The Indian Hotels Company Limited (500850) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Indian Hotels Company Limited Earnings Conference Call for the quarter ended 31st December 2025. On the call, we have with us Mr. Puneet Chhatwal, Managing Director and CEO, IHCL; and Mr. Ankur Dalwani, EVP and CFO, IHCL. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Puneet Chhatwal. Thank you, and over to you, Mr. Chhatwal.

Good evening, everyone, and thank you for joining our conference call for Q3 '25/'26. We are pleased to inform you that we have continued a record performance for the 15th consecutive quarter, driven by sustained strength in our core business while building scale with profitability. I will now want to outline the 5 key sections of this call or this presentation from us, after which we will take you through each of these in detail. These 5 key sections would be number one, performance; number two, pillars of diversification; number three, portfolio and pipeline number four, partnerships and platforms. Number five, prospects and possibilities going forward. Let me now begin with the number one, which is performance. On a consolidated basis, revenue for Q3 '25-'26 6 grew 12% year-on-year to INR 2,900 crores. EBITDA grew 11% year-on-year to INR 1,134 crores yielding EBITDA margin of 39.1%. Our consolidated PAT before exceptional items grew 15% year-on-year to INR 668 crores, highest ever quarterly PAT in IHCL's history. For the very first time, our quarterly EBITDA for Hotel segment crossed INR 1,000 crores, yielding 40.7% EBITDA margin. Our stand-alone performance in Q3 was also the best ever with 9% growth in revenue to INR 1,654 crores and EBITDA margin expansion by 40 basis points to 48.2%. Stand-alone PAT before exceptional items grew 13% to INR 529 crores, taking PAT margin to a robust 32%. For 9 months '25-'26, we delivered consolidated revenue growth of 17% year-on-year with EBITDA margin of 34%, in line with our guidance of double-digit revenue growth. What is important is to step back and reflect on our growth journey over the past 4 years. As you would have seen, we have delivered a double-digit CAGR across revenue EBITDA and PAT on both consolidated and stand-alone basis. On the investor presentation, there is an interesting Slide #5, if you would want to refer to during or after this call. These numbers underscore the consistency, quality and the structural strength of our business model. With that, I move to point #2 or section #2, the pillars of diversification. Having discussed our performance, the move to the structural drivers behind it is also important because we have now a highly diversified business model, a journey we commenced a few years ago, we're right in the middle of it with a few more years and several more quarters to go. Let's first take this journey across brands. Taj continues to be our crown jewel with 69% of our operating revenue coming from the luxury segment anchored by Taj. At the same time, as the overall revenue pie has expanded the contribution from our other businesses and reimagine brands true has scaled meaningfully. The new business vertical comprising of Ginger, Qmin, Ama and Tree of Life now contributes 8% of total revenue. At the same time, TajSATS contributes 13% of the total revenue. Our upper upscale brands, Vivanta, SeleQtions and Gateway account for another 10%. This balanced brand architecture allows us to capture premium pricing while participating in structural growth across mid-scale and emerging formats across all of India. Second pillar of diversification is geography. 53% of revenue comes from key domestic business cities, 15% from domestic leisure destinations and 22% from international markets. The balance, obviously from other domestic locations. This diversified geographic mix reduces concentration risk, smoothens cyclicality and ensures resilience across demand cycles. In a sense, diversification is not incidental, it is deliberately designed to drive stability scale and sustainable growth. Diversification is not only about revenue mix, it is also very important for capital efficiency. If we take the breakup of our operational portfolio, we have 32,300 keys, of which 68% are on a capital-light model, managed or fully fitted revenue share lease structures. You would recall those who have been with us for several years that 8 years ago, this number was the other way around, that the capital heavy was around 78% and the capital light was 22%. This change in the ratios has enabled us to scale expansion with disciplined capital deployment, supporting margins and return ratios. More importantly, when we look at the pipeline, which is 30,200 keys under development. 30,200 keys is almost equal to the total number of operational keys that we have. 80% of our pipeline is managed, only 6% is owned or leased. Basically, 94% of the total pipeline is on a capital-light model. This significantly enhances forward visibility on earnings growth with limited balance sheet intensity. The result is a structurally strong business model, one that combines growth, margin expansion and higher return on capital employed. With that, I move to Section 3, which is about portfolio and pipeline. With 361 operating hotels, 256 in pipeline and a total portfolio of 617 hotels. IHCL today is India's largest hospitality ecosystem, spanning across 15 countries and 300-plus unique locations. Importantly, -- this translates, as I mentioned previously, to 32,300 operational keys and an almost equal amount of 30,200 keys under development which is an industry-leading pipeline that provides strong multiyear growth visibility. Moving on to Section 4 is about partnerships and platforms. Having outlined the strength of our portfolio and pipeline, let me now move to partnerships and platforms, a key lever for accelerating inorganic growth and unlocking value. We have completed the acquisition of a 51% stake in ANK and Pride. We have signed a definitive agreement to acquire a 51% stake in Brij. We have also completed the acquisition of 51% stake in Atmantan. These transactions strengthen our presence in high-growth segments, including mid-scale experiential leisure and holistic wellness while further expanding our portfolio, scale and geographic footprint. Importantly, these acquisitions are expected to contribute meaningfully in the range of INR 250 crores to INR 300 crores to IHCL's consolidated top line in FY '26, '27. Also very important is that we have divested our stake in Taj GVK generating INR 592 crores in cash, while retaining management contracts for all GVK hotels. We have also signed another contract with the GVK Group, which we announced for a 250-plus room hotel in Yelahanka in Bengaluru. That is about to open in the next 3 to 4 months' time. All this reflects disciplined capital allocation, recycling capital from ownership into higher return capital-light growth opportunities. In a sense, we are sharpening the portfolio while strengthening our operating platform. A key focus area within our platform strategy is mid-scale expansion, about which we have been communicating with all of you over the last 5 to 7 years. Yes, ladies and gentlemen, this is about Ginger, which today has a portfolio of 110-plus hotels, reinforcing its position as a category leader in the branded midscale segment. Post the migration and integration of ANK plus Pride hotels, the combined portfolio will comprise of 250-plus hotels in this segment significantly enhancing our scale distribution reach and owner network in this structurally underpenetrated segment. We have already signed an addendum for 20 hotels for brand migration with another 30 planned in the first half of FY '27, demonstrating our momentum