The Indian Hotels Company Limited (500850) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Thank you all for joining us today for the Fifth Annual Capital Market Day of IHCL. We would like to extend a warm welcome to everyone present in this room and those joining us virtually from across the globe. Before we start the event, as a matter of good practice, we would like to show you the security brief right now. Avi, please? [Presentation]

We will now commence with a presentation by our Managing Director and CEO, IHCL; Mr. Puneet Chhatwal I'm Mr. Giridhar Sanjeevi, our Executive Vice President and CFO, IHCL. I would like to take this opportunity to invite Mr. Chhatwal up on the stage, please.

Good afternoon, everyone. Wonderful to see so many people. This is our fifth Capital Market Day. I remember a few years ago, we hardly had 15 or 20 people sitting in here. So the numbers keep increasing, just like our occupancies are increasing in our business and the seats in the aircrafts are getting more and more occupied. Let me start the day with our presentation, which -- sorry, this jumped -- is titled as aspiration when coupled with execution creates super-lated performance. And that's the journey we embarked upon the journey of aspiration, which we called Aspiration 2022, which we officially announced in the month of February 2018. We did quite well for six consecutive quarters and then COVID hit us. And aspiration had to be stopped and reset was launched, which was called Reset 2020. And as a reminder, that reset stood for revenue growth, excellence in operations because those days, we were very occupied with just sanitizing and following the COVID protocol. The SAT that follows is something we are very proud of because that started our journey of finding the right cost base for the company. The S was for spend optimization, the E was for effective asset management; and T was for being thrift and financially prudent. Sometimes, when you go through a crisis, it doesn't feel good. You're demoralized, your revenues are zero. But in hindsight, I think that enabled us to accelerate the speed of change that we badly needed towards our goals. And that's how a company which was traditionally at 15%, 16% EBITDA margin was able to give a guidance under AHVAAN 2025 of 33% more than doubling of that margin. And when we started Aspiration 2022, a lot of people thought getting to '25 was a very stretched target. Some even said you will never get there. So I think that's the setting of the context on how we did, what we did. The good news is we started in '18. So when COVID hit us, we were already in that journey. And had we started then, it would have been very, very difficult. We did promise profitability. But we did not promise a record performance, and we delivered record performance. And these figures say it all. Our enterprise level revenue, that means it includes revenue from all management contracts. As you all know, we reported INR 5,950 odd crores as consolidated, but enterprise level revenue reached INR 11,000 crores, which was a 1.5x increase. Later in the presentation, you will see where all it was coming from. We crossed INR 1,000 crores in our profit after tax. We had more than INR 1,000 crores free cash flow. The company, which was always kind of pushed with the pressure of debt for several decades, was able to talk about free cash flows and consistently, including in the month that has gone by. And our market cap increased INR 50,000 crores. So almost 5 years ago, '17, '18, it was at around INR 13,000 crores. So it's almost a 4x increase from where we were at that point of time. Each quarter was a record quarter. Quarter 1 was the best quarter ever, best quarter 1 in the history. Quarter 2 was the best quarter 2 and that Saga continued, and we hope that this will continue also this year. At least there is nothing that makes us believe that the Q1 will be different than the Q1 of last year. Obviously, Q3 being an absolute record in terms of EBITDA, in terms of PAT. And we did announce that our Q3 PAT itself was higher than the best full year financial result in the history of the company. Moving on to the next slide, which says our RevPAR growth premium. We were always commanding a premium because of the strength of the Taj brand, which is really the backbone of the company. This used to be around 40%. It moved to more than 70% versus what the industry is doing. And this really has happened, as I said, I'll keep talking about some of the initiatives that we have done by premiumizing our portfolio. That means a lot of hotels, which were not renovated, were renovated, were repositioned, we rebranded. Our brand itself were reimagined. That's the Ginger, the Vivanta, a new one was introduced like selections. Even if we introduce new businesses like Ama or Qmin in their own market segment, in order to stay relevant, they had to be perceived as the most premium offering to the competitors that were there. Obviously, we had the strong brand equity of Taj that really, really helped us. You'll see that in the later slides. Our market share kept increasing. All our companies were doing exceptionally well orders, they call it firing on all cylinders and our smart renovations. So some of the iconic assets have a lot of space, and we have never thought of sweating the assets in the way we have done that in the last few years. So it keeps coming back to spend optimization, effective asset management and by being thrift and financially prudent. From the debt which we spoke about at the peak of COVID, more than INR 3,000 crores getting to almost INR 1,000 crores net cash positive and obviously also in the free cash flow. So we have one debenture that needs to be paid off in June for which the QIP monies were allocated that will happen before the end of June. And after that, we will stay net cash positive. We have no plans to take on any further debt. One thing which we promised was unleashing the potential of our entire brand Scape. So we reimagined the brand Scape, and started delivering performance across all brands. I don't know how many of you remember. So we have the hotels, we have the restaurants, we have the SPA, we have the salons. And a lot of this got reimagined and renewed and a lot of changes were made to all the brands, except for the Taj. The reason being Taj was the most iconic but was getting disturbed by putting under Vivanta Bai Taj, the TGH, The Gateway Hotel also very cleverly through some owners became Taj gateway hotels or Taj [indiscernible] or Taj salon. All this was not working, and we consciously embarked on the journey of house of brands versus one branded house. Ladies and gentlemen, it was a very tough decision because people really wanted everything to stay Taj, but everything would stay Taj, then nothing would change. And change does not happen that easy or by itself. So in order to deliver on that promise in order to bring that change in order to become what we had set out to become being the most iconic and most profitable hotel company from South Asia, the time to change had been long overdue. And thankfully, it happened before COVID hit us. And we continue to invest in our brands. It's not that we just changed the names, every change in name needed further investment, needed a different value proposition. And the results were obvious. Taj itself went from INR 4,600 crores to INR 8,000 crores revenue and Taj's contribution to revenue increased to almost 72%. Now there is a little story behind it. And that you see on the right of the slide because 41 Taj Hotels, plus 9 in pipeline, which was 50 became 81 plus 19 in pipeline, which means 100, doubled the size of hotels in operation plus more than doubled the size of hotels in pipeline. A lot of the hotels were new, but almost 25 got upgraded, which for whatever reasons in the past right or wrong had been downgraded and were not Taj anymore. So you'll see in another chart, which will come later how the migration happens. So the Taj brand was put back on some iconic assets like [indiscernible] like Fisherman's co, like Taj Mahal Lucknow, like Holiday Village. And it was done just in time because when COVID came and we had phased openings, most of these properties, most of these assets were helping us in the revival and in the survival phase of the sector. And today, with the renovation with the business being back, they are helping us after the survival and revival in the thrival part of the business. So we are thriving at the back of Taj, but a lot of that revenue has been displaced from other brands came here and was able to charge premium which made Taj much stronger. But the story did not stop all other brands continue to grow also. So within selections, which is very recently launched, in 4 years of its launch, 2 years, we have had almost a lockdown. In 2 years, the brand has grown to 31 properties and Vivanta despite all the migrations to touch, it's also at a portfolio of 47 and total operational hotels being 48 in these two brands. Enterprise revenue contribution of these brands is at a minimal, it's at 16% of the total revenue, but it's quite a solid number given that the brands have been cleaned up and have done well. I come to one of our favorites would become everyone's favorite is the story of Ginger, which is just beginning. So the story of Ginger is beginning because the name is old, but everything else that you see in Ginger is totally reimagined and more than 50% of the portfolio is Lean Luxe. Ginger did a revenue of INR 300 crores and EBITDA of INR 120 crores. And I think something which we are really looking forward to is unfortunately delayed because of COVID, because of construction stop, our flagship Ginger opening inside the cruise on 1st of October of this year, not next year, it's 1st of October this year. And this brand has also grown in a number of hotels in operation despite the fact that we let go of many contracts, which we did not renew because they were damaging the brand. So the real [indiscernible] kind of proposition is not the new Ginger positioning. So we had to let them do and some others also which were really hurting. So this number that you see and also in the coming slides you'll see is about the net growth of the portfolio, something which nobody really talked about so much till 5, 10 years ago is the flight kitchen business. We have 50% with our joint venture partner, SATS they are 49%. Today, Taj sets at 58% market share. The revenue hit almost INR 650 crores at a 20% margin. 20% margin in flight kitchen business is a very good margin. Typically, the margins in this sector would be between 6% to 15% depending where one would be. And we expect to grow this business exponentially also leveraging the group synergies, which will come through the airline sector in the future with the addition of the routings and the fleet craft, as you have all read in the newspapers and hopefully, we will be the chosen or the preferred catering partner for hospitalities in the sky. And average number of meals served per day from Taj sets is 100,000. I mean that's a very big number. Not only that, we also, at the same time, started unleashing the potential of our strong existing F&B brands as well as added some new brands. So if you look at the top, you have house of Ming, the classic Golden Dragon is also a classic Chinese and in Mumbai. And we have Ming Yang in this hotel from here we're making this presentation. We have Bombarasari and we had, let's say, Shamiana. There are many more. But today, you'll find Shamiana also in Dubai. You also find the Machan in Bhopal or in the Taj West end. You'll also find House of Ming in Bhopal or in London. There is a soft launch of House of Ming that has happened in our property in London, the official launch later this month in the last week. So that is taking our iconic F&B brands also to other destinations. What was Bombay Brasserie as one stand-alone in London opened up in Taj in Dubai, then in Taj in [indiscernible] now we are converting the restaurant in Canton Place, which is San Francisco as a Bombay Brasserie plus we are adding, hopefully, in other destinations, Bombay Brasserie also as a stand-alone concept. So hopefully, very soon, we'll be able to share that news also internationally. House of Nomad opened its second outlet in Goa. 7 Rivers opened a second outlet and Goa all next to the holiday village. We also launched Loya, which is our new F&B concept and got the rights for not just 7 Rivers but also of PaperMoon, which is an Italian concept, which we also launched at Fort Aguada in Goa. Not just that, we also were very blessed to have a wonderful spa platform and a brand called Jiva. Now Jiva had its limitations. So it has kind of transition into J, the wellness circle, which keeps the elements of the look and feel of Jiva. It has all those services, but this is a brand which we own now 100% and there is no dispute. There was some dispute on Jiva, which was not making it easy for us to merchandise the way we would have liked to merchandise the Jiva brand. And the Jiva brand under the J as the newly reimagined and repositioned Spa brand, will talk more holistically about the wellness circle that is created and is a key learning coming from the pandemic for all of us. Other new businesses, albeit small. These are businesses for future. We created them only through incremental cost and implemental revenue model. Now we have started pushing these. That's our home stay with Ama and Qmin, which is also growing very, very aggressively, both as a Qmin shop store, Qmin QSR and Qmin as a home delivery business. Some of you might be surprised to know Qmin as QSR is already in 34 outlets, half of them, 17 of them are in Ginger as the all-day dining concept, which has been specially made to fit in Ginger. So every Ginger hotel over a period of next 2 years will also have Qmin. We also very nicely internally call it the Qminization of Ginger. Ginger sets and Roots Corporation the names which were not taught of scientifically but just happened as an evolution, Ginger and Qmin rightfully belong together under the umbrella of [routes]. And this is a slide I was talking about '17, '18. If you look Taj, the enterprise revenue was INR 4,000 crores, which doubled not only the number of hotels doubled, but the revenue also doubled. And despite all the migrations, Vivanta and SeleQtions still stayed at the same level as what they were contributing. So if you take out high-performing, high revenue hotels like holiday village, like [indiscernible], like Fort Aguada, like Taj Mahal Lucknow and then still maintain the level of revenue that you had before, it's a level that we are satisfied with. Of course, it can always be more. And Ginger was INR 200 crores went to INR 360 crores. Taj Sats was INR 420 crores went to INR 640 crores. What used to be a INR 7,000 crore enterprise level revenue became INR 11,000 crores. So I think there is a lot of strategic decision making, a lot of science and a lot of art that went into the last 5 years despite the lockdown to bring around this change. Some of you, our analysts, some of you are very good at modeling and everything is obviously related to the RevPAR, but only focusing on the RevPAR and projecting that in your modeling for future is in our system with the way we are growing as a fast-growing company would be kind of an antique model, I would say. So I would only encourage you when you have questions, please come, you asked because a lot of the data that you are looking at may not be that relevant because you have to break it into like-for-like and not like-for-like. When you have high growth, you're opening the hotels we are opening on the day 1, they're not at a stabilized phase. So your RevPAR premium might look like it's -- as if it's going down because last year, we opened 16 hotels. This year, we'll definitely open more than 20. That will have some impact. And every hotel will not open with 70% occupancy and a rate of 7,000, 8,000 plus that is needed for the portfolio. So I think that is something which one needs to carefully consider. And also in terms of our new businesses and the kind of source of income, which Giri will show you later in his more detailed financial slides that a lot of our income will be coming through our management contract model. Those numbers may not be that large, but their conversion to bottom line is very high. And that creates the percentage impact. So today, in the hospitality ecosystem, the house of brands that we have built, the kind of business model that we have built, we are benefiting from the operating leverage from the owned portfolio, coupled with the asset-light growth, which is driving the margins. This was a strategy which was very clearly thoughtful and the speed and the acceleration of change of the set from the reset of spend optimization, effective asset management and being thrift and financially prudent in getting rid of the debt is what is driving premium performance for our portfolio. Of course, we had promised expansion. I remember in May, at a hospitality forum, I had already mentioned when some consultants were saying all foreign brands are the fastest growing, and this one is there and that. I said it's all right. It's everything that has been presented is true. But as of today, it will be false. So this is what happened. And we did not embark on a journey of just adding rooms and hotels. That's not our strategy. We communicated way back in '18, Smart, which every industry, every sector has a principle of Smart. We are stuck by that. We are still doing development, which is -- has to be strategic, has to be margin enhancing. It is driven with the same principle of asset management, which you heard on the set. It is driven by relationship building so that the same owner is giving you more and more contracts and doing more business with you and continuous tracking. You said you will do X, what you actually did, how you measure that and keeping close engagement with our owners because