Royal Orchid Hotels Limited ($ROHLTD)

Ladies and gentlemen, on behalf of Kaptify Consulting Investor Relations team, I will come you all to the Q4 and FY '26 post earnings conference call of Royal Orchid Hotels Limited. Today on the call from the management team, we have with us Mr. Chander K. Baljee; Chairman and Managing Dieter Mr. Arjun Baljee, President; Mr. Keshav Baljee, Executive Director; Mr. Amit Jaiswal, Chief Financial Officer; and the finance team. 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 brief us about the business and performance highlights for the period ended March 2026, the growth plan and vision for the coming years, post which we will open the floor for Q&A. Over to the management team.

Good afternoon, ladies and gentlemen, valued shareholders, investors and partners. It gives me give great pleasure to welcome all of you to Royal Orchid Hotels earnings call. Royal Orchid Hotels is not simply growing with Indian hospitality industry anymore. We are now building capability, scale and execution strength to shape the future of it. Over the last few years, we have transferred ourselves into a far more agile, disciplined and future-ready hospitality company, one that is driven by profitability, operational excellence and sustainable expansion. Today, Royal Orchid stands stronger than ever before, stronger financially, stronger strategically and significantly more scalable for the future ahead. FY '26 was a year of strong momentum. FY '26 has been a defining year for Royal Orchid Hotels. Despite the highly dynamic market environment, we delivered strong growth while maintaining financial discipline and operational efficiency. On a consolidated basis for FY '26, revenue from operations increased to INR 384 crores from INR 319 crores last year. EBITDA stood at INR 110 crores, reflecting the resilience and efficiency of our operating platform. Profit after tax reached INR 33 crores after exceptional items. Earnings per share stood at INR 11.74 crores. But more importantly, these numbers reflect the quality of our business model. Our growth today is being driven by sustained demand across business and leisure travel, increasing contribution from managed and revenue share properties, stronger ancillary revenues and disciplined execution across the network. This is not accidental. This is growth. This is scalable growth, and this is profitable growth. Building a stronger hospitality enterprise, as Chairman and Managing Director, what gives me the greatest confidence is not only our performance today, but the foundation we are building for the next decade. Royal Orchid Hotels today has a stronger balance sheet, an improved operating leverage, expanding brand visibility and a significantly largest strategic partner. Our consolidated asset base have now crossed INR 1,041 crores, reflecting the strength we are building into the organization. At the same time, we will remain committed to disciplined capital allocation. sustainable returns and long-term shareholder value creation. In line with this confidence, the Board has recommended a final dividend of INR 2.5 per equity share. This reflects our belief that our growth and shareholder value must move together. Execution is becoming our biggest differentiator. In hospitality, strategy alone does not create leadership. Execution does. And this is where Royal Orchid Hotels is increasingly separating itself in the market. The larger ICONIQA Mumbai is not just another addition to our portfolio. It represents our ability to execute faster, optimize investment intelligently, operationalize efficiency and create high-quality hospitality assets with precision. This capability becomes a real competitive advantage for us. Across our brands, Regenta, ICONIQA, Crestoria, Z and [indiscernible], our operation management belief, we're not pursuing expansion by itself. We are building a portfolio that is profitable, scalable, differentiated and resilient across market sectors. India hospitality opportunity is just the beginning. India has one of the most exciting hospital growth sector in [indiscernible], domestic travel is accelerating, aviation currently is expanding rapidly, mobility is strengthening and customers [indiscernible] decisively towards branding experience-led hospitality. Royal Orchid Hotels strategy is positioned at the center of this opportunity. Our diversified presence, business hotels, leisure hotels, life-sized [indiscernible] and hotels. These are both [indiscernible] elements. We're operating 18 cities with nearly 11,000 [indiscernible] hotels, we are steadily building one of India's most scalable hospitality platform. Within 2030, we are [indiscernible] institution. Our ambition for our future is extremely clear. By 2030, we aim to be [indiscernible] 45 hotels, 32,000 keys, strengthened our asset line business model, deeply integrate AI and technology into operations and build connected loyalty ecosystem through [indiscernible]. Our numbers -- our larger vision is even more important. We are building to become an enduring Indian hospitality institution, one that [indiscernible] operational excellence, design intelligence customer [indiscernible] and long-term value creation. Over the years, I've learned that great institutions are not built by speed at all. They're build through consistency and discipline, strong relationship and ability to evolve ahead of the market. To exactly [indiscernible] today. We're confident. We are executing with discipline. We are positioning ourselves for a significant larger future. To our shareholders, investors and partners, thank you for your trust and your support and your particular belief in Royal Orchid Hotels. I can see this complete transition. The next phase of Royal Orchid Hotels is stronger and far more valuable [indiscernible] we've built so far. We are only getting started. Thank you.