of execution. Today, the combined portfolio of Ginger and ANK plus Pride has over 10,000 mid-scale operating keys with approximately 24% market share of branded mid-scale inventory. These figures are as per report from lodging econometrics. This scale provides operating leverage, stronger procurement economics, enhance brand recall and improved return metrics. Through partnerships and platform-led expansion, we are building not just incremental rooms, but scalable ecosystems that drive sustained growth margin expansion and long-term shareholder value. With that, I would want to move to the last section on prospects and possibilities. We see 6 clear drivers that will shape the next phase of growth for IHCL. First, like-for-like revenue growth momentum is expected to continue, supported by favorable demand supply dynamics in key markets and sharper asset management focus, something we have been pursuing for the last 7 years in a very focused and consequent fashion. Second, a strong forward pipeline, including balance sheet assets and greenfield projects. This provides multiyear visibility on revenue and EBITDA expansion. Third, management fee income is set to grow in the high teens, driven by 60-plus openings. Yes, ladies and gentlemen, 60-plus openings in FY '27 and sustained asset-light expansion on what we call a capital-light model. Fourth, Ginger and our new business verticals are expected to deliver 25%-plus revenue growth, supported by integration benefits and scale efficiencies. Fifth, TajSATS to continue its growth trajectory on the back of travel buoyancy and structural tailwinds such as new airports. Sixth, strategic acquisitions such as Brij and Atmantan will deepen our presence in boutique leisure and integrated wellness segments, a much awaited growth segment for the future. Collectively, these levers give us confidence in delivering double-digit revenue growth in FY '26 and FY '27 with improving quality of earnings and sustained margin strength. Let me just now address a few more issues before we come to the end of the call. Number one, favorable demand supply will continue to drive RevPAR growth. That is the core engine of value creation is the continuous growth in RevPAR -- and over the last few years, the sector has benefited from strong demand tailwinds and favorable supply dynamics. Importantly, we believe this is not cyclical alone but structural change that is here to stay. Because India's travel and tourism ecosystem continues to deepen, driven by rising disposable incomes infrastructure investments, MICE demand, weddings, spiritual tourism and premiumization of experiences. On the supply side, additions remain measured in several key micro markets, and this is ultimately supporting the RevPAR growth. For IHCL, this translates into continued pricing power across segments, improved mix and yield management, operating leverage flowing through to margins. As a result, we expect steady like-for-like revenue growth to remain a meaningful contributor to earnings expansion. Second, as I already mentioned, a strong forward pipeline as we are going to open a lot of hotels and our capital allocation remains disciplined. Our capital will be deployed only on high visibility locations -- our focus will be on growth driven by management contracts or fully fitted revenue share lease models in the midscale segment and selective capital deployment with strategic control and long-term value creation, justify ownership. All these ensure multiyear revenue visibility, margin resilience and strong return ratios. As you will all ask one question before you ask, let me address Taj Bandstand. That is a project which is both strategic and symbolic for IHCL and for the Taj brand and for our country, India. Excavation at the site has commenced since a few months and the tendering process is currently underway. We are progressing in line with the planned milestones. Once completed, Taj Bandstand will be a state-of-the-art project redefining the seafront skyline of Mumbai. From a financial stat point upon stabilization, Taj Bandstand is expected to contribute INR 1,000-plus crores to sales top line with EBITDA margins close to 50%. This reflects the premium positioning and strong operating leverage off luxury assets, which not only define the new skyline but create iconic buildings for the new and buoyant India. We have put some renderings on the investor presentation. I would welcome you to have a look through that. Number 3 is growth in management fee income with 60-plus expected openings in FY '27 and sustained signings momentum, our asset-light model continues to strengthen. As the share of managed hotels rises, the quality of earnings improved and improves structurally. We expect management fee income to grow in the high teens, reinforcing both profitability and cash generation. Then comes new business, which is at an inflection point, which is our fourth lever. This is emerging a significant growth engine for IHCL and I've already mentioned the growth of Ginger this segment, which is also getting support from Qmin, ama and Tree of Life as we move ahead in the next years. TajSATS is consistently delivering on all fronts. Q3 revenue grew by 17% year-on-year with an EBITDA margin of 26%, we only see this growth accelerating with newer airports coming in as well as TajSATS is venturing into non-aviation business segments, which should help it diversify also the revenue base. Finally, strategic acquisitions, which is brands like Atmantan and Brij. And I think these acquisitions underline our strategy. First, Atmantan, this marks IHCL's foray into the niche but fast-growing segment of integrated wellness in luxury hospitality. This acquisition was completed a few weeks ago, and we plan to add several new wellness slots and additional rooms in this segment. This property and this brand is projected to generate revenue of approximately INR 100 crores in FY '27 with strong margin characteristics aligned to the premium wellness positioning. Second Brij, this represents our penetration into the boutique leisure space, a high-growth segment driven by experiential travel and curated space the definitive agreements have been signed. -- acquisition is expected to be completed by March 31, 2026. This will also contribute approximately INR 100 crores in FY '27 and provide IHCL with a differentiated offering in heritage and immersive leisure destinations. In conclusion, IHCL stands today on the strength of a fully diversified business model across brands geographies, formats and platforms, enabling us to scale with profitability and resilience. We remain confident of delivering on our guidance of double-digit growth supported by sustained margins, strong like-for-like momentum and a robust pipeline that provides multiyear visibility. Our balance sheet remains healthy with gross cash reserves of over INR 3,800 crores despite having built a few of our owned assets like Cochin International Airport Taj or Vivanta and Ginger in Ekta Nagar investments into our core assets and our trophy assets like London or Taj Mahal Palace in Colaba or Taj Lands End. And as you would recall, in the last quarter call when we talked about the rooms being out of order for the Taj Palace in Delhi, which was around 130 rooms which have been renovated. However, and having said that, we will continue to invest in our core competitive advantages, our iconic physical assets, our diversified brandscape, and most importantly, our people. With scale, strength and strategic clarity, we are well positioned to shape the next phase of growth and to continue delivering sustainable long-term value for our shareholders. Thank you for listening and we will now open the call for questions.