that is the fundamental of asset-light growth. Otherwise, that was for a toss. So I think this is the principle which we have done. And if needed, we will never be 100% asset-light. Because with Ginger itself, we have changed the concept and we said we'll go more for operating leases. So operating leases is technically asset heavy. But why would you want to do business at 7% or 8% of our top line, which is very small, then to -- and Ginger can do 50% to 60% EBITDA margin. You might as well go for the revenue share where you give 25%, 30%, 32% to an owner and keep the rest 20% or 25% with you instead of being with the 7% that would not move the needle neither on the revenue because you're only accounting for the management fee income, not for your profitability. So that's why we changed that model. But if there are strategic investments like we have done in the past, in the history of the company in building a destination, then in the spirit of nation building, in the spirit of the good business propositions like we did for Goa 50 years ago, like we have done for Andaman, maybe embarked on the journey 10 years ago. We'll continue to do that, and that is also what differentiates us from the rest of the pack. That is our competitive advantage. And from time to time, we will invest in our competitive advantage. That's where we are today, 263 hotels. If we account for hotels in the pipeline and the rooms in the pipeline, we are already at a 50-50 balanced portfolio, but this is not for what is an operation. For that number, we'll have to wait for a couple of years. And if, again, we separate from that, companies in which we have a promoter holding, whether majority or minority, then we have to wait another few years to get to the real 50-50 because then we don't have an ownership stake in that company. Very well positioned with almost 100 hotels in a brand like Taj, which is very, very unique. There are very few luxury hotel brands. I think to the best of my knowledge, together with us, it's only three brands that are 100 plus in this segment. And something very difficult to achieve with the kind of iconic portfolio we have and the kind of presence from the two top lodging markets of the world, New York, London, to the Palaces and the Safari portfolio. We are also getting very close to 100 with Ginger. We are 59 in operation, but the total portfolio of 85 and together with selections and Vivanta, 78. What does this mean? What we've always said I'm going to reemphasize it today. This means we are now ready to add another brand in the hotel portfolio. Once you have built critical mass in two of your four key hotel brands, then you can afford and start thinking of adding one more, not just because you've got the numbers, but because the space to grow starts getting limited. There is only so many Taj hotels that we can have in Jaipur, in Delhi, in Mumbai. We can have maybe 20 Ginger hotels in Mumbai or even 50, but we cannot have 20 or 50 in Mumbai. So there is slowly space is becoming relevant and also free to add another brand. And over the next 6 months, 9 months, depending on how the market continues to evolve, on the kind of opportunities that we keep getting, if there is an ideal fit, we have certain preferences on where we want to go, what kind of brand we want to launch, but we'll also see what is it that we can afford and what will best serve the needs of our balance sheet as well as our P&L. Our growth journey below is on the gross, where it shows 50 to 100 for Taj and the Ginger at 85, but you see the net growth of both the hotels in operation as well as in pipeline. Interesting is look at more than 3.5x or 3.7x increase in the pipeline in the last 5 years. And net growth in hotels because some assets, as I said, you don't want to be in, you want to get out of those. Some get -- they come to the end of their term, and maybe it makes sense when you sign them, it doesn't make sense to renew them. So from a net growth perspective going from 145 to 188 hotels or 43 hotels net growth, a gross growth of 53%. So 10 were taken out is a number that we were satisfied with because the 2 years of COVID, not much hotels could have been opened the way they were. So now since the last financial year when we opened 16 and we think going forward, it will be 18 to 22 hotels as of this financial year that will open consistently across our brands. And number of signings. As I said, '18, '19 -- '19, '20, we were doing fine, then comes COVID, you go down. And then last year, absolute, absolute exception. Even we don't feel -- and we don't believe that 36 contracts is that easy to sign as a -- it is just unthinkable. Actually, it is unthinkable that it took us almost 115 years to get to the first 130 hotels as a portfolio and only 5 years to get to the next 130. So it says we've signed more than 120 agreements, ladies and gentlemen in the last 5 years and consistently related. I see also HPS has joined us here as the company with the highest number of signings. We would have also been rated with the highest number of openings, but there is a technical issue in there, where some renewals are considered as also openings. So it depends. But normally, a number of hotels signed, a number of hotels open at the moment, no one can match up on that with us. And some of this is also following into new destinations, very important, building new destinations, building new spots like we are going to Ekta nagar, also properly called -- where the statue of unity is, in the city of Kevadiya. It is also partnering with the government on certain bits, that's also how kevadiya happened. That's also how Lakshadweep has happened and also deeper penetration into key markets, which I just alluded to, that we have certain markets which we own. There are certain which we don't own from a supply perspective, but we would have liked to own. So I think it's always going into market, the depth of the market as well as the width. The width comes to brands like Ginger and Vivanta and the depth will come through both the iconic brands as well as the other brands of our portfolio. And a very clear focus currently we have is on the Northeast. We have already announced that in 2025, we hope to have 25 hotels in the Northeast, either in operation or under development. And half of that number we have achieved. It's a very high-growth market. We have seen the success of Vivanta and Guwahati. We are also seeing a very successful start of Vivanta in Shillong. Very soon, we will be opening Vivanta in Tawang in Arunachal. And this year, the Taj [indiscernible] in Gangtok will be coming, we already have a Vivanta in [indiscernible]. So all this will keep going on. And not to forget that Ginger had one of its first hotel in Agartala. And there is two more Gingers going to take place in Guwahati. So from our strategic point of view, maybe there is space for one or two Taj properties in the short term in the Northeast, but every state capital in the Northeast should have a Vivanta and a ginger and every other commercially relevant city in those states must have, at a minimum, Ginger branded property. New openings, as I said, from 5 accelerated to 12 fell back to 7, accelerated it back to 16. Some of the very nice new openings include 2 hotels in Jaipur, both Taj branded. One is Mahal within the premises of the [indiscernible] Palace called the [indiscernible], another one, a very good [mice] and wedding destination and that is the Taj Amir. And also, there is Taj in new city center in Kolkata, as well as another resort in Kerala. I'll give you a snapshot of how some of these openings look, as you see on this slide show with Vivanta in Shillong, also the Vivanta in Kathua, in Vaishno Devi and many, many, many more to come, one nicer than the other, one more strategic than the one which was already present so that we get a higher market share, a deeper penetration and remain customer-centric as well as profitable. By doing all this, we have never been shy. If you want to be iconic, you have to invest in your assets. Our CapEx, we have been spending is at a pretty high level, and that is also needed because if we don't do that, we don't get the RevPAR premium. If you want to get that extra premium, then what the market is paying. You have to continuously invest in your assets. In this very hotel where you are sitting, there will be a new auditorium opening. There is a new chambers that is gone under renovation. So the reimagine Chambers will be coming back as our private membership club in 3 to 4 months from now. There are 60 rooms under the innovation in this property just now started. And that is the need of the hour. And I think, again, we have to find the right balance, the right amount of displacement, the right amount of revenue generation, the right time to renovate. We don't do renovations in November. February, March. These are very high-performing months. So the time to do it is always Q1 and Q2, which are traditionally the third and the fourth weakest quarters, not Q3, which is the strongest quarter even for all the key metros that we have in India. This gives also the impact of not only renovating but smart renovations that we spoke about on one of the earlier slides. It gives you an idea of how we have reimagined the Taj Club. Those of you who have time, I would encourage you to go here in [Lands End] that's one place where we have redone the Taj Club. We've done it in Coromandel. We have done it in Taj Mansingh in Delhi. We keep doing a lot of this new club proposition the Taj resort and convention center in Goa, or the Taj exotica in Dubai, they all have a club proposition, which is fantastic. And the last picture on which the slide stopped is going to be the new Spa, which will open also within a month in this hotel. So we'll have a new spa, a second pool on top of that spa. We already did the new one now. We will have the auditorium at the back of the reception. And ladies and gentlemen, actually, if you have time, I would also invite you those present here to go and see the Lands End CAFE, which was done for the staff. So that the staff meals are in as beautiful an environment as for the guests who are going to dine in some of our iconic restaurants in this hotel. We are very well poised to reach our AHVAAN 2025 targets. I don't know how many of you noticed when we started Aspiration 2022. It was a 5-year plan. But this time, we did it on purpose 3 years because we were missing the 2 years of COVID on the journey that we had embarked upon. And so we added just 1 year and said, "this is what we'll do. We'll have 300-plus hotels and spread well across different brands. Hopefully, Ginger will be at 125. Taj already achieved 100, have a balanced portfolio of 50-50 and continue to grow other new brands. The one where we might be shy of reaching the target is Ama, where we had said we would want to have 500 home stays. And given the success or given the image of Ama, we have taken a step back and want to take it even further premium. And instead of the scale, the advice and the customer feedback that we got from the who's who, who have used our properties wants to be more premium and more selective and maintain that level and that standard instead of just planting different villas and get into that service concept. Also, we think that although we have given a guidance of 300 plus, the potential based on if there was some M&A activity that came out of some kind of a consolidation in the industry, that target could even be increased to 325 plus and Taj doing 10% more. And so would Vivanta and SeleQtions, especially SeleQtions being the conversion brand. Now one thing we said is profitability. But the second is iconic hospitality. And the iconic hospitality cannot happen without customer centricity. So we are very pleased to share, we took permission from trust you as a portal that does this kind of data. On the Net Promoter Score, we are ranking the highest. We're not only the world's strongest hotel brand. We are ranking the highest on NPS. And also, the metric that they use to calculate the ratings on TripAdvisor, Booking and Google, we are ahead of the pack. So I think that's very important. It's not just profitability, it's also customer centricity. It's iconic hospitality is our operational excellence that we deliver with our heart and soul. Further good news for us. It's very interesting. We tried 20 years with our own loyalty program, which we still have. It's not that we don't have, but thanks to Tata new, the super app created, which is really helping us. It's only 1 year and 1 month in operation. It will take another 2 years to get to its right potential in terms of delivering business, but our loyalty-led revenue has almost doubled. So INR 2,200 crores of our INR 11,000 crore enterprise level revenue came through any source of loyalty that we have. That's how we measure it. And that is doubling of that revenue, including doubling of the members. And I think if we were trying that on our own for the next decade, it would have been quite a task to get there. So with the success and with the more and more companies joining the Tata New platform, most recently Titan, Chroma is already there. We were the founding members. We are the first one to join. And we are very happy, very pleased to have this source and it really helps us in weak periods of business because we can very quickly come up on a promotion on Tata New and really market our hotels and get a higher share, especially now that we have onboarded Ginger. Ginger with big basket, Ginger with 1MG on that platform stands to benefit a lot going forward in getting this source of business. At the same time, we also remain the custodians of Indian hospitality. That's a claim the group has had, that the claim Taj has had for several decades. I think we are the main partner for G20, more events of G20 are happening with us than with anyone else. Of course, because also of the assets we have. So G20 kickoff meeting of the G20 shaper was in Andaman and [indiscernible], which was with us. The second one was on the Paris of Lake Palace. It's the right place to do it was with us. The third one was at the chamber's [terrace] at the Taj Mahal palace in Tower in Colaba. So I think we are very blessed to have such a wonderful platform and such a wonderful portfolio of assets and with -- coupled with that service, it helps us not only to host dignitaries, not only to host government delegations, not only to be good partners of G20, but also something that we very especially do is promote the warmth of Indian hospitality. The warmth of Indian hospitality, if one wants to see if you go check in into different hotels in London and then you come and stay at the Taj in London and you will see what a difference it makes. Also integrated marketing campaigns, I think we have done more campaigns in the last 3, 4 years than we did in maybe last 20 years, with the one which was most successful being She remains the Taj, the second most successful being Dekho Apna Desh, also many other camps. During COVID, our 4D campaign, which was a dream, drive, discover and delight. So you dream that I want to go out and shut in a lockdown, there is a window to leave, then you dream of that, then you get into your car, you drive, you discover a new destination and delight yourself those -- a very strong campaign, which helped us in the survival phase in the COVID period. Also, our -- one of our key enablers is our culture and our ESG. As a Tata Group company, our founder, Jameshed Ji Tata, who also built the Taj in Colaba. Said that community is not just another stakeholder rather the purpose of the existence of any business. So when people did not even know what purpose meant, this purpose got defined by the founder of Tata Group. And we continuously work on those principles today. Maybe it's called ESG, but this has been a part of the DNA of all group companies and especially us as the oldest operating company of the group. On the culture part, we defined this also around '17, '18, our core values being trust, awareness and joy. We said these 3 letters in the name that stand for trust, awareness and joy. Trust of all our stakeholders, awareness of our communities and what is happening around us, enjoy in doing everything that we do. And we kept this as the core value across all brands and across all businesses. Culture of camaraderie, we also are known for providing Tajness, which is a part of our DNA. We created 24th of March, which was the date of lockdown as the day of Tajness. And it was celebrated in all of our hotels in India and abroad as the Tajness day as a special day to celebrate the spirit of resilience, the spirit of responsiveness of our colleagues and the spirit of resurgence. Also, our responsible business just celebrated 1 year the program called Paathya. We were doing responsible business before also, but we introduced the six key differentiating factors of Paathya, the 6Ps of Paathya. And basically, they are built around 100% getting rid of single-use plastic, 100% recycling of wastewater, 50% of our energy coming from renewable sources, 100% of waste management, going green on green meetings and also using EV charging stations as well as -- as well as doing all the things in the community with the right level of governance, and that's why we have been consistently awarded with both corporate governance awards as well as risk management awards. Very interesting for me to share with you is that our temple of hospitality, as I call it, the Taj Mahal Palace and Tower is now 100% green, 68% through renewable energy that we got with the help of Tata Power. 32%, we could not because how this whole distribution works. So for that, we bought certificates through Tata Power to claim that we are 100% green. I think this would be the right time. Instead of me keep talking about Paathya show you what all happened in 365 days in a program that was launched in March '22, how that has evolved within 1 year's time. [Presentation]