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

I have two questions. My first question is to Mr. Baljee is what type of strategic levers is Royal Orchid prioritizing in FY '26/'27 to expand its portfolio beyond the [ 120 ] while managing risk from regulatory changes, rising costs and competitive pressures in the industry? What type of growth corridors are being targeted for the next 6 to 9 months as the company adds 1,800-plus keys? And how is asset-light expansion be balanced with own profits? That's my first question. I'll present a second question after this.

One of the things which we are doing is that we have an upcoming hotel pipeline, which has signed hotels. The large number of hotels, 52 hotels is just signed and comprising of 3,600 rooms. And we staff our development team also now. So they are going around, scouting properties. What has happened is over the last 2, 3 years, people are also approaching us a little earlier that we have these people [indiscernible] ourselves that [indiscernible] hotel to dialogue [indiscernible] all the other chains are based in Delhi and Bombay. So we had greater reach, and now with [indiscernible], we have good reach. And in Delhi also, our hotel is -- in Gurgaon, we increased that. so I think our region, our brand is getting to be stronger and stronger. And so I think the growth on this asset-light strategy, yes, out of the most hotels that we have large number would be [indiscernible], a few will be franchise and a few will be on revenue sharing [indiscernible]. So we're going to expand on all the fronts.

My second question to Mr. Amit is, what type of financial framework are being applied in FY 2027 to align debt majorities and refinancing schedules? With project cash close, given consolidated PAT of about INR 25.11 crores for 9 months FY '26, what type of instruments and safeguards including maybe hedging models, escrow structures or liquidity buffers or whatever you have planned, I mean, planned for deployment over the next 2 to 3 years to secure execution discipline and protect margins?

Okay. So I would like to throw some light on our balance sheet. Okay. If you really look at our balance sheet published yesterday, our cash equivalents is around INR 88 crores in our consolidated balance sheet. And this excludes one of our associated rules we don't consolidate, just the profit we consolidate below the line. So there are also, around INR 14 crores of cash equivalent is there, which means the group is having almost INR 100 crores of cash equivalents today with us to lead the company forward. Second thing, if you look at our borrowings actually, the bank borrowings is around INR 91 crores, including the INR 45 crores of the new ICONIQA bond rate. So there are not that great borrowings which we are having, and we are planning to use the funds for the further growth of the company. We can become debt-free even today also in one shot. But there is on plan that we will grow the company. And as Mr. Baljee already said, that we are following an asset-light strategy wherein we find hotels on management, and then there are some flex leases. So we will be needing some funds for all these flex leases wherein we don't hold any asset. So the kind of funds, what we have, is quite sufficient for the company to grow as per the target, what we have done in our projections.

We'll take the next question from [indiscernible].

Sir, questions from my side. One is what was the impact of the prices in quarter 4 and especially related to the ICONIQA property since that is very close to one of the busiest airports in the country. So that is the first question. And the second question is considering the growth plans that you have highlighted, I just wanted to understand the medium-term guidance, if any management would like to highlight for, say, for '27/'28 on the revenue and the EBITDA side.

