Thomas Cook (India) Limited (500413) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Thomas Cook (India) Limited Q2 FY '26 Post Results Earnings Conference Call hosted by B&K Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. [ Purvi Zawar ] from B&K Securities. Thank you, and over to you, ma'am.

Thank you, Trisha. Good morning, everyone, and thank you for joining us on Thomas Cook (India) Limited 2Q FY '26 earnings conference call. From the company, we have with us Mr. Mahesh Iyer, Managing Director and CEO and the senior management team. We would like to begin the call with brief opening remarks from the management, following which we will have the forum open for an interactive Q&A session. I would now like to invite Mr. Mahesh Iyer to make the initial remarks. Thank you, and over to you, sir.

Thank you, Purvi. Good morning, everyone, and thank you for joining us as we discuss the Q2 FY '26 financial and operating performance. Before I begin, I would like to introduce my management team who is joining with me on the call today. I have with me in the room, Vishal Suri, Managing Director and CEO of SOTC Travel Limited; [indiscernible], Managing Director DEI; Vikram Lalvani, Managing Director, Sterling Holiday Resorts Limited; [indiscernible], Group CFO and President, [indiscernible]; Brijesh Modi, CFO at Thomas Cook (India) Limited; [indiscernible], who is the Financial Controller; and Urvashi Butani, Investor Relationships. Before we go deeper into discussing the results of the quarter, I would like to highlight the key factors impacting our border performance. The year so far has been a challenging one in the post-pandemic landscape, and Q2 continued to reflect this reality. Geopolitical flash points such as operations in [indiscernible] line, the global trade war and the escalations around H1B use as well as their evolving political situation in Nepal have all continued to shape global and regional risk sentiment. During the quarter, the trajectory of our recovery was impacted by further disruptions across North India. This had an announced effect on our domestic talent business and the leisure hospitality segment. That said, despite these external pressures, the resilience and well of our portfolio enabled us to maintain stability in our performance, demonstrating our ability to navigate volatility. Revenue from our operations stood at INR 20,738 million, up 3% Y-o-Y. For H1, we were at INR 44,818 million, a growth of 9%. Profit before tax after exceptional items maintained at 2211 million in H1 FY '26 versus 2187 million in H1 FY '25 and 1098 million in Q2 FY '26 versus 1096 million in Q2 FY '25. I would like to highlight here the onetime exceptional item that we had in the books this quarter, which will not fit itself going forward. I'd like to additionally pay some highlights that underscore our momentum and our strategic progress beyond the operating environment. This quarter, we had some encouraging resignations and innovations. Thomas Cook (India) Limited became the only Indian company to bring to honors at the prestigious [indiscernible] awards to 2025. We were at night for the best risk magnet solution and best investing solution, which really speaks to the strength and sophistication of our treasury management practices. In addition to this, we were also honored as the India Travel Awards 2025, reaffirming the trust and leadership of our brand and brand equity the we enjoyed in the industry. On the innovation front, in ForEx, we have taken some major step forward in terms of customer convenience. As a leader in the foreign exchange business, we have always been at the forefront of innovation, the product tech or being the first brand to sell ForEx online. Now I'm thrilled to share that comes to ForEx is the first and the only product provider to partner with India's largest u-commerce platform linked to deliver ForEx cards for tablets and students in 10 minutes. All through this, the customer does not need any [indiscernible] documentation or have to leave his home, both of which were paid points in the traditional ForEx purchase flow. And I will elaborate a little more on this in the later part of my conversation. We also launched TCPay, our new integrated mobile app that aims customers a simple one-stop digital solution for managing all their ForEx needs on both Android and Apple devices. And further to strengthen our payments ecosystem, we enable contactless cross-border payments through Google Pay, in partnership with Visa and Mastercard. This enhancement makes our borderless prepaid card and the study by ForEx card even more convenient for international travelers and students. On the travel front, we made progress on our VI