[Operator Instructions] Our first question comes from the line of Shaleen Kumar from UBS India.

First of all, congratulations on a good set of numbers. Just to understand, we have a 9% RevPAR growth. Can you give a sense of like contribution of ARR growth and occupancy?

We have given that, Shaleen, on this time, as we had promised in several calls by brand. And because there is RevPAR growth and RevPAR growth, which is very different in midscale and what base we are talking about. So our growth in -- firstly, let me go by brand at Taj is at 8% at a base of INR 22,000. In Vivanta, SeleQtions and Gateway is 10% and in Ginger is also around 9%. So the majority of the growth is coming driven by average room rate, which if we take everything together, comes to 7%, which accounts for the 9% RevPAR growth. So 7% is ARR growth.

Got it, sir. And sir, if I can ask like how is the 4Q going on in terms of the RevPAR? Any sense on that?

You see, I personally prefer to talk about RevPAR, but I know that we always get the same question on RevPAR. I think it will be fair to assume anything in a similar trend or even higher is definitely not lower. So it would be fair to assume approximately a double-digit growth number. If not, then it could be 9%, it could be 8.8%. But I think with a bit of tailwind that we are currently having, we could get anything between 9% to 10% RevPAR growth. But definitely, you should expect a total revenue growth in a similar range as you have experienced in the past. So I would say 12% to 14% in Q4 as a top line growth is realistic.

Okay. So you think RevPAR growth of...

Yes, go ahead. Go ahead, Shaleen.

No, no, I was like paying down till now, we are seeing double-digit RevPAR growth, you said that?

Till now..

Yes. So I was just saying that till now, quarter-to-date is actually comfortably above -- comfortably in double digit. We'll see how the quarter plays out. And because we have, I think, big events lined up in the next couple of weeks. So we'll see how the quarter and February month plays out.

