairman and Managing Director; Mr. Philip Logan, Chief Operating Officer; Mr. Amit Jaiswal, Chief Financial Officer. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder, that this call is being recorded. I would now request the management to detail us about the performance highlights for the quarter that went by, the growth plans and the vision for the coming year, post which, we will open the floor for Q&A. Over to you, sir.

Good afternoon, and warm welcome to everyone. Thank you for joining us for the Royal Orchid Hotels Limited Earnings Conference Call for the third quarter for the financial year '23-'24. Please note that the Q3 results, press release and investor presentations are available on the exchanges. I hope you have had the opportunity to browse through the highlights of the performance. Since April '23 onwards, we have seen good business, which is evident from the financial results of the earlier quarters as well as this quarter. In fact, we have built on the success and have added 5 hotels with 210 keys in Q3, and we have added 20 hotels with 1,039 keys since April, which is a record of sorts. The company has posted good growth because of this strong business model and effective risk mitigation strategy. We are working to post better margins than what our company has witnessed in the recent past. Financial highlights for the company for the third quarter ended December 31 on a stand-alone basis are as follows: stand-alone revenue from operations for Q3 was INR 54.74 crores as compared to INR 48.39 crores in Q2, a growth of 13%. This is attributable to increase in new revenue share hotels. Stand-alone EBITDA for Q3 were INR 19.79 crore as compared to INR 17.36 crores, an increase of 14%. Stand-alone PAT before exceptional items for Q3 stood at INR 9.28 crores as compared to INR 8.2 crores in Q3 last year, an increase of 13%. Consolidated revenue from operations for Q3 was INR 86.61 crores as compared to INR 76.53 crores in Q3 of '23, a growth of 13%. This is attributed to increase in new revenue share hotels. Consolidated EBITDA for Q3 was INR 29.43 crores as compared to INR 27.75 crores, an increase of 6%. Consolidated PAT before exceptional item for Q3 stood at INR 15.73 crores compared to INR 15.18 crores (sic) [ INR 15.19 crores ], an increase of 3%. If you compare our numbers with most -- with the same of last quarter, you will find that the consolidated PAT has increased by almost 105%. However, it is not prudent to compare the numbers with last quarter as the business cycle in the hotel industry is different in each of the quarter. I would like to inform you that due to the adoption of Ind AS 116, there was a notional increase in depreciation and finance costs, which has led to decline in PAT by INR 1.17 crores for the 9 months in stand-alone and INR 1.67 crores in consolidated financials for 9 months. I would like to inform you all that we were holding 51% stake in a subsidiary called Icon Hospitality Private Limited, which owns 130-room hotel in CBD, Bangalore. During the quarter, we have purchased the 48.93% stake from our partners at a cost of INR 32 -- INR 34 crore, thus making it a 100% subsidiary. We were able to meet this investment through our internal cash accruals. In the last quarter, we said that we'll cross 100 hotels soon. We are happy to announce that our vision to operate 100 hotels have been fulfilled, and we are -- as a company, are operating over 100 hotels. We're looking forward to opening new hotels in different cities in India and abroad. We believe that industry is on a growth path and we are on the right track. We are consolidating our operations, have done some expenses toward major repairs, maintenance during the last 9 months as well as towards strengthening our team to achieve operational excellence. Due to above, our costs did go up marginally, but this will take our company forward in achieving greater results in future. We have taken planned and calculated steps and have looked at our long-term goals and targets. The same is necessary to achieve larger long-term goals. The management has set out a strategy to diversify its product offering, provide unique customer experience and work towards a robust balance sheet. I would like to conclude my opening remarks by saying that we are witnessing major signs of growth in the industry as a whole, which will show up in the overall earnings quality over the next several quarters. Thank you. And now, we can throw the floor open for questions.

[Operator Instructions] We'll take the first question from Chirag.

Yes. I wanted to understand about the managed category. So if I look at FY '23 PPT, we have shown an EBITDA in the managed hotels category, which is coming to roughly 34%. Now, as far as I understand, the EBITDA margins in managed category is very high. So could you quantify what was the EBITDA in managed category for 9 months? And what should be the EBITDA margin going forward in this particular category?

Chirag, this is Amit Jaiswal here. See the EBITDA margin in managed category is definitely better. It is roughly around 50%, but please note that 30% of the managed hotel fees, we take it into the stand-alone as our royalty and the efforts put up by the Royal Orchid company. That is why the EBITDA is shown as around 32%.