With that, I would like to call my colleague, Giri, for delivering responsible, profitable growth. Then I'll come back after his session. Thank you.

Good afternoon. Always nice to see a lot of you here. Thank you for coming and for all the people who are watching us online. So I think moving on in terms of what all of this means in terms of the strategy and the execution in terms of the result, which is really driving responsible, profitable growth. Just to recap, and I think it's important to sort of say the recap because I think when we announced the Aspiration 2022. It was about building belief, actually. As Puneet said, when we said -- when we were at 16% EBITDA, when we said we'll go to 25%. A lot of the people said, how will you do it actually. And now when we say last year that we will go to 33% and people say, but have you not already done it actually. I think some interesting numbers. We were INR 665 crores of EBITDA in '16, '17. And when we hit the pandemic year '19,'20, we had nearly doubled it to INR 1,100 crores actually for a change in top line, which was just about 15 -- less than 15% actually. And now when we look at '19, '20 to go to '22, '23, that's almost a doubling of EBITDA for a change in top line, which is 1/3 actually. So I think that momentum has been lovely to see in terms of how the strategy and the execution has kind of come together. And as we talked about the various assets -- and we'll go through some of the details in terms of how this is building on as we go forward, actually. Really, there are three things, and we always talk about it in all our meetings. Really, you talk about the revenue, which is the revenue side of the P&L. The second is the expenditure side of the P&L leading on to margins. And the third is the balance sheet. It's a fairly straightforward story. And to a great extent, we believe that our story mirrors what's happening in India. Like for instance, I think the GDP growth continues to be strong, which reflects in the strong consumption story. I think what is happening today is not just the youngsters, the demographic dividend in terms of spending, it's also the baby boomers that people who are born in the early 60s as the terminology is used in the U.S. They've also become [indiscernible] their spending actually. In fact, there are studies in the U.S. which say that in about 15 years' time, where eventually the young -- the present generation inherit from the baby boomers, that will be one of the largest wealth transfers, which will happen in the U.S. And the same story is going to repeat in India as well. So therefore, I do believe that there is a secular consumption story, which is playing out actually, not just in the key metros of India, but also in the interiors as the government pushes through infrastructure growth and roads and smart cities and all of that. And what we have seen post the pandemic is the challenge in terms of demand/supply. Industry estimates, of course, say that the demand is growing at maybe 7% plus, supply is growing at 5%, 5.5% actually. And this is not likely to change in the short term, actually, in the next 3, 4 years. And this also is a bit of a misnomer because when you talk about a 5.5% supply growth, where the space in South Bombay for another hotel as an example? It may come near the airport in Navi Mumbai, but not in South Bombay. So if you look at where the micro markets, supply potential is there. If you look at that, I think the position is even more stacker. That is to say that the consumption will continue to sort of surprise that demand is not matching up to it actually. And a lot of the growth also when you talk of the supply is also coming beyond the metros actually. That is where I think, as Puneet was talking about the RevPAR, when you talk about occupancies and say, how much can an occupancy grow by 1%? That's also a misnomer, because you're considering the occupancy in totality. A lot of the occupancy is coming up not in places like Bombay, but the occupancy is actually happening in the other cities where the hotels are growing actually. And hence, the blended occupancy will always be an average, whereas I think -- so therefore, I think those are factors which have to be considered as you look at models, actually. And I think the biggest story for us is the -- as the business development pipeline shows and the asset-light growth shows, is not just the like-for-like story, but it is a not like-for-like story, because that will continue to build momentum. And that has to be understood when you look at us in terms of understanding the financial model actually. And when I talk about asset-led growth, I think one of the things I do want to emphasize, it is not just asset-light in terms of investments, it is also about growth, which is now cycle-independent actually. And what do I mean by that? We know that the hospitality industry is a cyclical industry. But some of the actions that we are taking here are actually stretching the cycle. Like Puneet spoke about the auditorium, which is going to come up in Taj Lands End behind the reception actually, which will become hopefully the place where OTT premier screenings will happen actually. And that has nothing to do with the hospitality cycle, which means the OTT screenings in the auditorium will feed into F&B, will feed into our auditorium business, will feel into room revenue, and that has nothing to do with this. We spoke about the new SPA, newly renovated SPA, and the launch is [indiscernible] program on top. That has nothing to do once again with the cycle. In Taj Mansingh, for instance, we have a long stay floor. You saw in the pandemic that Wellington Mews had an 85%, 90% occupancy even during the pandemic. So when you add a long-stay floor in a diplomatic area in Taj Mansingh, I think that will be resilient independent of the cycle, actually. So a lot of actions that we are taking, chambers and all of those are actually becoming stories, which is building resilience in terms of it being independent in terms of the cyclicality of hospitality industry, and that builds the resilience actually. As far as margins are concerned, and I will talk you through some slides in terms of sweating existing assets. And I think once again, we spoke -- I think Puneet spoke about it, and we will see some numbers here in terms of how we continuously improve, like we are not satisfied with the profitability in an existing property. And as we set up the auditorium here. And as we renovate this SPAs and as we kind of do all of those things, we continue to drive profitability and RevPAR growth actually. And that is a great way in terms of adding to the profitability. And you saw that in the last year's numbers, there was a chart that we had put which said that our margins from the pre-pandemic period to March '23, actually grew by 9% from 24% to about 33% or so. And of that 9% growth, 6.7% came through the existing property, driving more profitability, which is really the assets sweating. Share of high-margin business is clearly going up, which is all the chambers and management fees, et cetera. Enhanced productivity that is coming through the expenditure side in terms of staff-to-room ratios and all the ratios that we show quarter-on-quarter, 0 interest cost. Of course, we had a INR 300-plus crores interest cost on the balance sheet. And that is gone now, and we intend to stay net debt 0. And therefore, that is a very big kind of freedom we get in terms of the P&L management. On the balance sheet, we will continue to focus on simplification. ROC clearly is a big area of focus. Free cash flow is something which is kind of being driven through, and you saw what happened last year in terms of INR 1,000 crores free cash flow. And we'll continue to have robust cash reserves as a strategic result. Now moving into some of the details. I think what is very important to understand is the diversification of top line. That is at the core of our strategy, actually. The asset-heavy business like this, as an example, is great in times when the business is booming, because that adds to profitability. It's a simple cost volume profit equation, where a certain fixed cost needs a certain volume to breakeven. But once you've hit that, anything incremental in terms of top line just adds to your profitability actually. And therefore, the asset-heavy business in times of an upside really drives the leverage actually, which is what we are experiencing now. But the growth in asset-light businesses will give us the resilience whenever the cycle changes. You see on this chart that the asset-light business grew from 10% to 14%. And bear in mind, 10% and 14% are not on the same base. The 14% in '22, '23 is on a much larger base actually. 1% of the INR 5,000 crores, what do you say, the INR 6,000 crores, what do you say, consolidated revenue is really about INR 60 crores or so. And that is the base in '17, '18 was different. And as this base goes up and this, we believe, will continue to grow, will kind of provide us the resilience on the -- in terms of the P&L. And more importantly, because these come without any significant capital employed, it also adds to ROCE as well actually. So the diversification of top line really becomes the heart of the strategy for us actually. So what are some of the elements of the diversified top line? Number one is really -- sorry, the pipeline, of course. Let me come to the pipeline. The pipeline itself, we spoke about the pipeline in terms of the number of properties we're opening, but what does it translate to on a year-by-year basis in terms of the number of rooms you're opening? And I think that momentum is only going up. We opened 16 hotels last year. And as you go forward, now the pipeline is improving, 2,300 rooms in '23, '24. And you see 2024, '25, 2005, nearly 2,500 rooms, and we see '25, '26 dropping to 2,200. It doesn't mean it drops. You still have time in terms of conversions to bring in. So there is the momentum in terms of new openings coming up and which is great in terms of driving the top line growth, and most of it is asset-light growth. Of course, some asset-heavy are activities like what we are building in [indiscernible], will also [ activate. ] Management fees, and I think all of you have been seeing the growth in management fees. We have seen a very, very good momentum in terms of growth in management fees. And many of you have been asking, saying that you did announce last year that you will hit for INR 400 crores in terms of management fees by '25, '26, and we achieved that number as of 31st March of '23. Where is it likely to be? So we've looked at our pipeline, and we believe that it is fair to sort of give a guidance that this is likely to go to about INR 550-plus crore. So which means if you go back to the '19/'20 levels, the pre-pandemic level of INR 213 crores, we are talking of more than doubling to take it to INR 550 crore numbers actually. So that's the first part of how we see the management fee structure going and how it will add to the incomes and the profitabilities. If you look at the Ginger, and I think Ginger is clearly a very exciting story in terms of how it's growing. We have the potential to reach 100 operating hotels, and we believe that we will achieve it. And you saw the growth, the jump. In March '22, we had a top line of about INR 179 crores and an EBITDA of about INR 46 crores, INR 47 crores or so. And that jumped in March '23 to INR 307 crores with an EBITDA of INR 120 crores, and the margin really jumped to about 39%. And that, we think, will grow to about INR 600 crores plus as we go towards the Ahvaan '25 period actually, giving us more than INR 250 crores in terms of EBITDA. We're very excited about the opening of the flagship hotel in Santa Cruz, and that single hotel will contribute about INR 100 crores in steady state actually as compared to the INR 300 crores which the entire network of Ginger contributed as of 31st March 2023. And that is going to be another significant driver in terms of the growth in top line as well as profitability. And if you go back to compared to the '21, '22, where we had INR 46 crores, INR 48 crores of EBITDA, that going to INR 250-plus crores is clearly a bump up of more than INR 200 crores. As far as Chambers membership