initiative, which is the date assisted model called [ Daisy], which will now be at the forefront of our selling initiatives and together, both will enable better customer experience. I'll now go on to some of the segmental performance highlights. To begin with, on the financial services, to better understand our performance, I'd like to share a few statistics based on the RBI [indiscernible] data from January to August 2025. In the addressable segment of travel and education and maintenance of close relative, the NRS data showed a year-on-year decline of 5%. In comparison, Thomas Cook (India)'s corresponding YTD volumes remained flat. This demonstrates the strength of our product offering, our operational excellence, reach and distribution network. Our FX segment revenue for Q2 FY '26 stood at INR 845 million, marginally higher than the INR 839 million in Q2 FY '25, an increase of 1% Y-o-Y. This limited expansion was driven by softer demand in specific subsegment, particularly education-related ForEx. If we look at the [ LRS ] data for July and August compared to the same period last year, the degrowth is around 15%. And conversely, if you compare our performance, we actually prove marginally. Having said that, we have actually increased our turnover in the retail segment at 15%. This was led by a 13% increase in the holiday sales and our Education segment increased by 9% Y-o-Y. The performance of our airport segment is actually not comparable, which is included in this, which show a sharp decline because we are no longer present at Delhi Airport. As you will recall, we exited the Delhi Airport in May 2025. More importantly, our: PBIT for the quarter stood at INR 411 million, broadly in line with the INR 410 million that we delivered last year. EBIT margins remained steady and healthy at 49%, reflecting strong operational discipline and efficient cost management. In terms of our digital adoption, we were at the 22% mark. Our watch up engagement continue to see an upward trend and grew by an interest of 108%, a little bit on a smaller base. Our ad bookings were also up 25%. These reaffirm our efforts to enhance beta engagement on our ability to meet our customers' needs where they are. As we go into the second half of the year, our priorities remain clear to deepen digital adoption and improve customer experience. And with that in mind, we continue to expand this initiative to new levels. We launched TCPay all-in-one ForEx app designed for the first mobile tablet, as I mentioned earlier. We are also proud to be the first ForEx card provider in India to enable contactless cross-border payments achieved through our partnership with ruble and Visa. This milestone reflects our focus on delivering edition less global payments sent to our customers. And of course, our first [indiscernible] to deliver product cards right to the customer's door step within minutes. This unique initiative relates -- initiative places customer convenience at the forefront and further strengthens our [indiscernible] promise. This service is already live in Delhi, Mumbai and Bangalore, backed by [indiscernible] with the same time India rollout plans in the coming months. In October, we have already added Hyderabad, [indiscernible] and Chennai to the list. Moving on to the [indiscernible] and travel-related services segment for the second quarter of FY 2026, private segment revenue stood at [ 16891 billion ], representing a 6% increase Y-o-Y over the [ 15915 million ] in Q2 FY '25. This quarter was a mixed bag on the travel front, global travel landscape continue to navigate update of uncertainties marked by shifting look, geopolitical dynamics and domestic reasons, which are edited to in the beginning. If you compare our next numbers, our top line improved by 12% Y-o-Y to INR 36 675 million. Now had this quarter being divided a few of the external factors, we would have been closer to the 15% mark that we have been targeting. Let me give you a deeper insight into some of the segments and we present them in the form of B2B and B2C. All of the B2B businesses, which constitute 75% of our total segment revenue increased by 12% overall. The [ Federation Management ] business, which includes India and our overseas operations reported a 5% increase during the quarter. This growth came despite a 10% Y-o-Y decline in the India are business, which caters to India, Nepal and Sri Lanka. The India case was impacted by temporary headwinds, including protest in Nepal and softer demand from some of our key spot markets, partly due to the travel advisories linked in the India, Pakistan border conflict. On the international front, our overseas sales grew a [ 16% ] Y-o-Y. Our growth came with a shift in businesses