Sure, sure, sure. Got it, sir. Got it. Just changing towards strategy. I would really like to hear about Atmantan. So a few questions around it. What -- any sense of its positioning like in terms of what are the key payers it have? And in terms of your expansion plan, like what kind of CapEx are you thinking you will be needing? Like does it need a bigger CapEx or a small CapEx, multiple locations, et cetera? And so -- and in terms of the returns and margins, if we can get some sense of that because I think that could be a big sector going forward. So if you can give some color on that bit.

In the short term, which when I say short term, I think the next 3 years or so, we expect to grow Atmantan with the founders in a hybrid fashion. I don't think we will have all growth coming through own. There is a lot of interest in Atmantan brand. So if we did, let's say, 4 projects, at least 2 would be on a capital-light model and 2 could be owned by us. We would definitely want to have additional asset in the West and a minimum of 1 in Kerala. That takes us to 3 and another one in South in the area of Hyderabad because it has a lot of demand there and very, very affluent base. And maybe one in the north or in the East, I mean, in the Hill areas. So -- but the order of priority would be like this, the West and Kerala being top priority, followed by the others. That's our 3-year plan. We haven't gone and seen beyond that because the acquisition only completed less than 4 weeks ago.

Just to add, with the margins, we kind of disclosed the 6 monthly margins when we did the announcement. So they are comfortably above 40%. And for the full year, we expect it to be in high 40s only. So I think that's something which we think will sustain over the next year as well. And the pipeline -- we'll get more color on the pipeline as we integrate and move forward as to see which are the locations where we can sort of provide to Atmantan to expand. But that's a journey we have just started like Mr. Chhatwal said. So we'll get more clarity in the next couple of quarters on that.

Got it, sir. Just one last bit on that. What kind of CapEx per project we need? And like how big are these projects?

These are typically 25 to 35 acres kind of projects. So large land area is located outside cities, close to a big airport because a lot of clientele is also offshore from foreign NRI clients or just foreigners. So you do need connectivity. And then, of course, the location has to be in a place where you can actually benefit from the whole wellness angle. So whether it's near overlooking a mountain or a beach or close to a river. So those are the typical locations. So legal locations, high end. And it's not actually CapEx per room kind of a metric here because it's also how many wellness slots you sort of put in, how many treatment rooms you put in and what kind of medical facilities you put in. This, as you know, is an accredited facility medically. It's a combination of all of those things, which goes into CapEx.

Our next question comes from the line of Prateek Kumar from Jefferies.

My first question is on your reported margins. So we have had like stable margins year-on-year. There's a mention of some one-off expenses during the quarter in your slides. Can you quantify this one-off number and impact on the margins?

It should be around INR 20 crores to INR 25 crores, Prateek. Of course, we are on -- we've been on a journey of acquisitions. It obviously increases legal expenses. It increases technical expenses. It includes deal expenses, due diligence expenses. These are some of the one-offs and some others are related to GST. And anything else you would like to add on?

No, I think that are the big heads. GST particularly has been expense, which we think will neutralize in the next quarter. So that would probably explain half of the impact. And then the deal expenses and some related to the marketing events, which happened one-off in this quarter. So I think all put together will be in the INR 20 crores, INR 25 crores zone. Adjusted for those, the margin would have been higher and the growth in EBITDA would be at least a couple of percentage higher.

Prateek, as a strategy, I think if we are going to have in a quarter like quarter 3, on a consolidated basis, which includes also international assets, margin close to 40%. And on stand-alone 48%, we are happy with that. Our main focus will be to grow scale profitably in all the new businesses that we have started and also asset manage the great assets that we have so that we can drive more and more revenue per square foot. So I think in doing so, all these things work in a certain way. The more we do for this long term, the more we displace in the short term. So like I said, Taj pilots, you take out the inventory, so there is a displacement that happens. Sometimes delays happen because of what you call grab in Delhi. that you have to stop construction, which is beyond your control. So there are things like this that happen. But if we can maintain margins close to 39%, 40% on consolidated in a Q3 and a 48% on a stand-alone, we are very pleased with that. We don't mind getting more, but then we would not be doing justice to the iconic assets and the positioning we have, which in long term will not help us to get those premium average rates that we are enjoying today.

Right. Just delving on this further, like in your opening remarks, multiple times, you mentioned about steady margins. So we should be like looking at maybe higher revenue growth and maybe similar EBITDA growth because we generally thought that there are like a few line items like management contracts, which can drive your EBITDA margin expansion year-on-year. But we are looking at -- I mean, while you talk about consol margins as 40% is something which you desire. So your core margins or like non-management contract margin seems to be then probably lower year-on-year and management contract is like expected to be 70%. Is that the way we should understand?