is concerned, that momentum continues. I think the -- this is just the membership fees, and we've always guided that it will go to about INR 150 crores. We see no reason to change the guidance. But what it is doing is that the opening of the new Chambers in Delhi, the opening of the Chambers in London and as we go forward at the peer in New York and in West End in Bangalore, I think what it is doing is also it is adding to other businesses, actually, other businesses. And do you see that. So when I talk about INR 150 crores of potential membership business, this does not include, obviously, the revenues which come, because people eat, people stay, people use conference rooms and all of that is paid for. So that potential is very significant on Chambers actually. In terms of sweating assets, I just wanted to show a couple of charts in terms of how sweating of assets really translates itself. So we said that as for the year ended 31st March 23, our margins went up from a pre-pandemic 23%, 24% to about 33%. That's a 9% growth, of which we said 6.7% came through existing assets, which is asset sweating. And you see 3, 4 cities that we want to show, Mumbai. Mumbai was in '17, '18, a revenue of INR 930 crores, same-store. This is all data for same store, and that has gone up to INR 1,254 crores. Look at the jump in EBITDA from INR 316 crores to INR 522 crores in terms of the jump in EBITDA. All this links back to the smart renovation that Puneet spoke about, where we continuously upgrade the properties. And as you do that, the ability to charge RevPAR goes up, and that drives greater profitability. That's the same story repeating in Delhi and CR as well, where the revenue jumped from INR 378 crores to INR 546 crores. EBITDA jumped from INR 64 crores to INR 164 crores. And the interesting thing is that since we're comparing from 2017 to 2022, '23, this is without Mansingh being -- with Mansingh being in the renovation actually, which means we put the -- how these same-store assets have kind of dramatically increased in terms of top line and EBITDA is a very strong story actually. And that I will not underemphasize in terms of the potential of existing assets to kind of sweat out more in terms of profitability. Similarly, look at Goa, Goa has a fantastic story where the top line grew from INR 224 crores to INR 36 million. Smart renovations in holiday village, smart renovations in Fort Aguada and other properties are really helping to ensure that the momentum is there in terms of RevPAR premiums. Look at Bangalore similarly, 44% growth in revenue, 144% growth. This also has another story here. I think people -- in India, I think it shows how much people are traveling, how much people are using the hotels and the ability to pay. And I think one of the things that one of my friends in the audience told me, and I think very valid here and we also recognize that, is that in India, it's a penetrating story in terms of tourism, actually, which means that it is going to grow, linked to the economy and consumption actually. And as that happens, the ability of people to kind of spend more is going up, and that is reflected in the way the performance of properties are getting -- are happening, combined with smart renovation. So it is price, property, what do you say, renovations, the service quality, all of these have become together. You just can't increase price without product quality and service levels also kind of not matching up there actually. And so if you stay in one of our hotels and you look back to what was offered even pre-pandemic period, the service levels have gone up. We have [indiscernible] that is a brand custodian who is now driving through the service level changes to make sure that the product and the service reflects the product and the potential in terms of customer service actually. So this is a very important chart for us in terms of showing that we will continue to sweat the assets and our existing assets will continue to drive profitabilities. Traditional business, I think this question keeps coming up in terms of how RevPAR growth is going to pan out. And we just wanted to address it upfront actually. If you see the pre-pandemic period, the RevPAR growth was varying between 2% to 6% actually, and that was a pattern of growth, actually. We have already seen what has happened in April, for instance, our RevPAR has grown by 11% actually. So what is issue if you compare with last year, the base has settled down. The base that you see in April is at a level which is slightly lower than what ended in March, actually. But the base in April is about 11% higher than what is -- what happened last year. And therefore, the RevPAR growth will continue. And our belief is that there are enough tailwinds, and this is just April, the April to September are the weaker quarters. And as we go towards the next few months as we go towards the second half with the G20, with the World Cup, with the tourist season, with the foreigners coming back to -- foreign travel resuming back to India, I think there are enough tailwinds to ensure that the RevPAR momentum will continue. And I don't see why that the RevPAR growth this year cannot be more than the historical averages actually. And this, of course, comes to many of your models in terms of how you model. But as we also said, I think this is only one part of our business. If you look at our diversified top line, I think this contributes to one part of the story in terms of profitability. But as the asset-light growth grows disproportionately driving greater profitability, I think both kind of go hand-in-hand and kind of feeds into the overall margin profile of the company. In terms of enterprise performance and potential, I think we did demonstrate about INR 11,000 crores in terms of enterprise revenue. Consolidated top line was nearly INR 6,000 crores, which means enterprise revenue is roughly double that of the consolidated top line. We think with all the activities, the strategy and the execution we are doing, the potential is clearly approximately INR 15,000 crores as we go through the Ahvaan period actually. Productivity focus, I think we have spoken about it consistently, saying that we are focused on productivity ever since -- even before the pandemic, when we announced Aspiration '22. Our 8% growth in margins at that point of time came through a combination of revenue levers as well as cost levers, and that continued through the pandemic. And we have demonstrated that we are able to continue to maintain productivity. On raw materials, inflation, of course, is impacted, but we have also been able to pass on the price increases to be able to maintain the raw material percentages at the similar levels like prior. On payroll costs, the staff-to-room ratios are effectively managed. Investments in digitization and technology are also helping. And therefore, we will be focused on maintaining the productivity in terms of manpower. On power and fuel, for instance, all the -- we are very encouraged. Hotel by hotel is implementing multiple schemes in terms of renewable power and cheaper power actually, and that is helping us actually. Corporate overheads has been one of our biggest success story. What was in 2017, '18, and what is today in terms of network is double, but it's the same, the corporate overheads have not gone up at all. And I think the corporate over productivity continues to be very strong, actually. And so the focus on productivity is something that will continue. Last year, I think we had given us a guidance in terms of margin and free cash flow. I think largely the guidance remains intact. People ask us having achieved 32.7% in terms of EBITDA guidance, is that going to go up? I think anything about 30%, 32% is a very, very strong EBITDA. And therefore, I think we believe that's a very fair EBITDA in terms of our guidance actually. I think what is going to happen is that the growth of existing businesses, the growth of asset-light businesses will continue to drive the top line and the margin profile actually. So I think as we kind of model, I think, please, we are not, at this point of time, kind of saying that 33% EBITDA is a guidance, which is fair at this point of time actually. And this guidance in terms of how the split will happen from revenue to cash flow is also broadly correct. And that is something that we'll continue to do. Moving on, I think capital allocation principles. I think the question from debt to cash and people have been asking us in terms of capital allocation principles. There are really 4 broad themes that we have here. Number one is to build resilience. And resilience means that if there's another cohort, another GST, another demonetization, we should not be going back to the market in terms of money. So there is a strategic reserve which is being built. At this point of time, our view is that it's about INR 750 crores. And this will not come down below INR 750 crores, it could go up actually. The second is the -- what do you say, the CapEx which happens in terms of renovations actually. I think these renovations will happen. And the big picture guidance is that renovations will be in line with the depreciation for the year. Of course, there may be exceptions in certain years, actually. The third is dividend. You have seen the jump in dividend. We have not yet announced a dividend which is linked to PAT, but that is something that we are working through, and we may come back to the market at an appropriate time. But you will see that dividends will be -- because for us, it has not just got to be meaningful, it's got to be sustainable, and we are being steady about it. And in terms of greenfield and M&As, those are part of the plan. I think the important direction from the Board on this is that a greenfield and an M&A will -- whenever it happens, it cannot happen at the cost of the balance sheet actually. We have -- I think the guidance from the Board is that if there's a great property available, go for it, guys, if the economics works, but we will find the money without impacting the balance sheet. And I think that's the big-picture message. If you go back into history 2007, '08 and when we went into some of our M&A activities and acquisition activities, I think it did impact the balance sheet. Now we are saying that we cannot afford that to happen. And so the balance sheet protection and integrity has got to be a very important plank of it. As far as greenfield is concerned, we may be open to some level of project-specific debt actually. Like if you're doing a project in [indiscernible], we are open to some sustainable financing, for instance, in that project, but that has got to be completely funded at that level actually. But those will be carefully tracked at the project level actually. So these capital allocation principles will be the cornerstone of how we will manage the balance sheet. ROC is something that we have been focused on, and that has been going up through the years actually. And there are some numbers here. And there are detailed workings in this slide, which gives you the numbers, where ROC and hotel assets is about 16%, and ROC and domestic hotel assets is 24%. So if you look at the domestic operating assets, I think in the last 6, 7 years, when have we built new assets, maybe Guwahati has been a new one. We have renovated the Mansingh. We have put up on demands, we have renovated Connemara. [indiscernible] and Santa cruz is coming up actually. So no significant new greenfields has come up actually. And these properties, as you have seen in terms of asset sweating, has been very significant. So the ROC and domestic assets will continue to be very strong. And the other thing to note is that when investors ask me about ROCs, I think there is a historical ROC on our balance sheet, which is getting rectified and improving as we go forward. But on an incremental basis, where incremental capital is being deployed, we will always ensure that the ROCs are strong actually. So that's the message on this slide. On the stand-alone side, it's even better, because those assets have been the cornerstone of the growth of this company. So these ROCs are even better actually. With this, I think I'll pass it on to Puneet in terms of the closing comments.