Let me tell you one thing. See, we had a lot of plans, like we are adding a lot of revenue share hotels and all. But as far as the guidance is concerned, keeping the geopolitical issues in place, how it is going, it has become very, very difficult for us to give any guidance. However, we have pledged to improve our performance. This year, the number, what you see, that's why I've given the numbers with the ICONIQA and without ICONIQA also. ICONIQA being the first year there was one thing which has hit us which is the Ind As. INR 16 crores Ind AS hit has come, which is notional and which is not in cash. However, the PAT growth without ICONIQA has been around 16.8%, the PAT growth excluding ICONIQA. But because of ICONIQA, first year, we have been hit -- the PAT has been hit because of the Ind AS INR 15 crores. But we are on a growth path. However, last 1 month post war, definitely, the business has got hit. The ADR is in challenge, the occupancies are in challenge and it continues to grow. It continues to be the challenge like that. So unless and until these geopolitical issues come to -- you see the newspaper every day. The cost is going up, this cost is going up and all. Even in Today's Bangalore, if you see Times of India Bangalore, there's a big article on the cost going up and increase in the labor wages and all the stuff. So keeping that in view, it is very difficult for us to give the guidance what you are asking. However, after the first quarter, we'll be in a better position to give you a guidance of what we will be doing in '27/'28. But be rest assured, the company is in the growth path and we will continue to grow the company the way we have planned.

We take the next question from Chirag.

My first question is on this INR 5.5 crore write-off that we have taken pre-expense side of ICONIQA. So was this fully taken in Q4? Or this is for the entire year?

See, what happens, Chirag, see, in the quarter, the auditors do a limited review. And the year-end, they do a full audit of the entire year. So they had done all the transactional audits for the entire year. And it was found that around INR 5.5 crores of pre-operating expenses which we thought we can capitalize it, but the entirely so we have to take that hit.

Sir, there was one more write-off of INR 2 crores that we have taken in Q2. So for the entire year, total INR 7.5 crores...

Yes, INR 7.5 crores operating expenses. Q2, we have taken it ourselves. But when the complete audit happened, so altering disagreement. So we can't go against the order, so we took the hit. However, it was capital in nature, but not strictly capital. That's what their view was there. So we had to take a hit.

Are all write-offs taken, whatever are there? Or there will be further with you next year and there will be some more write-offs?

Yes. It's all taken. This is the first year of operation, Chirag, so we had to do all of them.

Okay. And what was the occupancy of ICONIQA during Q4?

So the occupancy of ICONIQA during Q4 was around -- one second, I'll just tell you. 62%, yes. So the occupancy of ICONIQA was 62% in Q4. See, Jan and Feb went out very well, but there were a lot of cancellations in March. March was when the war began so there are lot cancellations were there.

So what was the occupancy in Jan and Feb, if you can...

January, I think, around 80% was there.

Jan was 80%. And what was Feb?

I'll just tell you. Feb was around 73%.

Okay. One question on managed hotels. So recently, we opened a 70-key hotel in Hyderabad. So if I take some assumptions for ARR and, say, around 60%, 64% odd occupancy, maybe this hotel would generate INR 40 lakh, INR 50 lakh in top line and -- as in the RCL, whatever, 4%, 5% management fee that we get. And if you take 50% double-digit bottom line that you have guided for, for the managed segment, it comes to INR 20 lakh, INR 25 lakh for this hotel. So why are we still taking up small managed hotels? I mean, isn't it better to set a minimum threshold now since...

I can take that. Yes. So look, I agree with you that small hotels will not be a way forward for moving the needle. But it's a performance strategy. So basically, we have the Regenta brand, which will be typically 80 and 60 keys and upwards; Regenta Place brand, which is what this hotels opened under, which is going to be typically 40 to 80 key; and Z by Regenta, which is primarily we're going to grow by franchise, is around 50 keys on average. So while you are right, we have set minimum threshold, by the way. So the number that you are suggesting on a per month basis is actually what we -- maybe double of that on this hotels especially. But there are 12-month thresholds that we set as minimum fees for each of them, which is going to be increasing every year. If you look at the pipeline that is coming up, and I invite you to look at the pipeline screen or the presentation that we shared with you, a lot of those hotels are larger now. So we are looking at having bigger hotels as well. But keep in mind, it is the portfolio strategy in Hyderabad. We will have 6 to 8 hotels, maybe even 10 hotels in the period of 2 or 3 years. So we will have a combination of slightly larger hotels, smaller hotels, et cetera. But what we are doing to increase the top line as well as the bottom line of the company is taking [ plenty ] leases, what the Chairman mentioned as well. And in fact it is a rather lower investment, but it will allow us to increase our top line as well as the bottom line. So I think it's a combination strategy is kind of playing out quite well. But I think the numbers will start to showcase now that the operating leverage will start to kick in because we've got a lot of hotels in certain classes where we will have to invest substantially more to add more [indiscernible].