as some of our high-volume retails contributed at a slightly lower part given the conditions and the uncertainty in key destinations. Traditionally, Southeast Asia and U.S.A. are amongst the strongest regions during this quarter. This year, however, performance across these markets was mixed and lower than actual potential. In the U.S., which is usually a strong quarter, was affected by a softening in travel sentiments and weaker bookings largely due to the ongoing geopolitical uncertainty. This led to more [indiscernible] and muted inborn traffic in the U.S. market. In contrast, the Southeast Asia continued to perform steadily, supported by consistent inbound volumes and the overall decisions of our business travel demand. That said, broader geographical below us did limit region's full growth potential particularly in some non-call markets. Additionally, the share of higher volume business seemed at a slightly lower margin, which impacted our EBIT contribution during the quarter. Moving on to the mines business. The segment improved marginally in this quarter, mainly alluding to the same reasons of weather adversities as the global travel being limited, several corporates had belay their [indiscernible] related events. While July and August were muted, we saw the [indiscernible] on September onwards. It's important to highlight that the changes introduced under GST 2.0 will translate into higher sales across various categories that we have witnessed in September and October, most specifically the [indiscernible], insurance, et cetera, which are large consumers in this segment. Our belief is that the broader impact of the changes coming from the GST will result in much more visible performance in the next 2 quarters. [indiscernible], the segment reported strong growth in Q2 FY '26 with revenue rising 27% Y-o-Y from the INR 317 million in Q2 FY '25 to INR 402 million. Air revenues saw a growth of 4%, whereas non-air transactions expanded by 20%. Hotel and car bookings saw a healthy traction increasing 23% and 9%, respectively. The company strengthened its corporate presence by adding 11 new accounts across fiber sectors and improved adoption of it self-booking tools that stands today at 59%. Our key focus area was digitalization through platforms like Travel One and [indiscernible] AI, which we infuse AI power corporate booking tool. Coming to our B2C portion of the business, which account for [ 25% ] of the total segment, recorded a 12% price in Q2 FY '26 despite the disruptions that we saw in Q1 and Q2. This does not reflect the full potential that we anticipated. The segment's performance was constrained as domestic travel was impacted by excessive rainfall and landslides across Northern India, leading to limited demand. In terms of some of the initiatives on the laser side. While we have mentioned this in our communication, I'd like to call out some of the important ones. We and have expanded China holiday portfolio. This leverages the resume direct air connectivity and driving travel demand and is aimed at new destination alongside classics such as Shanghai and Beijing. As [indiscernible], we are rating groups towards and customized [indiscernible] for leisure business and MICE travelers. We also restarted the [indiscernible] for the first time since COVID 2019. We also introduced special regional tours during festive, like [indiscernible], both on the domestic and outbound side. Now when I look at the overall PBIT for the segment, it was lower by 16% in the quarter to INR 651 million, with a margin of 4%. While we have been able to improve our top line, the margin has been lower than our expectation. During the quarter, given the tepid demand scenario, [indiscernible] marketing and sales initiatives. The numbers also reflect the impact of such cancellations that came in some of our businesses, not giving pricing pressures and lower than expected performance in some of our key growth markets for the quarter added to this decline in our ingest margins. To add a little color on the outlook for the leisure segment. We started the [indiscernible] at a relatively slower pace but to July and August. However, the segment saw a noticeable pickup from September onwards as conditions improve and travel demand beginning helping holidays became [indiscernible]. In the upcoming quarters, we expect higher activity on both B2C and B2B segments. India consumption engine is poised for a powerful revival in the second half, supported by tax rate, rate cuts and GST rationalization, which will help drive discretionary income. With this, I would like to hand over to Vikram, who will take you through the performance on the leisure hospitality side. Over to you, Vikram.