So are we well positioned for the future? I think so, because the macroeconomic tailwinds are positive. There is an India growth story that we should not forget. India is definitely among the leaders in GDP growth and it's among the top 5 economies expecting. And what you say, not just expected, but it's ambitious enough to try to go among the top 3. There is a lot of focus from the government on infrastructure. The better the infrastructure, the more the number of airports, the more the number of highways, the better it is for our business. So I think one of the most important indirect beneficiary of infrastructure investment is the tourism and hospitality sector. And India is emerging more and more as a services economy. And even that would benefit on the discretionary spend in terms of disposable income. So I -- we do believe that these macroeconomic tailwinds should help us. Earning power and spend patterns are also continuously evolving and moving in the direction of unique properties, experiential tourism. Anything which is different, gets more attraction. And I think which is one of our very important competitive advantage by being present in 125-plus cities, especially now with also other businesses like the home stays. And also the spend from the top 25 is actually becoming lesser and more of the non-top 25 are beginning to invest. So there is a structural shift also there, which should also help heterogenous country like us in very different kinds of destinations. And we are very positive about that. The more important factor, or I would say the most important factor, is RevPAR. But RevPAR, rate and occupancy is always a consequence of demand and supply. So as one would have read it, the demand is outpacing supply, especially on our home front, which is more than 85% of our business is India-centric. And due to lack of supply that was built in the last 3 years, even if some catch-up was to happen. In the short to medium term, the expectation remains that demand will continue to outpace supply, which means higher occupancies. And if the occupancy is high, your ability to charge is higher. So that's another positive trend. Now are we well positioned to proactively capture this potential? Yes, because the macroeconomic factors favor us immensely. Demographics, having young-age population, which is expected to hit the sweet spot around 2040, the sector itself, the sector has cyclicality. And we believe that we are at the -- in an up cycle since 6, 8, 9 months. And typically a cycle does last anything between 4 to 7 years based on the previous history or cyclicality that we have seen in the business. And this is happening in all segments and at all price points. Obviously, the higher you go, the more profitable it gets, because once you cross that famous cost volume profit analysis chart, then the divide after reaching the breakeven point increases significantly. So that way also with the premiumization of our portfolio, we think we are very well positioned as IHCL. We have industry-leading RevPAR. We have industry-leading growth. We have industry-leading margins. And we are a part of maybe one of the top global leading group with all possible other verticals, which could help us in having a robust, sustainable, profitable growth. With that, we come to our famous pyramid, the same, which we started with in Aspiration 2022. Only the bubbles out there have changed into INR 300-plus crores and the margin guidance from 25% to 33% and the 0 net debt. Our balanced portfolio was always a part of it. The bedrock remains the core values. I always say this when I have investor meetings, we can change strategy from Aspiration to Execution to Performance and to calling it Ahvaan, but you don't change your core values every day. So our core values of trust awareness enjoy in the 5 core values of Tata with our enablers of enabling through the iconic assets through our ESG [indiscernible] as a program through our one digital initiative after the other, so leveraging the digital, using one Tata as a source of very strong business and our continued excellence in operations would definitely help us or -- so that we can continue to reimagine our brandscape, restructure our portfolio and reengineer our margins on a sustainable basis, so that we become the most iconic, which we have always been and as facts would point out now also, the most profitable hospitality ecosystem that South Asia has to offer. So in summary, I would say, clear aspirations, robust strategy, powerful and passionate execution engine can help us to be very confident in delivering on our strategy and which is summarized under responsible profitable growth, which will benefit with the strong tailwinds, both from a macroeconomic point of view as well as from the sector. Also, our advantage, strategic advantage of being in 125-plus locations as well as our portfolio of brands. Our culture and our capabilities, our very strong 120-plus year culture of Taj and a bit longer when we add all the AGMs of IHCL, our long-term focus on sustainable growth of ROCE or return on capital employed and achieving all this in a right and responsible way. We do believe that what we promise, we will deliver like we have done in the past, save for any event, which is out of our reasonable control. Thank you very much for listening, and happy to take any questions.

