Kamat Hotels (I) Limited (KAMATHOTEL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Kamath Hotels India Limited Q1 FY2027 Earnings Conference Call, hosted by Valorim Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purwangi Jain from Valoram Advisors. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Purwangi Jain from Valoram Advisors. We represent the investor relations of Kamath Hotels, India Limited. On behalf of the company and Valoram Advisors, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year, 2027. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. I would now like to introduce you to the management team joining us on today's call. We have with us Mr. Vishal Vithalkaman, Executive Director, Mr. Milind Wadekar, Chief Financial Officer, And Mr. Nikhil Singh, Company Secretary and Compliance Officer. Without any further delay, I request Mr. Vishal Kamath to start with his opening remarks. Thank you and over to you, sir.

Thank you, Purwangi. Namaskar, everyone, and welcome to the earnings call to discuss the results of the first quarter of the financial year 2027. So, with that, I would like to... Firstly, before we begin, I would like to welcome our new Chief Finance Officer, Mr. Million Wadekar, who has joined us this quarter. He has an extensive experience of more than 30 years in finance, and in that particularly 20-plus years in the hospitality field, right from the Leela Group to the Chalet Hotels, where he was the CFO and EVP last. He was EVP Finance and Investor Relations at Ventim Hospitality. We are very happy that we have a person of his caliber and ethos joining our group, so we are very, very excited on behalf of Dr. Kamath, myself, and our entire board and team. We have already welcomed him, so I am sure that he will add value to us all with his rich experience. I am also pleased to share that Kamath Hotels has delivered a very exceptional start to the financial year, supported by a robust growth in the top line and also a robust growth in our EBITDA with meaningful margins and meaningful expansion. In Q1 to FY27, consolidated revenue grew over 10% to 91 crores. This also, which Mr. Millian will share in more detail, why it is even better than actually what it looks like when his turn comes. Driven by, again, efficiency, and I must appreciate our team for their pricing discipline and their operational efficiency, which translated into a phenomenal improvement in our EBITDA, rising to 36% high from 25 crores from the previous quarter same year. So our EBITDA margins have also expanded towards the 27% compared to earlier years, same Q1, 22%. So, that is a good news for us, and it's a good sign of the times to go ahead. This has, of course, strengthened the balance sheet and helped us, while we're doing this, reduce our loans further. Though that is not an issue, our target, which was and is to be absolutely zero, and we are on the target to make net zero and eventually zero on our balance sheet towards that. So, looking ahead to the rest of the FY27, there is a clear momentum, there is a clear pathway in front, and in this, Mr. Milind Wadaker will add to our current vision, current growth plan. So, we look at even a faster and a better and a more robust growth in the coming time ahead. So, while we have a priority to leverage our brands across India and improve our performances of our existing hotel, so we do intend to do that, keeping in line with our ethos of being friendly, eco-friendly, adding value to society also while we are growing for ourselves. Turning to the industry, overall, the industry has been resilient. Generally, our colleagues in the industry have shown very good results. We are happy that we have done better than many of our colleagues. It's always a healthy competition. But the sector is booming. The sector is growing well. In fact, a lot of... Growth is also coming in from alternative hospitality, such as health economy, like now we recently have one viral clip of a gentleman who has come to India for knee surgery replacement. Now then they come and they stay for long tenures. They stay initially in the hospital. After that, they move to hotels where they are supported. We have people like that staying in Orchid who stay, who get treatment in Leelavati or Hinduja or, you know, in other such hospitals. So that's also a very good plus point that we have. There is also a rising travel aspiration. This global turmoil has been both a bane for our industry and a boon in terms of the LPG crisis and all which many people asked last time and overall have been discussing. But that small problem turned out to be a big gain for the nation because tourism boomed. People did not travel outside India. People went again to remote and popular local destinations in tourism. Even city tourism also grew. People traveling within India because, on one hand, because of global fuel shortages, airline calculations were rampant. Not only in the Gulf where it was due to war, but it is also in Southeast Asia where certain countries could not meet their requirement of fuel for aviation. And hence, many had curtailed, which