Thanks, Mahesh. Good morning, ladies and gentlemen. My name is Vikram Lalvani, I'm the Managing Director and CEO of Sterling Holiday Resorts Limited. I'm also joined by Mr. [indiscernible], who is the Chief Financial Officer of sterling. Thank you for joining us as we present the results for H1 FY '26 as well as for the second quarter. Despite quarter 2 be traditionally lean quarter for leisure hospitality due to seasonality factors and the headwinds space. I'm happy to inform that Sterling has yet delivered its 23rd consecutive profitable quarter. In line with our transformative trust and resort business, we have recorded a growth in resort revenue in Q2 of 13% and a RevPAR growth of 11% year-on-year against the backdrop primarily offer 28% Y-o-Y expansion in the reserve portfolio with a milestone record of having launched 7 results in Q2 FY '26. Selling financial position remains strong. Our cash reserves grew 51% year-on-year by another milestone of INR 1,000 million to INR 3,080 million so far. And we remain completely a debt-free company. This reflects the robust cash generation and as well as our reserves and our books while we are simultaneously also investing for future growth. Our H1 FY '26 was marked by a record Q1, but would temporary headwind impact that -- impacted Q2. Sterling delivered a stable performance with a revenue of INR 2,400 million approximately versus INR 2,450 million of last year, and an EBIT margin of 24.1% compared to 25.6% of last year in H1. The stand-alone EBITDA remained healthy and consistent at 32% for H1. Q2 was impacted primarily due to severe weather headwinds affecting almost 40% of our rooms. Coupled with the sun setting of membership acquisition in Q2 of last year, the associated fixed costs of the impacted rooms and the ramp-up cost of the new rooms impacted EBIT margins to a small extent. As a result, the revenue stood at 1,044 million with an EBIT margin of 16% for Q2. These are temporary effects and the underlying demand fundamentals still remain strong. As envisage with a record Q1 and a strong forward booking positions for H2. Our Sterling portfolio now has expanded to 56 destinations and 6 resorts. Hotels and retreats, it's over 3,400 rooms. Our pipeline continues to grow with an expected number of 10 resort destinations in H2 and another 15 in the quarters to follow totaling and approximately of over 4,500 rooms and over. Our expansion continues to be on an asset-light, capital-light model. A recent accredited industry survey of hospitality companies now ranked Sterling as ninth, up by 1 rank over last year on the number of locations, 12 up by 2 points over last year on the number of properties and 16 up 3 on the number of rooms. This satisfaction continues to be a defining strength of the Sterling brand. Our TripAdvisor ratings improved to 4.61% from 4.57% of last year, a testament to the exceptional experiences consistently delivered by our resort teams. In Q2, Sterling [indiscernible] was awarded the best resource star by hospitality horizon at the spa and wellness commit awards. In Q2, we've also done a lot on the asset management side, which I will take a minute to explain that as well. On the asset management side, we use Q2 to focus on capacity expansion by spending incrementally our own assets where possible and product enhancements in some of our key resort portfolios with an intent of building immediate future additional revenue streams. Sterling Puri is being expanded with 46 new suites up from current 121 loans in suites, with revenue contribution expected from Q3 FY '26 and having its full impact in -- from Q4 in FY '26, and this is our own asset as well. We have completed expansion of Sterling code value by another 32 suites from an existing 120 rooms and suites, which will have its full impact from H2 onwards. Sterling could make Sterling [ Nainital and Jurkat ] completed incremental plant upgradations in Q2, with impacts expected from Q3 FY '26 onwards, and hence, in H2. Sterling [indiscernible], we are also upgrading 51 rooms there. That's about 38% of the total inventory. On track for a mid-December completion before the peak holiday season and its expected impact in December last week and a full impact from Q4 FY '26 onwards. Under Sterling Sankar, our ESG initiative, we have completed investments and deployments of heat pumps across our key results, including Kudai Valley, [indiscernible], Masuri, Daging and Puri. This initiative is expected to reduce energy consumption by approximately 350,000 kilowatt annual while minimizing water wastage, reinforcing our commitment to sustainable and responsible tourism. These will also statute its impact on cost efficiencies going forward. With where the conditions behind us, where the headwinds behind us, be part and a 30% increase in [indiscernible] dates with 14 of our general results having reopened and new revenue streams from recently opened results in Q2 and H1 and contribution from our new resorts and upgraded rooms, our business is well positioned for our renewed growth momentum and a successful closure of FY '26, consistent with the performance of the previous years and previous other 22 quarters. Thank you so much. [indiscernible], you want to come in, please?