So you were saying 50% is the sustainable EBITDA margin...

Yes, yes.

Okay. But isn't that too low? So I'm just asking from the perspective of growth. The growth that we are seeing in the coming years is mainly going to be from the managed category. Now, if I look at the number of room addition and all, maximum is going to be the managed category?

Correct.

The current revenue in Q3, if you see managed category, it was close to INR 8 crores on the basis of whatever 80-odd hotels that we'll be having in the managed category. So that translates to, what, INR 40 lakh, INR 50 lakh management fee per year per hotel. And on that, you are saying it will be only -- 50% of it will be...

Yes, yes. See, please understand, Chirag, that to run this managed hotel portfolio, we need a lot of sales guys across the country. We have the corporate office expenses, the marketing expenses. So all these direct, indirect expenses are there to be taken care of. However, if you really look at the absolute numbers, the absolute numbers are not that great because we only get the management fees out of a hotel. The revenues and the cost sits in the books of the owner.

Yes, but the 8% is the revenue that you are recognizing which is...

Not 8%. Not 8%. The revenue recognized is not 8%. It is around 3% of the top line and 6% to 8% of the operating margins that we recognize.

Okay. No, 8%, I was talking about the management fees.

I'm telling you about the management fees only. It's not 8% of the revenues.

Around 6%...

Around 6% of the revenue, it comes as a management fees to us.

Okay. And 50% of that goes to the bottom line is what you're saying after taking care of all the expenses?

Yes. Yes, true.

Okay. So if you see the recent interview, so Mr. Jaiswal, you mentioned in one of the recent interview that this year we are targeting revenues of INR 350-odd crores with INR 100 crores EBITDA and next year we're targeting INR 450 crores to INR 500 crores of topline with INR 140 crores EBITDA. So this growth -- like when are we expecting the growth in the revenues and the EBITDA when the managed category bucket is so small? Like how much of it is expected from, let's say, the industry growth in the ARRs? And how much of it is expected from managed and the rest?

You would like to take...

Yes. See, we are anticipating a turnover of about -- this year about INR 340 crores, including our Jaipur hotel...

Which is an associate...

Which is an associate, and next year, we are expecting about INR 350 crores plus Jaipur, so it'll come to INR 390 crores next year.

Maybe we'll sort of target INR 400 crores.

Yes. Of course, we will -- we are all -- if situation continues, the way it is going in the economy, we may also touch INR 400 crores next year, which is what we had mentioned earlier also.

And what is the EBITDA margin that you are expecting on this INR 400 crores?

See EBITDA, we're expecting an EBITDA of about INR 110 crores is -- and then including Jaipur will be, what, INR 122 crores.

Okay. But that is a material downgrade from what you guided for earlier. So what are the reasons behind it?

No, we are -- we were anticipating some additional hotels on revenue share and all that, some discussions were going on, some did not materialize. And -- but still, it's going on. And I can't really tell you because unless they're signed, sealed and delivered, I can't tell you that. So I think what we've done is we've gone through our reality check, and this is what we are now anticipating.

Chirag, if you really look at it, this year guideline, we had given around INR 345 crores. We are almost there, including the Jaipur hotel, our -- the turnover of the company would reach around that. And next year, we have -- with the existing hotel growth, we are looking at around INR 390 crores to INR 400 crores of topline. But of course, there are certain hotels which may come up during the course of the year, that we're keeping our fingers crossed. That can add to the revenue...

So are you looking towards adding managed hotels only even going forward? Because I'm just not able to understand the incremental benefits coming out of the managed hotels although in terms of number of hotels, it sounds huge. But when you do the math, when you look at the addition to the bottom line and top line, it's not that significant. So just trying to understand, going forward, how we are planning to grow, that is what I'm trying to understand?

See, we are, as I mentioned to you, that we have added 20 hotels in the last 9 months. This is a record amongst all hotel groups. I don't think anybody has added that many in this particular period of time. And we are expecting -- we already signed about 28 hotels with about 1,600 keys in the next -- already signed, which will be coming during the course of this next year. In addition to that, because our -- we are at various stages of discussion with various hotels, so we expect another 10 hotels, that means not 28, we may add about 38 to 40 hotels in the next one year. And 1,600 is already signed, another 700 keys will be signed, so 2,300 hotels will come. Now we are looking at, at least about 3 hotels in the revenue share in the coming year. We've already done 3 in the last year. And in this coming year also, we are looking at doing either leases or revenue share to about 3 hotels, which is what -- a question which you are asking, will add to our top line. And yes -- but both are required. See, to reach 100 hotels only on our own, it will take us years. But now that when we go to the market and we are saying that we have 100 hotels, people say, "Oh, we'll look at it." Yes, we -- they're worth talking to. So I think it's a big milestone we have achieved. And going forward, whenever anybody calls for discussions, for management or lease, when you tell them that we're 100 hotels, they take us little more seriously.