[Operator Instructions]

This is Kaustubh from Sharekhan by BNP Paribas. I have a few questions. First, you spoke about smart renovation. So do we have any particular target in a year that 15% to 20% of our room inventory you will be focusing on renovating, so that you can have more opportunities from those rooms?

So not really. I think it comes with the need basis. It's not that everything is so bad that we'll do every year, 15% and in 6 years we'll be done. So I think a lot of this, as we said, is also based on certain trends. So if we launch a new restaurant concept like Loya, which we've done in Taj Palace, we are changing it in West End, and we are also bringing it to Taj Mahal Palace in Colaba. That's not really renovation only, right? So it's also an introduction of a new concept and a kind of a new line of F&B offering. We also have the work. We also had the Masala series, right? So this is a continuous investment. It is done on a very strategic basis. And the normal renovation comes under 2 heads. To answer your question the other way around, 2% to 3% of your revenue of a property, whether managed or owned will go into the general upkeep on an annual basis. There is a painting or a polishing, replacing some of the items which cannot be capitalized. The major renovations would be in the same ballpark as both, Giri and I have pointed out. That is typically in the industry and the sector as 4% to 5% of your top line in one or the other year, because we were investing, let's say, in Itanagar, it might show a jump. But a few years later, it might show a less amount, because we might have sold that property and taken it on a sale and leaseback or a sale and manage back because of the way the tenders are structured. So some of these government tenders, you're -- you should have the company that is actually running and operating a hotel owns a brand, but then you cannot transfer immediately. You have to wait for 3 years to transfer. So some of those things will happen. We don't have the strategy of suddenly becoming asset-heavy because of that, but we can't let go of a business opportunity.

My second question is you spoke about launching one more brand or adding a brand to your portfolio. So is it like you want to tap Tier 2, Tier 3 towns? So there you are looking out for any specific brand [indiscernible] or there is...

No, for Tier 2, Tier 3 cities, we have Ginger and we have Vivanta. That will work. Every state capital in India can have a Vivanta. And every district capital can have a Ginger, also, obviously, state and the national capital. So that is not the reason. The reason would be to diversify your brandscape into another kind of business. So there are many such possibilities that are there, which a lot of other companies in this sector, mostly outside of India in the Western Hemisphere have done. And I think very soon, we will get to that. As I said, we are studying various options. We have some of our own preferences, but we'll see how market evolves. Definitely by next Capital Market Day, which is in a year from now, we'll be able to tell you what it is.

And one last to Giri, sir. Sir, you spoke about the EBITDA margins that you are maintaining at around 33%. The guidance has been met and, we have seen that you are raising up the Ginger guidance to around INR 650 crores. You're raising some of the other businesses' guidance and also the room demand/supply. We know that the demand is going to be better than supply. So from the domestic [indiscernible] point of view or a business point of view, next 2 years are going to be good years for us. So then why are we sticking to the guidance of 33% and not raising it up to around 30% to 35%?

I think as I said, 33% is a very strong margin actually. And I think -- and since we're talking about guidance, I think there's no point in -- I mean we just want to be careful to sort of say that it's a very strong margin and growth will happen anyway in terms of top line growth and margin growth, but we don't see a reason to change that at this point of time. I think that's only fair. I think measure us in terms of performance, don't measure us against the guidance actually.

I think I might want to add something. Firstly, I must compliment you on the question you asked because if you're obviously growing Ginger and you're saying we'll do in ginger 50% to 60%. So mathematically, the margin should go up and your ability to charge is there. All these factors should help. Having said that, 72%, as we said in the presentation, is coming from Taj. That's number one. So -- and that we want to keep it that way, because that's really our backbone. And that kind of iconic brand, as I mentioned in the presentation, requires certain investments, innovations, new F&B concept, new private membership club. There are a lot of additions that need to be done. But some of you who do the analysis which I said in my presentation, like-for-like and not like-for-like, we should also take stand-alone and consolidate it throughout. So if we take stand-alone, that's why your question is very good and relevant, we are already at almost 40%. So it could even go to 42% or 43%. That's not the issue. So I think while comparing with some of you people do in, sometimes it really hurts us, [indiscernible] that some comparisons, I've created a new term. It's apples versus oranges and now we have added even small grapes to it, right? So it has to be a -- so the question is great. Yes, that will happen. But stand-alone is different on consolidated. When you add properties like London, New York, Cape Town, San Francisco, et cetera, and that's what we account for, then that is a very good margin for a company with a more global footprint. And those figures get added and get multiplied by 100 for a pound and 82 for a dollar. So those numbers become very big. So they also create that disproportionate, but we would not be the world's strongest brand if we were not present in the 2 top logic markets of the world. Only Paris is missing. So we had Paris, then it is a 3 top logic market, the top 3.

First of all, congratulations to your -- this is Nihal Jham from Nuvama. Three questions from my side. First is, traditionally, the hospitality space used to work was that you used to have business on books, have a pipeline. And once you had a certain occupancy would go for rate hikes. You've been mentioning over the last few quarters that the visibility in the sector is obviously reducing much. So in that background, how do you see the kind of RevPAR performance you mentioned for April sustaining? You believe you maintain the rates that keep taking hikes and believe that the [indiscernible] coming in and the occupancy plays out?

We would like to believe that the '23, if you take that as a base that you can still achieve close to double-digit RevPAR growth going forward. We would like to believe that, and there is nothing that we know at the moment that makes us believe the contrary, right? So especially the events when they pick up momentum on G20 or the World Cup ticket or when the FDA are not free trade agreement, but the foreign tourist arrivals come back to the pre-COVID level, which was at 60% last financial year. If it comes back to 100% or goes to 110%, 120%, that kind of quality of revenue growth is possible and should happen. There's nothing that points out why it should not happen. It's not like -- a pent-up demand is 3 months, 6 months, 9 months. The pent-up cannot go on for 15, 16, 18 months or other people like to call our nice business of providing experiences and unique dining, some call it revenge that this is all revenge travel. I mean I think it's over. So I think we're on a very good wicket because of the demand and supply being in a positive sync for the sector.

That is helpful. A related question there was that again, the share of transient has seen a good increase versus corporate. You see that normalizing? Or you believe that, that's the way the mix will be in the future also for you?

The share of transient is 50% plus. If you look at our history, it's always been 50% plus. And we would like to keep it that way. In fact, I think if you look at our corporate strategy also, I think a couple of things have happened. Number one is that many smaller corporates have actually moved them to transient, that's number one. So I think transient will continue to be -- the non-negotiated segment will continue to be up 50% plus of the business. We don't see that changing, actually. And even in corporate, as I've explained in the past also, we made some contract changes where the rates are getting fixed for many of our corporate customers as a rate of the best available rate, which means if the bar changes, the -- goes up, the discount of the best available rate also goes up. So those contract changes are also helping us. So I think we will continue to do those actually. We'll continue to do this.

Just one final question was you made a statement saying that you don't want the IHCL of Taj -- IHCL to be associated with any brand which is not premium and you've seen that Ginger is also in a way, [ upstate. ] So is it other budget as a category is something totally out? And if any thoughts on the positioning of the new brand in terms of where it would place?

No, that's not accurate, or maybe I did not communicate it well. In every category, the brand in that competitive set must be perceived as the premium brand. So of course, Taj stays at the top, then you have Seleqtions or Vivanta, then we have Ginger. But Ginger should not be perceived as the way it was launched, as a cheap product, which is everybody's possibility for INR 999. No, that's -- that was maybe right when it was thought through, but the world changed. It became -- the entire world became aspirational. So I think the Ginger in its positioning, the room size has not changed. It's become more fun, it's more interactive, it's more colorful. And it does 3 things very well; it provides the best bed in town, it provides the best coffee and the best shower in that segment. It's what that the Ginger brand is now better than Taj, it's not. But within that segment, it is the best.

[indiscernible] I have my question more around our core cities. What would be your strategy in terms of maintaining, let's say, growing RevPAR? Do we more ARR or occupancy, and especially in the light of competition, also trying to flex muscle there.

The core cities, you're talking about?

The core cities, let's say, the metro cities because as we talked about, the pent-up demand already having played out and the competition also trying to come in there. So what would be our strategy going ahead?