Yes. Good morning. This is [indiscernible], MD and CEO of DEI, warm even to all you bring and gentlemen, quickly to tell you a bit about our quarter. the quarter 2 financial year '26 ended up at INR 1,958 million as against quarter 3 to quarter 2 of 2025, which was INR 2,088 million, state of flattish quarter whilst historically, this has been our first quarter from a functional revenue perspective, the EBIT drop has been from around INR 65 million last year to INR 23 million this year on the same quarter-on-quarter, Half yearly from INR 4,132 million that we did in half 1 -- H1 '25. We've done INR 4,055 million in H1 '26. EBIT during the same time for the H1 has been fairly flat at INR 131 million in half year '25 as against INR 129 million this year in half year -- H1 '26. Predominantly, the key points that explains the drop of the top line would be UAE contributed to nearly 50% of the market share of the market that we do. And Q2 has been traditionally a low quarter due to both the peak summer and also just as understand it the geopolitical factors. [indiscernible] in the UAE has seen a dip of over 15% across the board. Over and above this, Malaysia and Singapore added to the row for us with some unplanned closures of value, which is more periodic and it is just won't be repeated again. [indiscernible] Malaysia and Singapore and the [indiscernible] were closed for either upgrade or for some other vertical issues that happened in Malaysia, but all of those have been resolved and they're back in action. More than 80% of our locations have gone live with our new solution in BC. There has been a double cost of running this BC through, and that has added to hurting our EBITDA. As normal, 80% of our sites are now on BC. More than 1,500 operators have started operating this across the globe. There is the expected tweaks and trainings that are being made as we go around to ensure that the peak period maximize and we are [ badly ] running this along with our existing software. So these 2 things have also added to our cost structures. On the brighter side of the horizon, we have large accounts that we have won during this quarter, which includes an Dubai, Ocean Park, [indiscernible] and Shanghai. All of these take about a quarter or 2 for stabilization, and we [indiscernible] a huge update at least is the take on our revenue performance in the coming subsequent quarters. We have -- to add to all of this, the last quarter or rather the third quarter for this year is a key quarter. I mean the whole team has been fully prepared. We anticipate a fairly robust quarter this year as we go on. That's all from my side.