So broadly, 138 to 140 hotels is what you are saying by end of FY '25 or 1 year from now?

No, up to March '25.

138 to 140 hotels?

Yes.

Okay. Okay. And coming to the ARR in the PPT that you mentioned. So the revised PPT was released today. In that, if I look at the ARR, the ARR in JLO is down roughly 4% Y-o-Y to 5,656. So industry's ARR has grown, right, if you look at it on a Y-o-Y basis. So why has our ARR dropped?

I'll explain this thing to you, Chirag. See what happens is when we add a newer hotel, as Mr. Baljee said we added 2 hotels, so it all depends. This is an average ARR of the company, not the hotel. So if suppose I am sitting at an ARR of, say, INR 5,600, and if I have added a hotel whose ARR is around INR 4,000, so the average ARR comes down a little bit.

Okay. So this is purely because of additional...

Yes, yes, additional. See, similar...

Also it takes time to stabilize the hotel also.

So similarly, in the occupancy level also, if you see, right, in the seat, investors present in the managed seats, see we have added 20 hotels, right, in the current year. So what happens, any hotel comes up, it takes time -- 6 months' time to come to the optimum occupancy. That is why our average occupancy is a little bit -- the existing hotel -- let me tell you, the existing hotels, which were there last year and which are operating this year, they all are doing at an occupancy of around 70 plus. But it is the newer hotels, which brings down the overall occupancy of all the hotels.

Okay. Also, just coming back to the managed category, in managed category, the revenue -- so you said that 6% of the revenues is what we recognize as management fees?

Yes.

Does that also include F&B across all the hotels or we have different capacity with different hotels?

No, no, including F&B.

Okay. Across all the managed hotels, we get revenue shares, and especially even on the F&B segment?

Yes. Yes.

Okay. Just one more question before I go back into the queue. Mr. Baljee, you mentioned during the last con call that -- when you were asked about the next 3, 4-year vision, that we aim to grow at 25% per annum in terms of topline. Now, clearly -- I just want to understand that, let's say, beyond FY '25, how do you see yourselves growing? And what kind of mix would you see -- let's say, if you're aspiring for a 1,000, 1,500-odd rooms additions every year, then what kind of mix are you aspiring in terms of managed and revenue sharing and others? And how should we be working with it? Because I'm just not able to understand if majority of it is going in the managed hotels, then as I said earlier, the number of hotels seems huge. But when you look at the numbers, it is not as inspiring as it looks in the number of hotels. So just trying to understand from you, beyond FY '25, what should be the growth aspirations for the company? And then what next?

See what we're trying to do is after March '25, we are targeting not in terms of numbers of hotels, but larger hotels. See, earlier, people would not take us seriously, and they were not giving us. But we are now targeting. We have told our team also, our cluster heads, including our COO, we're all working towards getting the larger hotels. And our larger hotels are more coming from revenue share basis because if a guy has to give a large hotel on management, then yes, many more options. Whereas if he has to go to revenue share, then he has fewer players in the market. So we are looking at going forward at larger hotel on revenue share, which will give us a huge upside. And so I think our growth post March or April '25 should be exponential. Although number of hotels may -- increase may go down, but we'll grow revenue share at larger hotel, that is what our plan is right now, and we are all working towards that.

We take the next question from Rahul Bhangadia.

I just wanted to understand, sir, how long does it take once you have signed up a property for a management contract? How long does it take for the property to kind of do the required improvements, usurps and then kind of come online?