No. I think typically, it should be like this, if you want to understand is if the top line growth in our kind of diversified portfolio is around 10%, then the EBITDA growth could be 15% and the PAT growth could be 20%. I mean this is how -- if you look at our investor presentation, which will show you this kind of a trend on a quarter basis, you will see on stand-alone and on consolidated that the Q3 shows a 14%, 17% and 20%. Now there could be an improvement on that 17% and 20% if the revenue CAGR is 14%. Similarly, if you look at 9 months, it shows 13% and again 17%. That's what I meant by improvement, but the PAT goes to 23% in that slide. So I think this is the way to look at it that approximately, you can add whatever the top line is, you could add another 10 percentage points or double that for the PAT and somewhere in between is the growth in your EBITDA.

Sure. Moving on to other question. How are you looking at the New York assets now? There was like some news recent -- I mean, a few months back, you're looking to exit that station. What -- any update there?

Don't believe everything that is written. There is a very famous thing, you never eat as hot as it's cooked. We are very much there. We are operating it. The New York asset for the first time since we have it in the month of December crossed INR 100 crores in revenue. And we are, for the first time, in a lucky situation of cash profit, even San Francisco has done well. You will see that in the details. It's very iconic Fifth Avenue. We would like to keep it. We are in negotiations. We would know more maybe by the next quarter call that we have as to where we stand. But definitely, exit is not our preferred option.

Also we had clarified that, that was basically the news, which was not true when that came out in the sense that basically we said that we'll get X billion dollar of money because we are not the owners of the asset. We have a lease right on the asset. So that's what we are engaging with the owners of the asset.

Our next question comes from the line of Karan Khanna from AMBIT Capital.

Firstly, Puneet, you spoke about Taj Bank. On Slide 15, if I look at the revenue potential of the asset, is it safe to assume that you're building an ARR of around INR 38,000 to INR 40,000 at 78% to 80% occupancy at the time of stabilization? And can you reiterate the time lines for first year of stabilization? And when you're building these numbers, what kind of ARR growth are you penciling in here over, let's say, next 5 to 7 years by when the asset should stabilize?

Both on occupancy and rate, you could go marginally higher. And the year of stabilization should -- in such an asset, it does not take more than 3 years to stabilize. It all depends if we are able to complete by 30 or 29 or '31. It's very difficult to say that today because we are building a 164-meter tall building and a part of the construction is in water. There are things that happen in terms of climate and other things which are beyond anybody's reasonable control. So we do believe that given our experience of Taj Mahal Palace in Colaba and the kind of revenue it already does today, in 7 years from now, we could have the same base as that what we have guided for, which is INR 1,000 crore plus as the revenue base for the full year of revenue. So I mean, for the first full year of revenue and maybe going up 10% year-on-year to a higher number by the seventh year from now, which means 4.5 years to build, another 3 to operate.

Sure. This is helpful. Secondly, just shifting gears to this quarter, given that this was the first quarter after quite a while where the growth was entirely like-for-like. So is 11%, 12% consolidated revenue growth something you expect to remain largely constant going ahead into 4Q and FY '27 as well? And in the past, you used to talk about double-digit RevPAR growth and now double-digit revenue growth. So are you now seeing the rate growth cycle close to peaking, especially given that even for Taj, the RevPAR growth was around 8%.

That is not accurate. We said we still talk about very high RevPAR growth. That's why we said we'll start guiding by brand, and that's what we have tried to do it this time. The growth is there and the growth is very robust. We feel, as I said during my opening remarks, 12% to 14% growth going forward, of which maybe I can repeat only 8.5% to 9.5% comes through RevPAR. A lot of growth will come from not like-for-like growth if you're going to open 60 hotels. And some of the growth will obviously come from F&B and other revenue sources that we have, whether it's a private membership club or it is doing the paddle court or the pickleball or whatever else we might be doing in terms of ancillary revenues, including our spa business. Given the kind of base that we have, Karan, if we get to 12%, 14% growth, our flow-throughs can be very high. We had certain costs because if in a period of 3 to 4 months, you acquire a few companies, then the due diligence costs, the travel costs, the legal costs, all these fees go up by a significant amount. We expect all this to settle down by this quarter, which is the Q4. And we will continue our growth journey. I'm not saying we will not, but in all these years, we did not acquire so many portfolios of brands as we have done in just 4 months alone. and opened at the same time, 2 company-owned hotels, as I mentioned also before, in Ekta nagar, one Ginger, one Vivanta, plus earlier part of the year, the Taj at Cochin International Airport. So these are all start-up costs that come in because before the hotel goes into renovation and you have a company-owned asset, it creates a start-up cost. But happy to report that within the first 100 days already, we have had a breakeven on these assets.

Yes. I think both the assets which opened last quarter are now EBITDA positive, and that's a good sign for the new assets have opened.

Sure. And then lastly, just on the acquisition opportunities that are available, while some of the recent acquisitions, including Atmantan and Brij Hospitality, et cetera, while certainly value accretive are still relatively smaller in size given your current scale. So are you looking at any big ticket acquisitions? And are you seeing viable opportunities that are currently available in the market?