many of you must have read in the newspaper. On top of that, Europe is... There's a heat wave, there's a migration crisis, and there's a hyperinflation due to the Ukraine war continuing over so many years. So the cost of living and the cost of enjoying has shot up so much that most Indians prefer to go to other locations, and those other locations happen to be within their own country. America, on the other hand, with Donald Trump behaving exactly what the world needs, because of which, you know, American overall popularity is decreasing, And hence, people have not gone for tourism as much to America, visa issues being another additional issue. Hence, again, Who has benefited is our country and our vicinity. Thank you. and tourism in even remote places like Manali was excellent. So, we have benefited from all this, and against this backdrop, our focus on this quarter was on three priorities, which was strengthening our performance, scaling up on our new properties, which further Mr. Millen will take, and enhancing our guest experience through a lot of technological... Things which we have been doing. Some which the guest experiences, some which the guest does not experience, as in he experiences, but he does not know. A lot of, in fact, what improvement in services are there are from technology where it affects the guest, but the guest does not realize it. And I think that's a big credit to our IT team. So, we've made very good progress on our various properties. We've ramped up our operations in Orkid, Panjgani, which had opened last year in September, October. Orchid Rishikesh, Orchid Rishivan in Rishikesh, which has also been doing good and will further grow. Then Erabai Orchid Hyderabad in high-tech city, that last year did not do so well because it was new. This year it is doing much better and will further ramp up. And our latest baby who has joined the family is Iravai Orkin Bhavnagar, which has just opened, but has got a very good response. It is one of the best banqueting halls in Bhavnagar in terms of size, in terms of grandeur, and our food, which has been greatly appreciated. So we've been already getting a lot of traction from the social side, especially for weddings and groups. And once now the season of Bhavanagar will start post-monsoon, where a lot of NRIs and others come back to Bhavanagar and Saurashtra and others. So we will have that advantage to us. Apart from that, Dholera has been doing exceedingly well thanks to Tata's plant, thanks to other announced silicon and chips. Thanks for manufacturing, thanks to other industries. So that effect is going to come tremendously on Bhavnagar. And flights also have improved. Navi Mumbai to Bhavnagar flights are there. Flights to other places also come. So we are very buoyant that once Bhavnagar stabilizes by next year particularly, its full year will add just as these others have added. And that same cycle will continue and accordingly the growth will be there. So that's also something really very good. We also have expansion which we have signed our second property in Dwarka. This is the orchid Dwarka Dish Dwarka in the 63 room hotel and which should be starting operations by latest December this year. So I think that will further strengthen our presence both in the pilgrimage market and in the overall Gujarat market. Previously, we also guided that our hotels are there coming up in Gwalior, Dehradun, Nashik, Rishikesh, and Manvi. So our Gwalior hotel also should start by Diwali. We are very buoyant. The owners are doing a good job or a great job rather in terms of expediting and finishing. So we should look at Gwalior opening this year. Dehradun is delayed. Nashik is going on, the target is to open before the kump, the main kump, Rishikesh, our expansion, which is the hotel next to us, the second hotel that we have taken, work is going on, that will go on as per expected, and also Kachmanvi also is on track, and that is going on as expected. Apart from this, there are some others in pipeline, but as we always sell on the call. Such time as it is not signed, we do not talk about speculation. We only discuss and talk about what is signed so that there is a clear outline towards the future growth for all of us. So, as we have expanded our portfolio, primarily under Orkid brand, we are also positioned to scale our existing infrastructure, our IT backbone, our distribution through brand.com, and our loyalty program. Our brand.com, which is orkidhotel.com, and irahotel.com, basically, have been improving in its direct booking tractions due to various benefits being given additionally to our customers. So, that also has been showing very good traction in general. So that's something we are going to further work on. This integrated ecosystem which we have created is also helping us to drive the occupancy and also then the ARR. The occupancies of this quarter have been excellent and that detailing more Mr. Wadaker will give. So, with that, I think... I would be more happy to answer the questions which many of my fellow participants and colleagues will have. Thank you. Namaskar. Thank you, sir.