See, it depends on what stage is the property in. We are taking some hotels, which are already operating hotels. So what we do is we sign up, and only thing we tell them is that we won't put our brand till the renovation is done. So then they give us a renovation plan and depending on the fund's availability, they do the renovation at their own pace. So some things are done within 2 or 3 months and some things take much longer. Like we have a hotel in Amritsar, we have 100-room hotel. He said 50 rooms he will do immediately and 50 rooms he will do a little later. So I think within 6 months, 50 rooms are operational. And balance, he's going to probably finish in the next few months. So I think there is no hard and fast. And there will be some hotels, which are greenfield. It may take 2 or 3 years. And some hotels, which are, they call, brownfield, that means already structure is up, is at advanced stage. So there, we give them some input for the interiors part of it. Most of the other work has already been done. So I would say that there's no hard and fast rule, but -- and some cases, I will also say where people drop off because they said, no, we don't have funds now, I don't think we want to go ahead with it and -- which is, of course, very rare. So I would say -- but in most cases, within 6 to 12 months, after signing the hotels get ready in most cases.

Okay. From where I was coming from, sir, is that FY '23, when we ended, the number that we had in terms of hotels or rooms, which included the signed up rooms also was about 6,500, I'm just rounding off the numbers here. The 6,500 rooms is what we had in operational plus signed up [rooms]. Today, we are at about 5,800, again, rounding off. So that's why I was trying to understand that what we had signed up at the start of the year, we are still a little far away from actually ending up getting all those online as we get closer to the end of the year. So that's why I was trying to understand. And related to that is that now that we are saying that about 7,200 rooms is what we have in terms of operational plus signed up, do you see the 7,200 coming up by March '25, a year from now?

See what we are saying is that today, we have got 5,800 approximately. And in the next 1.5 months, we are likely to open -- out of these 28, which are signed, we may have opened about 6 to 8 hotels, that we will open within this fiscal year. And then balance 22, we will open next year, and I have added to that, we'll open 10 to 12 new hotels which signings will come up during that period. So I think we are very much on track, yes, because so many times that people sign up also, and after that, they develop cold feet and they say that, no, no, we don't want to go ahead or so. But now what we've done is -- because we're finding that there were a lot of delay in some of the projects, so we have actually now got good -- we've added our team of project managers who are monitoring this very carefully on proper bar chart per chart. So now we've come out with a more realistic figure. I'm not saying it's 100% correct, but it's more realistic than what we did in the past. Example, there was a hotel in Varanasi and Lucknow, which we had signed a couple of years back, pre-COVID. There's no sign of those hotels. Now, in fact, the other day I called up these guys. I said [Foreign Language]. He said, no, no, no, hotel [Foreign Language]. So people have run into some problems in the past because of various financial issues and various other issues. But I think people are coming out of it and -- post-COVID particularly. See, there has never been so much interest in the hospitality industry as it is now. I'm looking at this in 2003 to 2008 period when everybody is interested in hotel. In fact, after that, no -- it became untouchable industry, nobody wanted to invest in the hotel, and no banks wanted to finance. But now we are finding that banks are interested in financing, and in fact, we had got a swap of our loan, and we saved substantial interest. HDFC, which used to consider hotel industry as untouchable, they themselves came to us during the COVID time and swapped our loan. Probably they had some inside information that we'll start doing well also. And so we saved a good about 3% on our interest cost. And so I think to my mind, if things are going, and politically, things are very stable, you can see even the mood of the nation of India today, which is very skeptical about Modi Government, saying that Modi government is going to come back. And that is all going to be definitely good for the India story. And I am very, very hopeful for a substantial increase, which is why we've added a lot of management team. And you know, the question you ask me again and again so many years, that who's going to head operations, and we got Mr. Phil Logan. He joined about 6 months back. So luckily, he's got experience in India, so he knows Indian market. And so we hope that with his joining in, we should take the company to newer heights.

What I can say in that regard, just for everyone, is Royal Orchid is very aware of its cost structures. It runs more hotels very well. I think Mr. Baljee has alluded to our vision to get larger hotels. Our finance team is extremely strong. Our operations team is extremely strong actually. And I put that in context against international operators on the ground. What I can also allude to you is that, yes, it does take time for hotels to come to stable, and there's a lot of hotels. So stability takes time to kick in, and it also takes time for the operation, and Royal Orchid is diversified right across the nation. Yes, it's in 16 states, everything from Dharamshala to Bangalore, Pune, right across. So diversification means it's challenging from a human resource factor. It takes time to get the operation correct, but that's all upside.

We'll take the next question from Garvit Goyal.

Am I audible?

Yes, yes.

My question is on guidance. So you provided a guidance for FY '24 INR 350 crores, but if I look at the first 9 months number, we did around INR 220 crores. So what is giving you the confidence to fill the gap? Basically, this gap is huge, around INR 130 crores in Q4.