Trisha, you can now open the floor for Q&A, please.

[Operator Instructions] The first question comes from the line of Anil Shah from Insightful Investments.

Yes. My question is on sterling holiday results. We have -- compared to last year, September '24 versus September '25, we had higher inventory rooms, obviously, because the number of resorts and number of rooms that we had an offer in September quarter of '24 versus '25, it's much higher in '25, almost 16% higher. We've talked about an ARR, which is up 10% from INR 5,400-odd out to about INR 5,900. And occupancy overall has remained constant at 49%. So if I look at your presentation last year in September '24, we talked about occupancy, then and we now speak on 49% occupancy on the expanded inventory base yet our revenue has declined. So that's the first question. I'm just not able to fan this -- in the meanwhile, in PBT, we've also mentioned that room revenues are up 22%. F&B is up 11%. Management contract revenue is up 80%. But overall, Sterling Holiday has seen a decline in revenue in Q2. So just not able to reconcile. That's the first question. The second question is that how EBIT has come down so substantially. Most of the weather conditions and the geopolitical, et cetera, actually hit utilization or occupancy, if I may say, which is any way [indiscernible]. So what are the kind of costs which has hurt us primarily because of weather conditions and because of whatever else that may be?

Okay. Thanks. This is Vikram here. Let me just explain this again and in detail. The statement I had made was that we had about 40% of our rooms impacted even on an expanded base this year in quarter 2 because our hotels in [indiscernible], where we have a very strong presence was in a large portion of the months and any which ways is being a lean season was typically cut off from traffic, Masuri, Menital, Corbet, Manali, Cofre, et cetera, right? Now these had -- that's number one. Number two is, hence, even on an expanded base of 40% of our rooms were out. In fact, the growth that we got in the resort revenue actually also speaks about the resilience in Sterling. It came about only with 50% to 60% of its remaining inventory. So imagine if the fact of the matter is that we do not have these very strong headwinds, I think we would have been able to record a far higher and steady. In fact, a far higher growth in the resort income, number one. Number two is the fact that as we've been mentioning, even in the past couple of quarters, we have been ramping down and we eventually sunset the membership business in Q2 of last year. So therefore, the revenues that we had from the membership income, including its subscription as a result, which was there until Q2 of last year is not there this year. Now having said that, we would have been able to substitute this gap very we had. We've been able to operate the remaining 30% of the loans. So to that extent, the gap has been there in Q2, which should not be there from Q3 onwards because then that would be a like-to-like compared. So that is why the -- let me just finish. There has been a slight change in the revenue line. Now in the -- on the cost line, when many of our resorts are typically paced out, we still incur fixed costs in those results. While I may not be able to move the debt in there, I still carry fixed costs without earning revenue there on like salaries, wages mid-teens, basic electricity and the costs that we will have to carry. So that's number one. Number two is even when we use this opportunity to ramp up another 7 resorts, which was a milestone we have done before. In the month of September, which impacted last portion of we actually leverage a lot of the resources from these 40% of the rooms into actually opening these new results. So it's a question of how we leverage the resources internally when we are not able to actually utilize them in their current destinations because of the fact that we are not able to move the customers. So this is a onetime ramp-up costs [indiscernible] data, especially when we are ramping up. Now this -- all the revenue streams should start coming in from H2 onwards, and it's already started. Having said that, despite the issue of headwinds with 40% inventory as well as a onetime substitution that could not happen with the drop in the membership income because we curtailed the H1 has still remained stable because of the Q1 numbers being buoyant. And we are very confident that the H2 numbers will actually -- first part so part any kind of a negative trend that has happened in Q2. Having also said that, we've had 22 quarters of profitable growth. And this quarter of quarter 2 has been impacted with both these parameters as well as the fact that we've taken ramps up new inventory as well as upgraded our current results, we use this opportunity to do that to better ask our teams in H2. But still, our H1 actually still remained stable.

So just to clarify. Maybe my understanding is not correct out here. I repeat, when we say we have to take off 40% of the rooms just not available, do we take them off the denominator when we talk about occupancy?

No, we don't take them off our denominator. So thanks to occupancy, so if I say is constant. In last year, September '24, your occupancy was 49%. It's 49% gain on the denominator, okay, which is much larger. So in terms of number of actual rules that have been used and for which we have built is higher. Is that correct?

That's fair. That's fair. Exactly the question then, then why -- the only thing that it's so far that I can get an explanation for you is that members were lower compared to last year. So if you could quantify that number? Because otherwise, how could revenue be lower? I'm not still able to understand in terms of revenue. I can understand in terms of cost to some degree, not completely yet. But how revenue can be lower in Q2 versus last year's Q2?

So let me tell you. Now when we're saying this 40% of the inventory, there are 2 kinds of inventories that we have, right? One inventory, and this is there across the board in the hospitality industry as well. One, our inventory is the inventory, which is an impact of P&L, which is known as on lease or revenue share in inventory. And the second is a partnered inventory or a management contract inventory, right? So while the occupancies might have gone up in a management contract what the amount that we want to get reflected in our P&L is only a certain portion of that incremental because we only get the commission comes from there. So what happens is, so even whereas the 40% that has gone, almost 50% of that is our own leasing revenues. So we have to carry those costs. [indiscernible] a large hotel, Cofre is a large hotel. Manali is a large hotel, [indiscernible] is a large hotel. So they were all reflecting in our P&L. So therefore, on the flip side, where we could manage to leverage the South and the East or the West, not necessarily everything is our own inventory as well, number one. Number two, yes, we did have a sale of approximately about 400 or 500 membership units last year, which eventually is not bad this year and the associated subscription amount of that. Now if we've been able to leverage those on the impact of the own lease revenue share rooms, which was virtually shut down in Q2, including [indiscernible] results, this would have actually been easily substituted. Therefore, actually, our growth in results would have actually been over 20%, 25%, which is a model that we are actually headed towards. That's the answer.