These managed properties, you're right, small as a matter of scale. If you really look at it, all companies are not looking at that. They are looking at expanding [indiscernible] is looking at expanding as a smaller brand [indiscernible] by India. So I think what strategy is adopting, now others are copying that. So I think we are well placed here. Our risk is very little. So as a matter of case, if you have a hotel giving you INR 3 lakh to INR 1` lakh per month, then it adds up a lot. And the GOP, gross operating profit, on that is substantial. So we are at the takeoff stage as far as this business is concerned, and we'll continue to do that.

We'll take the next question from Mohit.

Sir, we see that we are doing a lot of efforts in expanding our hotel base. From when can we see the actual inflection in numbers on the cash level as well as the PAT level?

So see, if you really look at it, the cash level, you can see the growth is there. We are doing INR 60 crores plus cash at the cash level. But PAT level, PAT level also, this is the first year of the bigger hotel that is ICONIQA, which has added some notional cost of Ind AS into the financials. That is why our PAT, what we are seeing is down because of the Ind AS effect of almost INR 16 crores of one hotel which has come. So if you see our results without Ind AS, yes, I will not say that we have grown a lot because last month became a very disaster for the entire industry. But we are in a growth path. And definitely in the coming years, we will see a better result.

So can we feel like the cash PAT going up to, say, like INR 100 crores by FY '28?

Cash PAT by INR 100 crores?

I don't think we should give any statement at this stage because of this uncertainty in the world. I will refrain from giving any forward-looking statements.

We take the next question from [indiscernible].

Just wanted to understand this ICONIQA number as kind of reported in the same. The without Ind AS number that, sir, you have reported from a Q-on-Q basis, roughly a INR 17 crore top line goes to a INR 24 crore top line. I'm just rounding off the numbers here. But the swing on the EBITDA side is negative even after -- is not that great even after accounting for the INR 5.5 crores hit that you may have taken. So you're essentially moving from a INR 1 crore negative EBITDA to, let's say, EBITDA breakeven situation. Almost INR 7 crores of top line, you would generally assume it this business with fixed was the swing on the bottom line should be much higher. This I want to understand.

No. See, Rahul, I'll tell you one thing. First year of operations. We are also a new market, Bombay market and all. So what has happened is there are a lot of marketing expenses which would have incurred. The real result of that will come in time. So initially, when you launch a property, you have launching expense and then the marketing expense, then there are a lot of stuff which has gone. That is why you are not able to see in ICONIQA a very favorable EBITDA. But a big property of almost 300 rooms with so much F&B and all, so unless we launch it with -- and all these launches cost money. Unless we launch it in a big way, we will not be able to see a big result. See, every day, we start seeing the profit and all. So then we will not invest. See, technically, in the accounting standard, these all expenses what we have done in first 6 months. It's termed as operating expenses. But if you really ask me in a business sense, it is not marketing, it is not an operational expense. It's investments which we have done in the property, which will yield the result in time to come. That's the logic I can give it to you, Rahul.

When we started the hotel, actually, November is the time when we got our license, or [indiscernible]. Until that time, we were just operating just like trial runs. We were doing that. Then we were hit by the airline [indiscernible] chaos. Now, yes, although the thing lasted only a couple of days, but there are few factors there. So occupancies across the group went down for almost 15 days. So I think that is also a cause. And then to add to it, also the war issue has started, and there has been a lot of cancellations here. So I think we hope that all that is now behind us. But then right now, if you look at it, the season is over. You have the winter season and the summer season for all hotels. So we are protecting ourselves and making sure that in the summer months also we don't hit any headwinds. So we're working on that. I think as we're aware of the fact [indiscernible]. Yes, you're right that you new hotels will some time to stabilize.

I just want to give one point, that the hotel has hit #1 on Trip Advisor in Mumbai out of over 800 hotels, which all of you can also verify.

That is really commendable.

Yes, that's a good sign. It's a good sign and good thing. I just wanted to point that out here. Thank you.

Let me take one question from the Q&A box, which is from Mr. Raju. It's regarding the auditor's qualification mentioned.

I'm answering it. I'm answering it.

Yes, if you could answer that. Should we take the next question in the meanwhile?