If anything comes, we are well positioned from having no debt and having cash to take advantage of that. But let's not forget those acquisitions that we did were mainly to consolidate and make our mid-market presence the strongest. So that post our majority of the market share, more than 50% of the market share in flight catering businesses with Taj sites that we achieved something similar in the mid-scale segment because with Taj, obviously, we are very, very strong with a portfolio close to almost 150 hotels and more than 90 in operation. So I think this is the reason we did that. We didn't do it because the ticket size was small or the revenue was this or the revenue was that. In a segment like Ginger, you need scale. And it took us 25 years to get to 70 hotels in operation. And -- but within 1 year, we will get to more than 200 hotels in operation. And that's -- when you go through the presentation and you see the map of India, which I think my colleagues are pointing out, it's Slide 10 on the presentation. It will give you a very good snapshot of how and what -- how Ginger would look like and what to expect from it in the next 12 to 18 months.

Our next question is from the line of Achal Kumar from HSBC.

Achal, you are very faint. Can you speak up? We can't hear you.

Is it better now?

Much better. Please go ahead.

Okay. Perfect. So basically, first of all, sorry, I joined a bit late. So kindly excuse me if you already answered the question. First question, I want to understand what happened to your management fee? I mean, so in the third quarter, management fee actually, the growth was slower than what we reported in the first quarter and second quarter. What's happening there? And then secondly, just to ask one by one, how do you see your wellness entrance now? And are you sort of intend to grow there? How do you see the wellness overall in the country doing?

Yes. I think the management fee for the quarter was about 15% growth, which is in line with our expectations. I think what happens when you look at from a quarter-to-quarter perspective, there are Incentives move from one quarter to another quarter depending on the performance, the incentive fee. But if you look at our guidance on the next year's outlook, I think which is more relevant, I think is you can see that we should end the year with a close to 18% growth on a Y-o-Y basis and the next year should be similar. That's what we are guiding towards high teens growth on the management fee, given the strong pipeline of openings with a large portion coming up in the first half, and that should really add to the management fee growth, plus the fact that whatever is opened will stabilize and you will have a RevPAR expansion in the new hotels, which kind of get to higher occupancy as they stabilize. So I think nothing unusual. It's just a normal business, which moves up and down in a quarter. But overall, we think this will continue to grow at high teens for the next year and then over a long-term period, mid- to high teens.

And on the wellness side, please?

On the wellness side, like we mentioned earlier, I think this is just closed the transaction just about 3 weeks, 4 weeks back. So we are obviously excited with the partnership because it's an ideal fit from our luxury positioning. There is definitely a very strong interest to do add more Atmantan. This is not going to be a brand which will get to like 100 Atmantan, but definitely over the next -- by 2030, actually 2030, we should be looking at having 3 to 5 more Atmantans. And that's the plan we will actually work on with the management team in the next couple of quarters, put the strategy together for Atmantan. But organically itself, there is growth opportunity in the current asset, which will add both rooms and wellness lots in the next financial year and take the revenues close to about INR 100 crores in the coming year. So that should give us good growth. And plus the margins for this business are very high. So this is typically north of 40%, 45% kind of margin, given that this is essentially a rooms heavy business, although we don't -- there is no concept of ARR and RevPAR in this. But essentially, when you sell a package, you're selling it as a combined thing for treatment as well as for stay as well as for food and beverage. And as you know, the beverage here is really soft beverages, there's no hard beverage. So all of that put together gives you a pretty high flow-through on the bottom line.

Okay. And then if I may squeeze one more. Basically, in terms of ARR, so ARRs in most of the city, which you reported, except Rajasthan, were sort of in low single -- I mean high single digits, while I think most of the peers have reported except Mumbai, I think Delhi, I think Bangalore, they reported very, very strong ARR. So what's happening? And I'm talking about the luxury hotels like Leela and all. So why -- what's happening with Indian hotels, especially in those markets where ARRs are reported very high by the peers?

Not really getting into what the peers have reported. But I think in general, if you see the growth on revenues across cities, it's a healthy mix with most of them doing well. I think the only city which has grown slower was Delhi and Bombay, which are 7%, 8%. And because we had some one-off business in the previous year, which did not get repeated in Bombay, particularly. And then Delhi was -- as you know, was impacted because of Taj panel renovation, which is not out of the way. So we should see that uptick also in Q4. But a lot of markets have done well, whether it is Rajasthan, Bangalore, Goa at 10% growth. So I think overall, you can see it's a pretty secular growth across the board. want add anything?