No, no, INR 220 crores is excluding our Jaipur hotel. INR 230 crores we have done, excluding our Jaipur hotel.

So if I include that Jaipur hotel numbers in first 9 months, so what would be the number?

It is around INR 22 crores.

INR 22 crores in first 9 months for Jaipur hotel?

Yes. Yes.

Understood, sir. That means we will do some...

So it goes to around INR 252 crores.

Right, right, right. It will go around INR 252 crores.

Hopefully, we should be able to touch our target.

Understood, sir. And sir, whether -- are you people like -- you people reduced the guidance for FY '25. So do you people see any kind of risk that is likely to come on an average industry point of view?

No, I don't think there's any risk right now coming in, in the near future because whatever has happened has already happened and nothing worse can happen. If you see COVID happened and -- there will be small things, like example, this year, during the rainy season, we had a big washout in the hill station because of disruption of the roads and stuff like that, but -- it is a major disruption, but impact on our company was little because those are mostly managed hotels, and also smaller hotels. So like in Manali we have a hotel -- we have 2 hotels with 25, 35 rooms, right? So if there is an impact there, it's not very much impacting the company. But yes, these small things will happen. I cannot say because -- but overall, I think we are a stable ship, and the fact that we are diversified across the country, we have got leisure hotels because when the holidays take place the business hotels come down in business, but holiday destinations have gone up. And if you see the trend over the last -- at least post-COVID is that holiday destinations, people have started taking larger number of holidays. We have got in our country 20 long weekends. So there are 4, 4 days holidays during that period. And youngsters today are like calling that, you only live once. Let them go and enjoy whatever we have. They don't want to leave anything for the next generation, don't want to leave for the next life. So that way there is a big boom in this particular holiday destination. Holiday market, there is a big boom. And overall, if you see the economy in all sectors, economy is booming, and I think the business hotels will also continue to do well.

We'll take the next question from Sajal.

I'm assuming I'm audible.

Yes. Yes.

First of all, I would like to thank the entire management team and congratulate them for like achieving the 100-hotel mark, which was being talked about for years now. So congratulations, everyone. My question is around -- first question is around Slide #19 and Slide #20 in the investor presentation. In Slide #19, we are talking of total keys of 4,941 plus 1,039 from the first 9 months. And after that, there have been 2 more announcements of Bhagsunag Hotel and the other hotel at Jamnagar, which adds 81 more keys. But in Slide #20, I see total keys as 5,795, so there is a discrepancy in this, and this number has come down. So is there any hotel that has closed or something like that?

No. See, if -- you're talking about the Slide #19 and 20, right? So in Slide #20, we are adding including the signed hotels.

Okay. Because it mentioned operational as on date...

No, if you see, signed hotels in -- 5,795, so 576 is including all the hotels -- signed hotels, 716 -- we have leased -- what are you comparing, tell me?

Okay. Okay. Let me tell you. So I'm comparing on this slide #19, there's a figure which mentioned total keys for financial year '22-'23, which is 4,941. In addition to that, there are a 9-month, last column, which is 1,039. The total number comes out to be 5,980.

4,931?

No, 1,039 includes [indiscernible], which are there -- 5,600 includes this 1,039.

Yes. Sir, Slide #19 says 4,941 for financial year '22-'23...

One second, Slide #19 shows -- yes, it shows 5,795 total keys, right?

No, Slide -- okay, we might be off. I'm talking about the slide which says segment-wise occupancy, ARR and keys. Here, it says 4,941 in total keys for financial year '22-'23.

Correct, 4,941.

And 1,039 for first 9 months of financial year '23-'24.

Yes.

The total comes to 5,980. Post that, since 31st of December, we have added 28 rooms in Bhagsunag and 53 rooms in Jamnagar. So 81 rooms added to this, it would take the figure to 6,061. Now...

We are showing only till 31st March.

31st December.

Yes, one would -- we have removed 2 hotels.

We have removed 2 hotels?

Yes.

So has there been any communication around that or maybe I missed that?

No, no, no. We have not communicated. See basically, what happens 2 hotels has gone legal. That is why we have still not communicated.

Okay. Fine, sir. The other question is related to -- just give me one sec, I noted it down multiple places. We mentioned around specific steps -- around steps being taken for announcement of the profitability. Can you elaborate on what are the specific steps? And my other question is also related to that.

Specific steps, like we have increased our team, okay? See, we -- a certain team has been included because with the increase in number of hotels you need the team to manage these hotels, right? However, the result would not have come now. It will come in time to come, and these -- all these hotels starts yielding results.