Good afternoon, ladies and gentlemen. Before moving to our financial performance, I would like to express my sincere gratitude to the board of directors, promoters, and the leadership of Kamath Hotels for their continued trust and confidence. I truly believe Kamath Hotels He's on a turnaround journey. The foundations the company has led over the years The Indian hospitality sector is witnessing a robust recovery driven by rising Connectivity, air as well as road, and higher discretionary spending. According to industry estimates, India's domestic tourism is expected to grow around with a stagger of around 10 to 12 percent over the next 3-4 years, supported by growth in business travel. Three cities are emerging as key growth drivers where we are expanding, contributing to over 60% of new branded hotel supply in the coming years. Please to share that Kamath Hotels delivered a stellar operating performance in Q1 FY27. Consolidated revenue for the quarter stood at 91 crore, a growth of 10% over 83 crores in Q1 FY26. Importantly, our focus on driving operating leverage is translated into 36% growth in consolidated EBITDA to 25 crores. If you look at flow through for the quarter, what is flow through is incremental EBITDA as a percentage of incremental revenue. It was more than 75% despite four new properties. Q1, FY27. I mean, the properties were added in last two, three quarters, but properties were not there in Q1, FY26, and these properties are scaling up, so there is some higher operating cost. In spite of that, our flow through for the quarter is 75%. Thank you. During ERA Mumbai which closed on 31st March 2026 and four new hotels which were added for financials in this quarter, the revenue grew by 17% year-on-year and EBITDA grew by 21%. The new properties, Orchid Panchgani, Rishikesh, ERA by Orchid, Hyderabad and Bhavnagar are Scaling up and are expected to contribute meaningfully. In the coming quarters, our big box hotels in Mumbai and Pune, which are business hotels, delivered a strong growth. Orchid Mumbai revenue grew 35% year on year, with EBITDA up 50% year on year. Orchid Pune revenue grew 27% year on year, and we are rationalizing cost here to improve margins further. More hotels are expected to generate cash to fund our Now, if you look at RevPar at portfolio level, RevPar for our two brands, that is Orchid and Lotus, grew 18 and 17 percent respectively in quarter one, FY27. This is height in RevPar growth, which is much higher than hospitality industry, which they have shown in the current quarter. Investor presentation, you will see negative growth for ERABAYA ORCID brand, but excluding ERABAYA ORCID portfolio ARR was around 4069, which is plattish as compared to previous year, and REVPAR was 2466, which is around 3% growth. Favorable tailwinds in domestic business and leisure market helped us to ramp up occupancy and repair across our portfolio. These combined with strong operating KPIs and stringent cost control drove a 126% growth impact to 9.7 crores against 4.3 crores last year. Our balance sheet is now very comfortable, our leverages are comfortable, the consolidated date. Last quarter is 105 crores with cash, cash equivalent fixed deposits of Rs 65 crores resulting in net debt of Rs 38 crores. Now I conclude my opening remarks.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Rohan Joshi, an individual investor. Please go ahead.

Hi, sir. Am I audible?

Yes, namaskar.

Yes, hi, sir. So, my question was just about the update on the properties that are going to be opened this quarter. So, are they according to the plan or have the LPG availability construction and supply shortages have affected the timeline for this year?