Yes, yes.

We move to [indiscernible].

Sir, my first question is that what percentage of future EBITDA does the management expect to come from fee-based management income?

You're talking about this financial year? Or you're talking about in the future, like...

In the future.

I would say a part of it [indiscernible] but it does depend on how many facilities we have. Obviously, the idea right now is that for every [indiscernible] one would probably be flex lease, maybe 2 will be a franchise that will be managed. That will be the rough sort of cadence that we have -- I mean, the split that we're talking about. But obviously, the flex lease, we take 100% of the economics when it comes to revenue. And then, of course, our EBITDA number, that is in there. So at this point, we would assume that because we have for our own hotels, we will be growing the JLO segment. The EBITDA calculation is somewhere 1/3 to 1/2. But I mean, maybe just start that depends on how much you sign up for the next 3 to 5 years.

Okay. So my next question is what is the planned CapEx outlay for FY '27 and FY '28?

Planned...

CapEx, CapEx outlay for FY '26 and '27.

CapEx, as we have mentioned, our business model is very, very asset light. So we don't anticipate large CapEx, only in the revenue share of hotels, which are, I can see about 5 of them coming up in the next 1 year. There may be something coming up which is under discussion. But at the moment, we just signed only 5. Those do not require more than INR 5 crores to INR 10 crores as a CapEx. This company has money. It doesn't have to resort to any borrowing or anything like that. We have [indiscernible] as Amit has mentioned that we have, what, INR 100 crores cash within the company. So I don't think this requires anything -- we won't be short of the expansion.

There is some effects, which is more maintenance CapEx and also renovation CapEx required for a couple of our existing hotels. So that's then ongoing and it's already announced that in the past. And that is ongoing renovation as and when we can refurbish or renovate some of those. So that is additional.

Most of resort in Bangalore, we added 28 wooden cottages. We did, through internal, we loan sanction of INR 15 crores for that. But there was enough surplus available in that company. So we did it through our internal resources only. And now we are taking up the halls and the restaurant there also. Hopefully, we should we [indiscernible] internal sources. And of course, if there's a larger capital investment required, then we may resort to taking some loans on the back. But of course, most of our companies are now debt free. So I think banks are more than willing to come and lend us in those companies. So I think on CapEx front, we don't have any worry unless we have an opportunity like the what we shared, which is a large opportunity like ICONIQA that we have. But we don't see that in the immediate future right now.

Okay. Sir, one last question. Could you share the EBITDA margin levels mature for properties versus for the newly launched hotels?

See that EBITDA, we have given one presentation. If you really look at it, I will tell you. Slide #7, no? If you look at the Slide #7, what I've done is I have given you the financials of consolidated, I have also given ICONIQA separately and the existing property of all of other hotels. If you look at the EBITDA of other hotels is around INR 103 crores. And so there I've given it separately. Other than ICONIQA, the EBITDA was INR 103 crores, and ICONIQA EBITDA was INR 7.3 crores. And if we go to Slide #19, in the Slide #19, so I've given separately the managed hotels performance also.

We take the next question from [indiscernible].

Am I audible?

Yes, yes.

Okay. So my question, when do you expect ICONIQA to become profitable at PAT levels?

This year?

So as far as PAT level profitability is concerned, it will be profitable in '26/'27 itself. But the Ind AS, there is a provision which comes because of Ind AS. So we'll have to evaluate that also is this year. Probably this year also, PAT will be negative. And maybe in '27/'28, we will move to a profitable position, the notional Ind AS if we remove.

And my other question is the growth coming mainly from [indiscernible] or because of more hotels in their portfolios?

Come again? I couldn't hear you.

Is the growth coming mainly from better sizing or because of more hotels in the portfolio?

No, no. See, if you look at our slides, I've given give you the pricing also. So we have done a considerable growth as far as the ADR is concerned. The average rate has grown in our presentation I have given. So from INR 5,800, we have grown to INR 6,000. And occupancy, however, the occupancy remained the same for last year. So occupancy would have grown a notch above had the market not hit because of the war. So in the current year, it is very difficult. However, we are looking at a growth in the area, but occupancy depends on the market scenario.

We'll take a follow-up question from Chirag.

What's the occupancy for ICONIQA in the current quarter? How is the trend looking like?