Sure, sir. My other question is also related to like given that ROHL is now a brand well known in the market, and Baljee sir, you actually alluded to some part of that question when you mentioned about HDFC Bank providing a loan. But are there any other operating leverages that we are able to gather because of this enhancement of the brand value in the market and we crossing 100-plus hotels?

See what we are doing now is that lot of brand architecture, we have exercise is going on right now, and we are going to be very shortly introducing an upmarket brand so that -- which will be for 5-star hotels. See because we had got Regenta, Regenta Central, Regenta Place, Regenta Inn, Regenta Resort. So what happened was some of the owners and customers expressed that there's a little confusion because -- so what maybe Taj did some years back and is exercise that we are doing now because we've reached that critical mass of 100 hotels. So we are going to be going forward. There will be upmarket brand. There will be a smart -- we won't call it budget, but smart value brand is going to be introduced. So 2 or 3 brands are going to be introduced within the next 2 or 3 months. And you'll see those announcements very soon. And we hope to take this company to a much larger level and a faster growth trajectory.

Sure, sir. Sir, my other question is, and probably the second last question, which is around -- are there any plans to probably provide some benefits to the shareholders in the form of maybe subdivision of share or something like that because bonus obviously is ruled out? With the kind of growth that we are seeing, that should be ruled out, but any...

So we can't really say at this moment, but we are very well aware of the interest of the shareholder. I being the largest shareholder, so I think whatever you have suggested, right, will definitely benefit me, so you can be rest assured. It's just that there could be 2 opinions about any particular course of action, and we want to tread with little caution. No, that's all. And -- but you can be rest assured that shareholders' interest is top of our mind.

Sure, sir. Sir, one last suggestion before I end. I have been communicating on the -- to the -- I have been sending mails to the CS of the company and probably, Baljee, sir, to you as well. It would be great if there can be an acknowledgment to those mails. Otherwise, we are not sure whether those mails are being received or not or what?

Totally agree with you. What, some mails have not been answered?

Yes. The mail is not around any grievance. It is only about suggestions that are also made in this call. But yes, it would be great if there can be an acknowledgment to the mails.

We will definitely do.

And at the end, thank you very much for all the hard work. It is a great pleasure to be associated with ROHL. And one more suggestion sir, if you might like to consider, and that might increase the occupancy of the hotels as well, which is, if you can provide kind of a special incentives to all the shareholders in terms of their stay in the hotel, that would lead to better occupancy and we staying in our own hotels and promoting them as well.

Certainly, we will consider it. We will certainly consider it.

We'll take the next question from Yash.

Yes. So is there any update on Multi Hotels Limited, the sale of those shares?

Yes, there is a lot of active discussion. As we speak, there are 5 brokers who are working on this. Last time, we had gotten an offer. It was a firm offer, and we were about to close the transaction. Unfortunately, they wanted to buy the land and not the company. So if we had done that, then our money would have been stuck in Tanzania because underdeveloped countries, so repatriation of foreign exchange is difficult. That's why we stepped back. But we are actively pursuing it. And we are hoping -- now for the sale, I cannot really tell you which date, but there is now interest. Earlier, there was no interest at all. Like I said, for hotel industry also in our country, there was -- it was untouchable. Now suddenly, it's become the hot favorite. Similarly, there also, situation in Tanzania has changed dramatically, and we hope to close this very soon.

My next question is, can you give ARR guidance for the next year -- for the next financial year, '25?

Okay. I will just respond to that. Our guidance is -- for JLO hotels, an 8% increase in '24-'25. And for managed properties, 6% is the guidance of ARR lift in fiscal '24-'25.

Perfect. Also, my next question is, why haven't you announced anything for Ayodhya? I mean, aggregators like EaseMyTrip have also launched properties, aggregators that have nothing to do with managing hotels or hotels itself generally. So I just want to know are we behind the curve with the whole Ayodhya thing? Because everybody -- almost every other hotel is launched. Or is it that you don't find it feasible margin-wise, you're not getting enough margins because it's a hot property right now?