Achal, we can take it offline, but you should look at the base. The base of Taj is very high, and there comes a point that you cannot -- when you are a small company with a smaller base, suppose you are like a INR 30 crore PAT or a INR 50 crore PAT, you say 10% more is INR 55 crores. But if you are already at INR 1,500 crore PAT and then you have to add 10% means you have to add INR 150 crores. So that's a big difference. We are still ahead in most of the markets. But we also have multiple brand presence and multiple brand presence gives us scale, gives us that revenue, but also dilute sometimes some of the metrics at a high level if you take them. But if you took a hotel by hotel, the Taj Palace in Delhi is #1 in its comp set. The Mansingh in Delhi is among the top 2 in the comp set, Taj Mal Palace in Colaba is #1. Taj Lands End has always been almost #1. So it cannot be that others may be reporting maybe because they had a lower base. But on the STR statistics, I think most of our trophy assets are doing quite well and are always either #1 or #2 in any given market. And then obviously comes the size of the property in place. So if our competitor has doubled in inventory, then they may not be #1 very easily. And if we are double, then it's vice versa. So because there are so many shoulder days where you have to fill up the rooms. So I think that is not -- generally, the sector is doing well. Everyone is doing well. And that is what has enabled us to do 15 consecutive record quarters. And I have no -- nothing suggests today that Q4 will not be the same. There's nothing that suggests or Q1 as a start of the next year would be any different. I don't see that coming.

Our next question comes from the line of Sreetika with JPMorgan.

Just a quick question on the international RevPAR performance. Of course, last quarter also, it was stronger this quarter, again, also showing up in the margin performance for the U.S. and U.K. entities. How much of it do you think is currency driven? Is that a significant tailwind here? Or are you seeing structural improvement in demand in these markets? And what kind of run rate do you expect in terms of...

Very good question because it's a very interesting -- 1.5 years ago, 6 weeks ago, everyone had written off San Francisco. And it's coming back. It's not at the same level as its peak used to be, but it's back by 75%, 80% and the challenges of that market have kind of subsided and there is a lot of improvement. So our RevPAR improvement in San Francisco in Q3 is 50% versus the previous year, but the base had gone down so much that, that 50% is good to have, but should have been maybe 60% or 70%. So we expect that increase to happen. New York for us has started doing much better than ever was the case for as long as anybody follows us. For the last 5, 6 quarters, New York has improved both in top line as well as in bottom line. Cape Town is doing very well. One asset where we had the similar situation even now as we speak, is London. We have invested significant amount of money in London. So as we speak today, the banqueting facility, the lobby, the lobby bar, the lounges there, all is under renovation and some rooms also. So all that is expected to start coming back into operation between end of February and end of March. And that should give us a very big boost in definitely Q1 of the next financial year because that inventory will just come back now. So I think all 4 properties, you can expect them to do well. On management contract basis, Dubai has been performing well. Where we expect some improvement is in international is in Sri Lanka and in Maldives. They have not been doing that great. Those markets are a bit more -- have been a bit more volatile for us. And Otherwise, we are very pleased with the performance overseas. And one more asset to watch out definitely in Q1, not in this quarter of next year would be that definitely Taj Frankfurt would have opened. And in the Q1, somewhere towards the middle or towards the end, we would also open our first Safari at the Kruger National Park, followed by the second one in the same park in November of next year.

Understood -- but how much of it is currency driven that you have seen in this quarter specifically? And would it mean that we can see growth from these businesses inch up even higher in terms of RevPAR in the next, say, 2, 3 quarters, maybe even go up to mid-teens total RevPAR growth?

So on the currency front, it would be about 1.5% to 2% impact benefit of that, which flowed to the consolidated numbers on account. 1.5% on the RevPAR of these hotels, not on the overall numbers. So if this was 10% -- basically, it was 8% in local currency, it would have been 10% reported.

Understood. That's very helpful. So just on the domestic side, then would it be fair to say that the kind of 7%, 8% RevPAR growth is something that is going to be a more normal trend going ahead for the next couple of years? Or do you see any room for further expansion there?

I've been saying it, I think whether it's -- I've said it many times, I say it again, anything between 8.5% to 10% over our portfolio is realistic. That's one. But for us, -- more important is the not like-for-like growth. We could be doing over the next year, at least 40 new hotels, which are not part of ANK Pride or other portfolio, which will come on top. So I think our -- that percentage growth plus F&B growth plus spa plus chambers, think should definitely give us anything between 12% to 14% top line growth. RevPAR is only one metric.

And also in India, it is much lower. I mean it's not like the Western world as compared to where the revenues are.

International world, 60% to 80% in the Western Hemisphere, your revenue is driven by RevPAR in India, depending on which brand, but let's take an example of Taj is less than 50% is driven by RevPAR. Does that answer?

Yes. Yes. This is very helpful.

Our next question comes from the line of Akash Gupta from Nomura.

Congratulations on great performance. My question was for Slide 21. For the stand-alone ARR growth was roughly 6% on a year-over-year basis. I think that is slightly on the lower side. I just wanted to know your thoughts around that. And then when we say in FY '27, we are going to do roughly 8% to 9% RevPAR growth, how much of that would be driven by ARR or occupancy? Because I think we're already at peak occupancy.