No. But I think these cities are resilient. I mean you have seen we put up the charts for Bombay and Delhi. And I think these cities are resilient, and they will continue to grow. And for instance, take Bombay, now the Jio World Convention Center has come in actually, which means you'll see a lot more conferences happening. And when that happens, the hotels benefit as an example, actually. So these cities will continue to be very strong. And that's true for any international market. If you see -- when you talk about occupancies, again, these cities always have an occupancy in excess of 75%, whether it is New York to Hong Kong to Singapore. All these cities have strong occupancies, and there is enough resilience in terms of building it. So there is no concern actually.

This is Achal from HSBC. I have a couple of questions. So first of all, on the capacity, you mentioned that the capacity last year grew by 4-point something. And then you referred to some of the consultant report which suggests that the capacity is going to grow in that range. So just want to understand, if you break it up between the greenfield and the brownfield. So basically, it is the greenfield capacity, which is going to be added. Otherwise, it's just a switch, right? So that capacity was already there. So in terms of that breakup, what is the kind of capacity growth was there? And what kind of capacity growth do you expect going forward? And especially the greenfield project, do you really see the greenfield project would be able to make the returns to offset the cost of capital? Because I think this is very expensive. We are talking about cost of capital, it is very expensive. Land is very expensive. So construction costs, do you think really could offset the cost of capital? So can you please talk about that?

So there are 3 things that you touched upon. Actually, you said 2, but there are actually 3. So one is greenfield, which takes anything between 3 to 7 years to get built. So that is one of the reasons there will be an imbalance in demand and supply, because what is not under construction will take this kind of time period. Something keeps happening, whether it's a bad weather or the construction stops or something else happens, it just takes a bit longer. The second thing that you said is brownfield. Brownfield, the way we define is not already in the capacity. It's something which somebody started building, and it stopped because of lack of funds or something else changed. So you try to get that property, that time to completion is less. That could be 16 months, 12 months, 18 months, et cetera. The third, which you are saying was already included. That is neither greenfield or brownfield. It's a conversion. So either it's unbranded that gets branded or it's changing from one brand to the other brand. So these kind of 3 activities, that's the fastest way of growing and that some people also call it, if it comes in a larger chunk, it's called an M&A or a consolidation in the sector. So these 3 are different. I also agree with what you said, greenfield will take longer. And the cost of land in hospitality business with your ability to charge makes greenfield construction not very conducive to the return on capital that is needed. You get it ultimately, but after 5, 7, 8 years that the property has been in operation if it's in -- especially if it happens to be in the metro. Sometimes you have to calculate differently. We had the Santa Cruz Taj flight kitchen land for 27 years, stating they're doing nothing with a dilapidated old flight kitchen building. So we are looking at only incremental investment and then the return on that incremental investment, because we already had the lag. But that's not the only place where we have the lag. There's are many other spots, including right opposite this hotel where we have the land, which is actually not helping us in our return requirement. So there are many others where we have the FSI available. And we feel that that's how we are better positioned to monetize on those and also propel growth of our brands, especially ama in the home state. We had not done it because we kept it as a purely asset-light model, but building on, let's say, as an example, if we have Taj Exotica in Goa, and it has FSI available, and if we create a cluster of armors and call it ama Village or whatever out there. So it's something which is very positive. So that -- it depends from company to company, brand to brand and your source of capital and whether you are funding it through your internally accrued free cash flow or you are borrowing money. So in our case, I think all these things, as we speak today, are all very green and all very positive. And we have all possible options to do that.

Yes, that's fine. But just to understand, I mean, I'm not sure if you can break up the capacity growth expected between the conversions and the greenfield plus brownfield.

We can, we can. So 60%. So the one thing which we will change when we do the next Capital Market Day, is we'll give you more data by brand, by contract type and by geography. So if we took all those parameters and say India is the place, then almost 60% of our growth will come through new projects, new constructions. Around 20% will come through brownfield and 20% will come through conversions.

Okay. Perfect. My second question was around the revenue management. So basically, of course, ARRs are very strong. But how much of that part is contributed by the revenue management efforts from the hotels and how much is driven by the market? Basically, I think just like airlines, I mean there is a huge scope for flexibility in terms of tariffs later or earlier. And so what kind of contribution do you think in this ARRs growth or strength you reported is contributed by the revenue management? And what sort of -- what revenue management are you doing at the moment? Or are you adding something on that part?

Looking at our Head of Revenue Management is sitting in the audience. So I was wondering, would you like to answer that, Beej? Because it's really checking the credibility's revenue management able to add value in a strong market. [ Ateli ] gets the mic. I think revenue management is a bedrock of any good hotel management company. And we have various tools from forecasting to measuring business on the books to when to launch, which campaign for how many days, which partner or do it alone, should we go for digital, should we go for print in terms of supporting that campaign for advertising? And it's not just the rates, we tend to forget revenue management is a much larger signs. It starts -- it includes the content; the content on the website. So I think this -- I give to you now Beej, you can take over from here.

Thank you, Sir. From a revenue management point of view, I think from [indiscernible], I think we're very well poised and what efforts, what we are doing is driven towards growing as well as occupancies, so it's a fine balance. As we move forward and like what we also [indiscernible] a short while back. So we have a lot of reliance when it comes to the transient bit of it, which actually gives us the ability to flex and charge rates based on demand and supply, which basically helps to yield up as we move forward. From a tools and technology point of view, I think the group itself is investing quite a lot of technological things as we move forward. We have -- when it comes to forecasting, we use revenue management systems and pricing algorithms which basically helps us to forecast as well as predict demand to do the right things at the right time, across distribution channels, whether we're talking about our partners, whether we're talking about our own loyalty programs, and that is what we are doing when it comes to revenue management as we move forward. Does that answer?

You have to give the mic back.

Thanks, Puneet. Last question from my side is -- sorry, coming back to the question which you like, but you don't want to answer, about the 33% EBITDA margin. So if I look at your -- the chart showing operating costs, especially as you said, the admin cost and all those sort of things, I think, have performed so well. And the operating leverage is so high, I mean, just a small increase in occupancy -- or the way the growth is structured, EBITDA margin should naturally go up from here on given that your costs are not going to increase and the kind of inventory you have on order or coming up. I mean, what exactly makes you to sort of -- to think twice before I mean, thinking talking about the margins or anything? Because I mean, as you rightly said, Puneet, the numbers really add up, that of course, EBITDA margin should go up. And especially operating leverage, looking at that, it looks like it should go up from here on, right?

It's as Giri mentioned and we mentioned. We can always -- it's not that we will not strive for more. But to maintain the quality of our brands, we have to continuously invest. We are not doing business from 1 quarter to the next quarter only. And I think your colleague also from the table behind had asked over the next 2 years. In our group, in our brands, we don't think just 6 months, 1 year, 2 years. So if you take a mid- to long-term view about where you see your brands, where you see your company, where you see all these things, especially when the going is good, it is also prudent to keep investing in the businesses needed for the future and keep removing. As a part of the management of the group, it is an obligation for us to increase the size of the cycle, and at the same time, decrease the volatility in the portfolio. And you cannot do all that by just being focused on 1 metric, which is margin. So that's why that whole pyramid has 3 Rs strategy, which is about also reimagining your brand scape. Now also, it would be fair to say that in the survival and revival phase, which we said also in the RESET, the T of the RESET was being thrift and financially prudent. When the times are good, also, you need to spend more before the bad times come because you'll not have the money. So I think it's finding the right balance. If we are able to do, instead of 33%, 35%, we'll be the happiest people, right? So we did that. But we cannot start with 35% and then define the strategy. So we follow our strategic course. If the markets continue to support us, if the rates continue to increase, occupancy continue to increase, the growth of ginger comes the way it comes, so mathematically, the margin will increase. But we're not saying it's not possible. But the guidance given by us is this is we plan as a management company. And I think Giri said it rightly. When we started on the journey of Aspiration 2022, and we said we'll do 25%. And I said it also in my presentation. People said, "No, this is not going to happen, especially the hotel consultants." So now when we said 33%, everyone says increase. Nobody believed 25%. So it's a very healthy situation. So it's -- I think it's very good to see the encouragement from all of you, go for 35% or go for 36% or 37%. Why not? So we take it as a positive. We'll work on it. But as a guidance, we have to look at the holistic picture. I think it's very important. Is it 33% off of a 15% increase in top line or a 10% increase of top line? Or is it a 35% of the top line staying the same or even a slight reduction? So that's why the percentage is just one factor. I think the entire theme that you kept seeing in the presentation from Giri was the diversification of the top line and that how INR 8,000 crores became INR 11,000 crore enterprise revenue, and INR 11,000 crores could become INR 15,000 crores. And if you're still maintaining that kind of good margins, then the absolute amount is a very different number.

So I think focus on the absolute PAT. I think rather than 1 single percentage, because ultimately, what we want is the HDFC growth story as an example, and just how does the P&L move? The 31 -- the revenue moving, absolute EBITDA is moving and absolute PAT is moving, actually. I think that is actually where I think -- will be great, actually.

Sure. Sorry, I just want to squeeze a last question, if I may. I know I'll not get mic after that, and I promise I'll shut up after that. I'll definitely shut up. In terms of Tata Neu, I guess, probably I'm actually more bullish than you are. So I just want to understand, have you seen any kind of conversion rate which is happening at the moment at the customer level, which is helping you out? And going forward, with more brands joining Tata Neu, what do you see? I mean at the moment, I guess you mentioned about 20% of your enterprise level revenue. But is that after all the brands joined Tata Neu? Or is that additional we are talking about? So if you could please talk about that, that would be helpful.