No. Ayodhya, there is a lot of land available. There's a lot of hype, and -- but as a company, we are not looking at making major investments in greenfield projects. So that is why we're just watching. There will be a lot of people who are going to construct hotels. That day there was an ad for almost 8 to 10 sites, which are under auction. So those people when they come up with hotels, I'm sure they'll be looking at operators. And so it's not that we are behind the curve, it's just a strategy. Suppose we put in all our money into Ayodhya, then are we missing out on so many other opportunities because we have got to put in money into our Goa hotel, which is our own hotel, we are expanding that hotel. We're expanding our resort in Bangalore. So there is investment required there. So we don't want to spread ourselves too thin. We are waiting and watching. See Tirupati has been a market for a long time, and -- but these are -- all these are usually one-day markets, people go there, do their darshan and move on. So while I will say, yes, you are right, we are very keen on that, our people -- our development people are looking at -- looking out for projects there. And hopefully, we should get something there very soon.

My next question is regarding, since you mentioned the Goa CapEx, could you give me a particular timeline for the Goa CapEx? And you also mentioned something about the Bangalore CapEx, so give me the timelines, the room addition for both, if possible?

See resort within this year, Goa within this next one year.

Next one year in the sense, FY '25 mid, end...

Yes. Yes. I would say, up to March '25 we should have spent this money and got the additional 44 rooms ready, including the Bangalore.

So you're telling me Goa and -- Goa plus Bangalore CapEx, can you tell me the total number of room addition? And both are owned, right?

Both are owned.

Yes. So what is the total number of room addition to both?

In Bangalore, it is 28 rooms. In Goa, it is 40 -- 44 rooms.

Also just one last question...

But both the hotels will see the revenues next year only.

Okay. Understood. So I just want to understand, why is your PPT so vague? I mean, you put 100-plus hotels in your PPT. I just want to know why don't you put the exact number of hotels you are operating because you definitely know the number of hotels you're operating. You put 100-plus in your PPT. I don't know why there's a plus there instead of the exact number of hotels you're operating?

You know what's happening, as I've mentioned to you, in the next one, 1.5 months, we are slated to open 8 to 10 hotels. So every day I don't want to be telling that, okay, it's 101, 102 or whatever it is there. So we've kept it like that, 95-plus, 100-plus as a communication. You see, if I say 101 or if I say 100-plus, it's just a matter of communication. You will find it a little more easy to look at that. So -- but your point is well taken, yes. And all communications could change also. It's very difficult -- like our visiting cards are printed, it says now 100 hotels -- 100-plus hotels. Now it goes to 102 hotels, I can't change it to 102 or something like that.

So we have 8 hotels in full preopening and another 2 with team on the ground. So that should give you an indication of likelihood. However, the technical handover, the final licensing, liquor licensing and other things and local licensing can be quite tricky. So as it's managed, we work with the owners on final licensing and that -- but we have literally 8 to 10 hotels very close, but it could be 6 in this financial year and roll over to the following month, but...

Yes. Also one last thing. With the whole hotels, the way you guys are adding managed properties, which -- are you planning to add more leased properties in the future?

No, we are not adding any -- see whatever we have said in the 2 hotels that we are adding more keys, other hotels, there is no scope for adding in those...

More leased hotel launches, right?

Yes, leased hotels, of course. We are actively...

Yes. But what's the focus -- what's your focus among...

See, ideally you can't say what is the focus. [Foreign Language] lease terms are -- see today what we are doing is we're trying to take hotels on revenue share with minimum guarantee. We have done hotels in the past there with even pure revenue share, so -- where there's no minimum guarantee also. So we've done that in the past. That's our preferred model, but if there's a minimum guarantee required, we're trying to do that. And lease, out of the 3, yes, pure lease is also -- if a hotel is not available, we'll take on a pure lease also.

Also, you said 2 to 3 categories will be announced in the next 3 months, where are you going to focus on? Are you going to focus on the upscale front, meaning the luxury front because you said...

No. We are going to focus on all. There's no definite thing that we are going to focus only on one or so. The focus will be on all. Because we want to increase our footprint in each category.

Different markets offer different opportunities. So that's why we increase all.

Yes. Also, you said in the last con call -- I think you said 50 hotels, so you were targeting 150 hotels by the end of FY '25. Did you correct that to 140 hotels today?

Yes, yes, I would say that. Yes, realistically, yes.

We'll take the next question from the line of Mihir.

Hello, sir, I have one question regarding room additions. So if we see the average room additions for 28 hotels and 1,600 keys, it comes to approx average of 60 keys. Any plans to increase the size of hotels?