Sorry, I had asked Ankur to answer, but I want to answer. See, Q3 is undisputedly the best quarter ever that we have had for as long as people follow hotel business. Your RevPAR in this quarter is already at such a high level. There is only so much more you can drive on terms of that like-for-like because we are like an iconic hotel company with being there for a long time. So -- if you look at on the consolidated slide, in the same slide, you see the room revenue growth at 11%. So you're only looking at stand-alone and stand-alone as some of those assets that we own -- but that does not include assets like Rambagh Palace, which is on management. We have Umaid Bhawan Palace it's also on management. The rates there in the peak in Q3 get close to INR 1 lakh -- so that is a difference in how we report. So somewhere, we get a benefit on the percentage. And in other places, we get the benefit through the management fee income. So in the case of stand-alone Jai Mahal Palace in Jaipur is included, but Rambagh is not. Hari Mahal in Jodhpur is included, but Umaid Bhawan is not. The rate in Jai Mahal is less than half of Rambagh and Hari Mahal is also less than half of Umaid Bhawan. That's why we came up 8 years ago when we first guided, we came up with the most iconic and most profitable, most iconic because we have these iconic assets, which we have to always kind of polish and keep them as the crown jewels of the company and most profitable because Jai Mahal profitability is far higher to us and the income from Jai Mahal Rambagh has. So it depends how we read these numbers because everything that we have in stand-alone may not be our best asset.

The next question comes from the line of Sameet Sinha with Macquarie Capital.

A couple of questions. First is Puneet you were talking about 12% to 14% revenue growth for the fourth quarter. Did you say that -- should that 12% to 14% should continue into the next year as well? And if yes, then...

Yes.

It should. Okay.

Absolutely.

That includes the INR 300 crores of acquisitions. Correct?

That includes that. Not like-for-like growth is an important component of our.

Right, right, right. Absolutely. The second question is, can you talk about the renovations that you undertook at some pretty marquee properties. What's the experience been how much increase in ARR or occupancy are you seeing that you can attribute to the renovations -- and if you can also tell us if you have other renovations planned through this year or how much of a visibility you have that will at least help us model it out.

And approximately, we have guided on that before, also approximately INR 1,000 crores in CapEx, which includes routine and new and also renovation or expansion. For example, we've done the Taj Mahal Palace in Colaba the chambers or we did the new restaurant Loya. We want to do an Italian out there. We just finished the 2 floors in Taj Palace. The rates have almost doubled versus 2 years ago. So post-renovation, not just of the renovated rooms but of the entire hotel. So it's pushed the entire hotel ahead. Same things we have noticed in London in terms of first comes displacement, but then comes the other monies. Mansingh is a very good example. Mansingh, despite 89% increase in rent and INR 250 crores in renovation, it actually makes more money on absolute amount now than it ever made in the -- when the rent was only 17.25%, that's Taj Mahal Delhi. And our chambers membership fees has increased 5x in the last 8 years and is going to double very soon. because of all the investment that has gone into the new chambers that we have built in the Western, the renovation in Lands End the renovation in Colaba, the ongoing renovation of the chambers in London. So all these things obviously create future income streams, which are very high-margin businesses also and give us a lot more stability, which is not dependent on any form of cyclicality.

Got it. Okay. That makes sense. Just 1 final question. About CapEx, you gave us a number for this year. Has that number changed for, let's say, the next 3 or 5 years -- or is still as going as per plan?

I think for, we can only talk about next year because we have more visibility on that. But broadly speaking, I think it will be in the similar zone as what we're going to do this year, so maybe plus percent plus/minus 5% to 10%. That's what we think we'll end up in cash flow, cash out for next year on CapEx. I think long term, it could move up a little bit in, let's say, 2, 3 years from or as the Bandstand project starts to scale up. So I think that's more literally. But I think the good thing is that our operating cash flows are far ahead of these numbers. So we will not have any problem of funding these capital expenditures. In fact, we -- cash to figure out how to spend and that's something which we can look at attractive opportunities on the inorganic side.

Thank you. Ladies and gentlemen, sorry.

So yes, thank you. I think we can close the call, but I'll let you go ahead first.

Thank you, ladies and gentlemen. That would be our last question for today. Puneet sir, would you like to proceed with any closing comments?

Yes. Well, thank you, everyone, for joining the conference call. Thank you for your questions. Thank you for your interest, and we look forward to interacting with all of you during the quarter and of course, definitely post announcement of our full year results. We remain optimistic about the outlook in the first 6 weeks of the fourth quarter give us definitely the optimism that is needed to say that we are on a good track of what you have witnessed in the last forgone 15 quarters. Thank you very much, everyone. Have a wonderful evening.

Thank you on behalf of the Indian Hotels Company Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.