In the current quarter, we are doing 81% occupancy, Chirag.

Is this the current occupancy or average so far?

No, no, April and May, I'm talking.

We'll take one question from the Q&A again from Kumar. What is the share of international travelers in the Royal Orchid guest mix? And what would be the same for guests from the Middle East region if you track this data?

See, as far as the international travelers are concerned, I've given you the figures -- detailed figure in the guest breakup list. If you really look at it, in '26, 30,000, means almost 19% guests were international travelers as against 80.8% guests are domestic.

And his question is do you have data how much of this would be from Middle East, the international travelers?

Middle East data is very difficult to say right now. We don't have the data like how much.

Sorry, Arjun Baljee here. I just want to highlight. It isn't so much as the Middle Eastern travelers as much as the market share of Middle Eastern flight arrivals into India. And you've got most of the travelers that are connecting through the Middle Eastern carriers. And just remember that the Middle Eastern carriers had close to 40% market share of inbound into India. That I think is -- that is what was disrupted because of war.

We'll take the next question from Mara.

Sir, just wanted to check on Slide 24. You have given the upcoming pipeline, so which says that 52 hotels and about 3,600 keys approximately. Sir, just wanted to check, out of this pipeline, what would be the key count of revenue share? I can see that there are 5 properties on revenue share. So what would be approximate key count that you're looking at revenue share? And if you can provide the timeline for the same.

It's very difficult right now to say that because, see, what happens is the revenue share price, the control is not in our hands of the date of opening. And the quality of the product, we do monitor. But sometimes what happens is that the owner has the final say. He may have some exchange in terms of this thing. So I'll just say we won't hazard a guess.

We've got about 522 keys for revenue sharing, which is what we have disclosed. This is roughly that's what it is.

Around 500 and odd keys will come in revenue share. And we are hopeful that, that should come within this year. But as Mr. Baljee rightly said, they are under construction. So when it will come exactly, very difficult to say.

Yes. Also construction also had been relatively disrupted due to the war. A lot of the costs have gone up. So there is some slowdown in construction in general. I'm nothing saying specific to our hotels but in general. So we could anticipate certain impacts a few quarters down the line. This is what we are -- that's why we are not having a guess at to the opening days due to that.

Like this has been a problem in sourcing times of war because LPG prices. So one of the projects have been delayed because of that. So there's many factors. So I would not like to give you specific days of what will happen. But we are doing our best.

And whenever we open the hotel, we do an announcement.

Okay, okay. Sir, just a general feedback. If you could in future give a key-wise split and expected announcement. Obviously, I understand that this situation is a bit different. But in a normal course, if you can incorporate that things in the presentation, that would be of great help.

Key-wise, we can give. No problem.

We'll take a follow-up question from Rahul.

If you could just give us a sense from the subsidiary numbers, which is in the managed side of the business. I think last year, we had some INR 38 crores to INR 39 crores of top line there. What is the number for FY '26?

One second, Rahul. So there, we have done a top line of almost INR 55 crores, INR 56 crores.

And what would be the profitability there? Because that's...

Around INR 20 crores is the profitability.

INR 20 crores is the PBT number? Or...

No. INR 20 crores is the EBITDA number. And after that, we transferred 5% as a brand fee to the parent company. So the PBT number is around INR 17-odd crores.

So that business has really come down well in the strength from what we saw 3 years or 4 years back when you started to take top line.

Yes, absolutely. Absolutely.

That INR 15, INR 20 crores top line has now become a INR 55 crore top line with actually a bottom line of almost INR 20 cr, isn't it? INR 2.5 crores being transferred to the parent [indiscernible].

Yes, yes. [indiscernible] Rahul as we add so many hotels which are there in the pipeline, which we have, it will grow further.

Okay. And maybe [indiscernible] kind of -- I don't know if there is a situation to unlock at value somewhere because [indiscernible] assuming it's going to be very high fee with no major capital requirements at a because it's the finest fee.

Yes, definitely.

We'll take the next question from Majid.

Sir, my first question I have is immediately what is the divergence in occupancy between JLO and managed, sir, the occupancy of JLO...