No, actually, we are talking about two hotels, like one is the Orchid Hotel Dwarka, which should open in this coming December, November-December. It is not in this quarter, but it will open in November-December, but we see its outlay. And similarly, Gwalior, we see it as end October, November. So it's not in this quarter, but in the coming quarter. And it has got, Dwarka has been opened faster than, or on track rather, because the owner has done accordingly. And in Gwalior, it has got, it is opening now, but it could have opened a little earlier. But then based on whatever the owner, because the owner has to do the capex, the owner has to do the various certain things. So, we are dependent on the owner, and that is why, basically, we could get delayed at times. But what is important is that even if it was delayed by now, whatever, few months, important is that now we see it opening, and we see its horizon on the, we see it opening on the horizon. So, that is more important. I mean, like Deiradoon should have opened a long time back, at least a year back. Candidly, I can say that at least, if I think, but it's not our property, unfortunately, and we have to depend on our owners. So whatever based on that we do, we do. Again, Mandvi, the owners are very proactive and on the ball. So they are doing an excellent job. Rishikesh is going on as per currently the progress. So we know about that. Nashik has been a little delayed due to certain technical points, which is beyond the scope of the owner, considering certain things which are there. So we are understanding over there. So that's basically the outlay.

So, Rowan, if your question is supplied... and challenges on account of war. Has that impacted? The answer is no. I mean, these challenges are behind us now. I mean, the property is what we are expected to open. There could be some delays. I mean. One property, there are delays from owners, but otherwise, we are on time.

Okay, sir. Thank you. Thank you so much, sir. And, sir, my second question was about the occupancy rate. So, it has improved in Q1. The trajectory of the occupancy rate going forward in Q2, Q3, can give me just a rough estimate, the ballpark idea.

See, typically, hospitality industry, quarter one and quarter two are soft, and business picks up. It is business travel as well as leisure in second half of the year, right? So, quarter one occupancy growth has shown good trend, and we expect this trend to continue. For the remaining three quarters. Typically, business hotels cross more than 75-80% occupancy. Leisure properties are seasonal depending on the micro market occupancy differs, but will show strong growth. Okay, okay. Thank you, sir. That was from Ari.

Our next question comes from the line of Gunit Singh with Counter-Cyclical Investments. Please go ahead.

And congratulations on a great set of numbers. And I would also like to congratulate you for bringing in someone with the experience of our new CFO into the organization. So that shows the intent of the company. So I actually have a question for the for our new CFO. So sir, is there any strategic pivot or something different that What do you plan to do or how you plan to steer the company forward? I would like to hear your thoughts on that.

So, we are evaluating various growth options. I mean, I don't want to say anything now. I mean, but yes, we are thinking or rather evaluating various growth options. And our balance sheet. Leverages are very comfortable. We are at 38-40 crore rupees, net debt position. Even if I take three times multiple of my forward EBITDA, we can raise debt comfortably up to 300 crore rupees on the balance sheet.

Got it. So, previously, we have been more towards leased and managed properties on an asset-light model. So, like you mentioned in the previous remark, that our... The profits from Pune and Mumbai, they might fund our expansions or internal expansions. So, will we be looking at our own self-owned hotels in the future? Is that something that we would be shifting towards?

So, we will look at combination of both. I mean, asset-light model where we take properties on lease or revenue share. We'll look at our own hotels as well. I mean, we may look at some brownfield hotels which can be refurbished and put into operations immediately, or we'll look at some land parcels in deep market and develop our own hotels. Both these, our business hotels, are expected to grow. It will generate sufficient cash to fund our expansion plans.

Got it. And, sir, the hotels which are opened before FY26, are there any hotels which are loss-making? And the hotels which were opened in FY26, I mean, are most of them currently loss-making? I want to understand, like, we stopped our lease with Eera Mumbai, which wasn't profitable for us. So, are we planning something for the hotel which has lost making an open before FY26, something similar like that?

Or what is the way forward? standard which we've been before also you must have heard this with is that when we open a new hotel, we book all the expenses of that opening in the P&L of that hotel of that year. So but naturally, it looks as a loss. But eventually, that loss is in the coming year does not remain a loss. Now, for example, Bhavnagar. Bhavnagar on its P&L today, on its standalone P&L, is a loss. Why? Because we have travel expenses, we have mobilization expenses, certain things which are not in the owner's scope. Proprietary, certain softwares and all which we have, which are not, which are our cost. So those are, but naturally in the initial, there is going to be a P&L loss on that front. But eventually afterwards, once the hotel stabilizes, as in after the first one year, they are in profit. This is a similar case of any, whether it's Sambhaji Nagar, whether it's whatever. Those hotels, whichever have started first year, they always have, because very rarely can a hotel do that much, Unless it's a large hotel, or there is an exception like in the case of Ayodhya, it started off at first year, it was in profit, even though there also there was mobilization expenses. So that is one thing. That said, I think Mr. Bilid can take it forward.