Yes, I had mentioned to you earlier. We're actively scouting around for bigger hotels. And that's our strategy now. Because earlier, when you were a smaller player, bigger hotels will not come your way. People will look at maybe larger and bigger brands. But now we are finding that people are ready to talk to you. If you go to a Delhi guy -- a Delhi builder in Gurgaon or so and you're telling him that you got 40, 50 hotels, he may not even -- he probably not even heard of your brand, so much as you have to explain to him this brand. Now the guy has been probably -- most probably heard of our brand, or even if he has not heard, the moment we say 100 hotels, he just sits straight and has a look at it, "Yes, oh, wow, 100 hotels you got." And then, of course, we give our presentation. And so I think larger hotels have started discussions with us now.

We'll take the last question from Sajal.

I missed 1 or 2 questions. Very quickly. Given the focus on Lakshadweep, is there anything that we are doing to get an early-mover advantage in Lakshadweep?

No, we are not looking at luxury because...

Lakshadweep.

Lakshadweep. No, we are not looking at Lakshadweep because those are all greenfield projects, and we don't want to get into anything big. There's a lot of land available. Government is now encouraging us, encouraging people. The same strategy what we mentioned about Ayodhya also that there are lands going to be available, but it will take some time. See as is going to -- there was a tender which had come about 6, 8 months back about Lakshadweep, and we looked at it. Then going there was a challenge. There's one flight going from Cochin only to that place or there's a streamliner which is going to take about 14, 15 hours. So I don't think -- there are plenty of other hunting grounds we have for us to now get into -- first, we have already made an inroad into Sri Lanka and there are some other proposals coming our way, we look at that. And I would like to say that we have done an inroad into Nepal. So we've already signed 3 hotels in Nepal, which should open, so I think -- and without any investment, all these are without any investment at all. So we look at that also first mainly.

Sure, sir. The last one is, if I look at the map of India, that has been -- that is there on the Slide #11, it is evident that we are more focused on western part of India as compared to eastern part of India. The good part is that there are 2 hotels that are coming up, one Tezpur and another one in Puri, which would be on eastern side. Is there a plan to tap the potential for northeast, the 7 sisters?

We already have signed one hotel in Tezpur, which is northeast. But while all this is good to talk about, but the real revenue or the real profits do not come -- even economically, east is not that developed as the other parts of the country. We started from south, and the question which all of you used to ask me in those days that we are only south based. But now I would say that we have a very dynamic Vice President -- Senior Vice President in north who expanded our footprint substantially in the north. So now we have got north, we've got west and we've got south, well covered. The only thing is that we are now focusing on some cities in central India, east, northeast also, and maybe Tamil Nadu and Telangana and Andhra. So we are focusing on that. Recently, I attended a convention in Vizag, and it was my first visit to Vizag also. So we are already talking with -- at least people get to know about our brand. I was invited as a speaker there. So I was talking to them. At least, people got to know that, yes, Royal Orchid and Regenta Hotel also exists. So we're expanding. We are very well aware of it, but you're right, some of the unchartered areas, we'll tread with caution [Foreign Language] and then the owner gets disappointed, we get disappointed, so we are calculating and then taking a step.

Sure, sir. And being from Summer Hill, Shimla, I can very well request that probably you might like to look at introducing the world famous gulab jamuns and grilled sandwich in other parts of -- other hotels as well as a Shimla specialty.

You know what we have done, I'm glad you pointed this out. In our hotels in Shimla, we don't give a welcome drink. We give a welcome gulab jamun. So in the reception counter, we kept some gulab jamun in the fridge and the moment a guest comes, we'll take it out, put it in the microwave oven and heat it and give it to the guests. So they are welcome gulab jamuns and not welcome -- so it's a very good -- I know that our restaurant was very, very famous for last 60 years for -- 60, 70 years for all this, and we will continue to -- continue our legacy.

And that brings us to the end of the conference call. Mr. Baljee, would you like to give some closing comments?

First of all, thank you very much for -- and the questions that you've asked are very relevant. It makes us think. And I think all this con call always gives us -- maybe give us some guidance from you guys, what we should do and what we should not do. So I think it has been very useful for us. I thank you all of you for spending some time and asking questions, because sometimes we become a little complacent if you don't ask difficult questions. But once a difficult question comes, it makes us much more rejuvenated. So I think -- we hope that we'll have a lot of answers to your questions -- more answers in the next quarter, which will be the full-year result also. So thank you very much, and see you next quarter.

Thank you so much, sir. Thank you to all the participants for joining us on this call, and thank you to the management team for giving us their valuable time. You may all log off and disconnect now. Thank you.