See, managed total what happens in that, Majid, is that there will be a lot of hotels which you would have added in the current year. So those hotels -- see, any hotels, when you open, it takes a little bit time to grow the occupancy. That is why if you really look at the existing hotel -- managed hotels which were existing last year also, they are doing well. They are in the around 67%, 68% occupancy. But it's a new hotel which has just started. So there, occupancy average of is the managed hotel occupancy. That's why you're seeing at 62%.

Some of the hotels or managed hotels are in resort locations. So by nature, the occupancy of those hotels will be stable. So it won't match the city hotels.

And sir, secondly, regarding the [indiscernible] we have seen some kind of spike, some 21% to 30% this quarter. So going forward, how are we looking? Because the pace of growth has also monitored in F&B revenues and the cost has gone up. So how are you looking to manage that? And you see the pressure is expected to...

No, no. Majid, if you really look at the F&B cost, it has gone up because of the new hotel ICONIQA which we have opened. So as you rightly said, those write-offs were a lot of F&B was involved. But if you really the write-off as earlier, we discussed INR 5.5 crores of the expenses. So a lot of F&B costs were there, and that is what you have seen. Otherwise, we will be holding around that percentage only what we have been doing.

So maybe is it an inventory rate up?

Yes. ICONIQA we opened 290 keys hotels in Bombay.

Got it, sir. And sir, recently have made a recent partnership. So where do we expect any kind of opening or any timeline, sir?

Yes, that's a long-term tenure of partnership for the [ Hampton by Hilton ] brand in 6 states of India, where we are going to be opening about 125 hotels with them. But obviously, keep in mind, these hotels are going to be signed this year onwards, and therefore, they'll start to open in a phased manner. But so yes, so we'll be happy to give you the announcements when we have the first Hampton site. But we are working on it, and we do anticipate some signings in the current year as well.

Sir, if you can give some ballpark on how many keys or how much hotels are we looking to this year?

See, honestly, because we've just signed the contracts, we are in the process of rolling this out. We will definitely come back to the investors with a more concrete business plan as we roll out our first property with them because we'd also want to understand and understand the entire life cycle of signing a property, opening a property with them before we kind of know exactly how they're going to ramp up. Also, we're getting market feedback, et cetera. So it will be wrong for me to give you an exact ramp up unless we do a little bit of the homework there, which is onwards it's is happening. And we'll come back to you very shortly with that. But like I said, there will be a couple of signings this year that you can expect. Typically, the average Hampton hotel will be somewhere around 75 keys. So that should give you some sense. But like I said, I cannot forecast much more than that as of now.

We will take a follow-up question from Chirag.

So on managed hotels, you mentioned INR 55 crores top line for this year and INR 20 crores EBITDA, correct?

Yes.

So this is flattish if I compare the last year numbers. I think last year, we made INR 55-odd crores to the income and the EBITDA would be INR 21 crores. So what is the guidance for FY '27 for managed hotels since we are adding about keys every year?

See, as of now, it looks good only. But as Mr. Baljee also rightly said and seeing the scenario, the way things are going, okay, it is very difficult right now to make a comment. And I told you earlier that fully after the first quarter, I'll be in a better position to mainly comment on how the business moves and all.

Right. Sir, and any particular reason why the numbers were flat? So we added 500, 600-odd in FY '26. And our ARRs are slightly up. Occupancy is similar to what it was last year. So if you could provide the breakup of the 500, 600 keys, like how many keys opened in first half of the year, how many keys opened in the second half of the year?

No, I'll tell you...

It's difficult at this stage, right? A lot of those projects are coming up. And like I know one project is coming up in [indiscernible] because nonavailability of the [indiscernible] model. It's difficult to say that. Some people run into financial problems because that's not our call. We help them out, of course, in our connection with the bank. We help people to raise money from NBFCs and other institutions. But I think at this stage, to give a really financial rate is difficult because of the uncertainty of [indiscernible]. And some hotels are opening much faster than what we anticipated. Hotel is going to open next week, so as opposed [indiscernible]. But one more hotel is going to open very soon, and hotel already in the news because of the number of [indiscernible]. I think sometimes hotels open -- like Hyderabad hotel is going to open very shortly. So these are some of the things that -- yes, I think hotels is going to open in the next 2, 3 months. So sometimes it goes slow and sometimes it's really accelerated.