See, it's not just what additional you get, it's also maintaining because loyalty is such an important aspect of our business. You could lose your customers or you cannot acquire customers because they are stuck with another loyalty program. I have been with one or the other loyalty program in my life, and it's very difficult to move. Because when you move out, you stand to lose a lot. The great thing about Tata Neu is it's touching all points, from a grocery shopping, to jewelry, to whatever else, hotels, et cetera, et cetera. So your cost of customer acquisition as low. From our point of view, there are 2 things. One, as a hotel company with the kind of monies they're investing, I doubt if we would have been able to build an industry-leading loyalty program or platform on our own. That's the first. Second, our variable costs on being on that platform is actually less than the money we were spending before. Trying to get those customers, advertising on all possible social media and still not getting the customer to come through your website, and the entire sector keeps complaining about third party. So I think that is the ability, unique ability to do that part. The third is synergizing. Synergizing within the group with different companies is not only about a superapp, it's about all the business which does not come or would not have come otherwise because all this is bringing you and your teams closer to each other. So your first choice, your first thought which comes to your mind whenever you have to do a dinner or a party or stay in a hotel, or et cetera, will obviously be us. It should be with or without Tata Neu, but the likelihood and the strength of synergizing actually starts showing up. And then, as I said, you get a customer who is not necessarily a typical hotel customer. Maybe he's going to [ Koma ]. It is a big basket. But for the big basket customers staying, collecting enough Tata Neu coins and becoming -- those coins becoming an enabler to afford a stay in a Taj is very aspirational. So I think it's a holistic approach, and we feel that we are very blessed that, without making that investment, we are benefiting. And also from the know-how, see? We are very good in operational excellence in running hotels. We're not necessarily the champions of digital or building platforms, then we are in the wrong business, right? There are other people who know that best. And you cannot just build it today and leave it. This is a continuous change and investment which keeps happening. So on a weekly basis, sometimes on a daily basis, and all the kind of customers' aspirations, what they see. We understand what they would like to eat, how the plate could be, how the room should be, but not necessarily the digital journey of the consumer on using such kind of apps or superapps. So we need that help. So we are very blessed to have a company within the group that is building all this, and we are benefiting. Want to say something, Praveen? He's the -- he's our, not only Head of Sales and Marketing, but he's heading all the initiative on Tata Neu.

I think you've said most of the things. But just to answer your question, keep in mind that when we started this journey, we were 2 million as our active members. In 1 year, we have 4 million. And today, we have an access to over 70 million people as part of the conglomerate, which will grow above 100 million once Air India and all comes in. So I think the possibilities -- the world of possibilities is immense, and we have just started to scratch the surface.

[Operator Instructions]

This is Pranav from Rare Enterprises. So I have some basic questions, and forgive me for not knowing this. So can you just explain in -- because you have been repeating that Mumbai, Delhi, Bangalore, these guys -- these locations have even larger demand for properties in Taj category. So can you just elaborate, taking example of one city like Mumbai, what could be a potential Taj revenue here if you were open, you will to open one more Taj somewhere? So as compared to current revenue of INR 11,000 crores.

Right. INR 11,000 crores is for the entire system. But if we took the city of Mumbai, then let's say if this hotel is close to INR 400 crores, INR 500 crores, if you build right opposite, that could have also 700. Just one property itself could do that kind of -- because it's a very large development. As and when we get the permission, that's what we would aim for.

Right. So that means that one category below all the hotels are 100% occupied?

No, hotels are never -- I wish that was the case, that the hotels could be 100% occupied. It happens, but only in service residences because those residences are given for a longer period. Hotels, if they achieve in India, especially anything between 70% to 80%, then you're doing very well because that's what the sector is expected to do, 70% occupancy in the next few years based on a latest report, which came from HVS, Hospitality Valuation Services. And as Giri mentioned, places like Singapore, Hong Kong, London, New York, Paris, they're all 80% plus. Including Mumbai, 80%-plus market. And metros like Delhi, NCR are at 75%, et cetera. So it depends from market to market. And if you get to those kind of occupancy numbers, you're doing quite well.

Right, right. Just a question related to this only. So in next year, we understand that there are 3 main triggers, that is G20, then there is a foreign tourists and probably the World Cup also, which can actually help your RevPAR. But if these factors were not there, and you mentioned this in your quarterly conf call that actually base has moved up after a long time -- a long gap of 7, 8 years, and that's why there is a lot of support to RevPAR. But if these 3 factors were not there, then what kind of RevPAR actually you can expect in next 4, 5 years? On a continuous basis and avoiding onetime events?

There will always be a onetime event. If it's not happening in India, it will happen elsewhere, I'm just come last night from London. So there was a coronation of the king in London. And for 1 week, it's like the happening place, so it will boost the revenue in May. Some analysts was recently writing about another company, and Giri and I were having a discussion. There was a major air show in Bangaluru, and our Taj West End and other Taj properties in the month of March did exceedingly well. But next year, it's not there, but the year after. It's once every 2 years. So it is there. So if this year, there is G20 and no air show; in March next year, there will be an air show. So something keeps happening in the sector. And the one-off events, of course, of World Cup soccer or a World Cup Cricket, or an Olympics, these are onetime big events. So that benefit is definitely there this year for cricket, also for G20. But if that was not there, just imagine the kind of facilities that have got built. So very soon, the big convention center in Pragati Maidan as well as in Dwarka and Delhi will be open, which were built for this, but later starts getting used for other purposes. So in my career, I've seen that. When I was a student, we were working in the Asian Games village because Asia, it was happening in India. But that village did not move away because Asian Games finished. That whole complex became a new attraction for that part of town, right? So a lot of stadiums got built and the stadiums started getting used for day and night cricket matches. That's for the day and night cricket and also for music concerts. So a lot of things evolve with time. They get built for one particular event, but that facility cannot be moved. So actually, it's another improvement in the infrastructure. And as I said before, any improvement in the infrastructure as a direct correlation, just like RevPAR is a direct correlation with our business, improvement in infrastructure, having that facility, ability to hold 10,000 delegates under 1 roof, which was not there before, increases your reach to the world to get those kind of conventions.

Right. Right. Sir, last question from my side. In Ama, how many of the properties are group company owned properties? And are there any third-party properties that also we are acquiring? Any strategy out there?

We only own 2. The rest, we service. And we typically charge 15% of the top line as a management fee and 3% as marketing contribution. However, going forward, we might tweak that model and build a few of those on the land banks that we have. We haven't done that as yet. And as I said, we were checking the viability, but we might do that going forward. But only 2 of the 114 that we have total in the portfolio are owned by us.

Right, sir. And since you mentioned that the land opposite to this building itself, what is the status there in terms of approvals and so on?

The status is that the file has been moving for the last 2 quarters. That's the positive news I can give. It was not moving, it was stuck for several years. But for the last 2 quarters, it's moving. And any quarterly call or Capital Market Day would be incomplete, so thank you for asking that question.

Congrats for a great performance.

Thank you.

Mr. Chhatwal and Giri, this is Karan Khanna from AMBIT Capital. I had the first question on the demand side of the cycle and also the upside that's still left in the room rates. So survey by STR that tracks the top reason why people will not travel, or perhaps reduce travel until 2022, this used to be because of COVID, but now it's the cost of travel. So do you think that the change in consumer sentiment and the fact that most of the international routes are now fully operational, especially to Middle East, Asian and Southeast Asian countries? How should one think about the upside that's still left in the room rates? You spoke about double-digit upside in the room rate in FY '24, and some of the other listed hoteliers also spoke about low to mid-digit upside in the room rates.

See, there are certain events in our life which change or have an impact on the behavior. So I don't know how many of you in this hall, actually after the first wave, started driving yourself and go on a holiday or started combining business with leisure and go to a destination where there is a good Wi-Fi. So I usually give this figure, which is a very easy one. Let's assume that it was only 10 million people out of a population of 1.5 billion who started driving themselves and got used to it. First time was very difficult because if -- you had not done it before. Second time was less difficult. Third time, it became normal to do that. So of those 10 million people, if only 10%, which means only 1 million people are doing it permanently in whole of India. These are just fictitious figures. And they only spend 7 nights in a year: Once 2 nights; once 3 nights; and one more time, another 3 nights or 2 nights, right? Then that is 7 times 1 million is 7 million additional room nights which were not there before. So that is what is having an impact because the term leisure was coined maybe 10, 15 years ago, but it did not happen to the extent that it is happening now. So if there is a holiday, there were people also going before. If a holiday was there on Tuesday, you take a Monday off and leave on Friday evening and come back on a Tuesday evening. But the amount of that happening now is higher than it was happening before because there is that change. And also, again, through improved infrastructure. I have not done it myself. A friend of my recently was -- had organized his company's business conference in Jaipur, and he drove. And he said to me, while he was on that highway, he called me and said, "You actually have to see this new highway which is going to link Delhi and Mumbai. And a part of that goes through to Jaipur. And this is as good as any other highway you would have seen in the world." So this is the way things are changing. We are in a very dynamic kind of a situation where demand is back, supply is constrained, infrastructure development is moving fast. Even government is talking about tourism, which was mentioned by the Honorable Finance Minister in the budget speech. And we had, post-budget also, meetings. As I chair the CII and National Counsel on Tourism, I can say that we have spoken more about tourism and what we can do. And a global tourism investment summit is also planned to be held in Delhi in the next months, the date has to be confirmed. All this was not happening to the extent earlier. So these are, for a sector like us, it's a positive. And we have not seen so many positives come together, and that what you said rightly, it's demonstrated in the results that are being announced quarter-on-quarter by different listed companies that we can all read.

My second question is on the supply. So you spoke about 4.5% supply CAGR over the last 3 years. Let's take the number as 160,000 branded room inventory in the country today and possibly expected to go to 190,000 rooms by FY '25. If I look at the data, so you have close to 5,000 rooms that are getting added. Recently, Tony Capuano, when he was in India, he spoke about doubling their hotels from close to 110 hotels in '21 to nearly 250 hotels by 2025. And other hoteliers like Wyndham, Accor and even domestic, where like Lemon Tree also talking about a very strong pipeline. So if you can help us understand how confident are you on the supply continuing to be lower -- in fact, significantly lower than the demand that you're suggesting?