I think at least again, just to summarize, basically, it was our own resorts where we get 100% of the revenues, okay, which was sort of 15 results, more of those were unfortunately not available for tourists because of weather conditions. And hence, we got more hit in this Q2. Is that condescending correct? And the second part is, obviously, the fact that we had about 400 or 500 rule booked by members in Q2 last year for which we got revenue and we got subscription, which we did not get in this Q2 of this year.

But absolutely. We would have which we would have been able to substitute that and actually grow further.

So that were absolutely, right? But having said that, even when we entered October, now we are in the mid of November, those headwinds are behind us now, right? And this is us sunset the membership story or an acquisition in Q2 of last year. So even when you compare Q3, that's not going to have an impact going forward.

Right. And last thing, sir, start-up or setup costs that you really have to go through initially. So we had 7 new resorts which started business, they take time to ramp up maybe another couple of quarters. But in this quarter, when you -- when we start off these fees, what would be an approximate cost per result that you would have debited in your P&L in this particular quarter?

Okay. Let me just answer that in 2 parts. Now whenever we open a hotel result, while we have a particular date from when the guests can come in and we start with revenue. Our cost typically kicks in at least about 1.5 months or 2 months or to the opening. So in this case, like wise, because we have to put the manning, manpower, we have to get the supplies, finish the product et cetera. So actually, our cost -- so there was a conscious call that we have taken that despite the quarter being a little tough one, we actually rather go ahead and launch of open new hotels I take that cost from July, August onwards, when we open these hotels in September because it will have a positive impact in H2. That's number one. 30, 60 days prior to opening...

[Operator Instructions] The next question comes from the line of Deepak from Unifi Capital.

Vikram, first question is to you. So we understand that this was a tough quarter because of seasonality. But are we losing out to competition? Or is there incremental supply of rooms coming in our existing geographies that could have impacted demand? That is one. And your comments on the cost buildup that happened this quarter, if you can quantify that. And the -- and whether it will recur or not in the future. And with the H2, with regards to H2, you can provide an outlook on revenue growth that you've seen in October and forward looking that you have and the margins in put this segment.

Thanks, Deepak. There are a lot of questions. So let me try to answer one by one in a very short average manner. I think the first question is on the expansion and demand supply on competition. Now that was mentioned, that obviously, as and when we keep incrementally adding rooms, our revenues still tends to go up. Now we are present predominantly in use where we think we have a far more competitive advantage when compared to anyone else. And we are also moving towards the corporate setup. For example, if we say [indiscernible], we are far ahead of our competition in that sense. How we actually rate that, actually, we gauge it on the basis of the kind of market share that we have through some of the online channels versus that of the others. So we're kind of ahead of our competition on that front and we are actually expanding into destinations also that are where we get the first-mover advantage like [indiscernible] the first new advantage. That's answer question number one. The question number 2 was, sorry, what was that?

Regarding the cost that we've incurred in upgrading the properties that might not picture going forward. So [indiscernible] first question is on the outlook, yes.

Yes. On the asset financement side, we always use this opportunity to spread out our assets as well as constantly upgrade because with the transformation of the business model that has happened, you have to continue to remain competitive as was your first question. So our cost of typical and incremental room is approximately 12 to 13 [ grams ]. And that is why we rather focus on expanding and sweating our existing assets, so it has a stronger impact of the P&L going forward, which is what we've done. Number two, yes, we will continue to expand even on an asset-light model. When I keep saying asset light, it's a combination of asset-light and a little bit of revenue shares and leases. So we will continue to expand on an asset-light model to leverage the network strength that we bring in. So that's point number two. Point number three, if you see H2 has actually opened much stronger. As I said, that the headwinds of -- especially the weather is far behind us. And most of these get creation has actually already started reopening right from [indiscernible] time. So I would say that H2 will be strong. The kind of growth that we are getting in the resort business, we could possibly hold those growth and maybe how the incremental rooms people will add on new revenue stream in H2, which starts from Q3 onwards. So there is no -- in fact, Q3 is looking good.

Got it. Got it. If you can just quantify the quarter that we incurred, sir, in this quarter and with the growth that you've spoken about. Will the margins come back to the holder level that the [indiscernible]?