This is a good [indiscernible] as in terms of openings, substantially more than last year. So I think when you look at it from that perspective, definitely, the numbers will start to get better once the openings come in as well. We also anticipate towards the end of the year some upstream coming from also the signings of the Hampton, et cetera. So I think we are positive. We think that we are very well positioned for this business. There is some, I would say, restructuring of the portfolio also that we are planning, where we will like to have minimum key thresholds for hotels, minimum key accounts, those kinds of things as well. So we're doing all that, I think, hopefully, we will see much better performance from this division going forward. We're very positive on this division as well.

Is it possible to just quantify for FY '27 based on whatever hotels you have opened in FY '26? Because in '26, if I compare it with '25, the numbers are flat. So I understand that how many hotels you're going to sign in '27. And I mean, on that front, it's difficult to give some estimate. But whatever hotels have opened in '26, right, because there is no contribution on the top line or bottom line for '26. So what is the bare minimum growth that one should expect in this segment for FY '27?

See, as we said earlier, unfortunately, due to the war situation right now, we are just refraining on giving any guidance in terms of numbers for each division of the company as a whole in this call. Unfortunately, that's something we are unable to do because keep in mind that the situation is quite fluid. And so we are getting impacted in various different ways, which we are not aware about right now. That being said, we believe it will be a better year than last year. We believe that we are working hard towards it. We are adding more hotels, the largest [indiscernible] we are adding more hotels this year than last year. That's all that we can say right now. But the market impact, given what's happening in the war and it's not yet ended, et cetera, so we don't exactly know what -- we can't give you very concrete number. We don't give you something then we would have walked back next quarter.

This new labor code and the fuel prices have added to the -- the labor code expenses are very, very high. And in fact, today, there is a huge article in the Bangalore papers that they are planning to increase the minimum wages. And if they do that, it's going to be a disaster for the entire industry, So I don't know what the other states are thinking. But we all need to look at the situation, where how do you manage the cost because you can't keep on passing on the cost increase to the customer because there's a lot of options the customer today has. So I think we are in very, very turbulent times. But then I always tell my team that if you could sail through COVID, then we can sail through any sort of crises. So we are working doing that so that we can deliver value to our partners, stakeholders, partners, we could deliver that.

We'll take another follow-up question from Rahul.

Just a question on the Hampton bit. We have signed that. Just a question on whether it becomes a part of the overall map of 20,000-plus rooms, is this or above that. And if you can tell us the technical structure, is it the partner subsidiary, is this JV?

So basically, our management contract business, Regenta Hotels, has signed a strategic licensing agreement, right? So it's rightly a franchise agreement for 6 places in the country, where basically we will be able to go to hotel owners, just like we're going today, to hotel owner, we are offering the Regenta brands or ICONIQA offer or any of our brands. Also we can offer that brand through these owners as an option today. So it's an initial option that is there. However, in terms of number of keys, for the 20,000 number, the 345 keys is part of our growth plan. And we think that Hampton and Z by Regenta, which is our focused service plan, will sort of work complementary in certain markets. And that's what -- any other answer on that?

No, just a point of you like, let's say, handle 125 hotels. You're talking about hypothetical 75. That becomes about 8,000, 9,000 kind of situation. So I'm just asking whether that 8,000, 9,000 is part of this 22,000 road map or it's over and above that. That's the only question.

It's part of the road map. The 125 hotels is signings in the period of 10 years. That's what we are -- yes. So that's what we are looking at. Of course, the number of hotels to open will be probably half of that over a period of 10 years. So just to give you some sense of how things will ramp up. But yes, eventually, the idea is to have 125 operational Hampton by Hilton hotels. But that's over 10 years. This Vision 2030 is obviously a shorter horizon.

Since there are no further questions, I would request management of closing comment.

Well, it was nice to hear all of you, and you raised questions which are very thought-provoking and it will motivate our team to see that how do you produce better reserves in spite of our setbacks. Because every year, there will be some new [indiscernible], and we have to better on that. So I think we are poised to grow very rapidly. That is assurance that I can give you guys. And with all your support which has been there, thank you very much, and hope to see you very soon the next con call.

Thank you. This brings us to the end of earnings call. Thank you to all the participants, and thank you for management for giving their valuable time. We may all disconnect.