See, any hotel, whether owned or taken on lease, I mean, it normally takes two to three years for them to scale up and stabilize, right? So, first year of operation, there could be losses at EBITDA level, but you have to look at long-term trade, and our hotels are scaling up, all hotels are scaling up. If we see any loss at operating level, we take corrective action there and there and try to control our cost or improve our...

So, I mean, my question was regarding hotels opened before FY26. So, FY25, FY24. Are any of them still loss-making?

No, no, not really. Not really. I mean, all are making profit after late charges.

That's great. That's great. So, my final question would be regarding the ARR for Orchid Hotels. So, are we taking any initiatives or do we plan to take any price hikes this year? What are your thoughts on that?

It would be judged by Revapath, that is revenue per available. Where we think there will be resistance to further improvement in ARR, we go through occupancy route. Now, as I have already covered in my opening remarks, my Mumbai property occupancy went up to 91% and Revpar went up to almost 40%. That point of time, that micro market was supporting us on occupancy level. So we decided to keep rates flat and sell more and more rooms, right? In Pune, we were driving both. So defense case to case and defense on the particular month, depending on how is the demand for that hotel in that micro market. So there is no thumb rule per se. But yes, We are looking at both.

Thank you very much, and I wish you all the best.

This comes from the line of Pranav Naik, an individual investor. Please go ahead.

The question stands on the EBITDA margins. So EBITDA margins, as far as I know, is approximately 27%. So what actually held this margin was it?

Long term, I mean, our target is to take EBITDA margins up to 30%, and it comes from both, I mean, higher revenue as well as cost. So we are looking at... To control or to rationalize our costs, one of it is... I think this is not one-off EBITDA margin. This will remain stable or improved further.

Okay, sir. So, these 30% EBITDA margin, when will you see those colors? When will you be able to see...

Not immediately, I mean, we have to walk that path, but our internal target is to two years, two to three years.

Okay, sir. Thank you. And another question that I have is on the...

Pranav, please understand, I mean, as we scale up, I mean, my revenue will also go up, right? So I have to hit that 30% margin on higher revenue. Right.

My environment, I have a question. So basically, looking at the proper mix, like corporate leads, mice. You know, change meaningfully, like... Targeting as a company in this product mix, like, which exactly product mix?

Many business drivers, when economy grows, the business travel grows, right? Now, with rising aspiration, leisure travel, exponential travel is increasing. My business is improving. So all these factors will drive business for hospitality. And we have seen this trend last Three, four years. The trend is expected to continue. I mean, we feel India is structurally long-term uptrend as far as hospitality is concerned.

So that's it from my side.

Our next question is from the line of Mahavish Jayant, an individual investor. Please go ahead.

Good afternoon. So, I just wanted to know, like, with the company's debt position improving substantially, what are the current priorities with respect to the surplus cash, like new properties or further deleveraging or shareholder returns?

We are a 431 company and we would like to grow. We will judiciously deploy this capital for growth, whether it is managed properties or our own properties. So, we will look at growth options.

The expected timeline for the newer properties to each mature occupancy rate and profitability.

Two, three years, new property matches, and it is EBITDA positive.

Our next question is from the line of Akshay Saabla, an individual investor. Please go ahead. Your line has been unmuted. You may proceed with your question.

So, I had two questions. First was regarding the current hotel pipeline that we have. Like, what properties, you know, we have already announced, and what are we expecting further additions during FY27?

We are looking at around 400 keys addition, maybe next one year or 15 months from now, that is Gwalior, Dehradun, Dwarka, Nashik, Rishikesh, and Mandvikaj. So I'm saying 12 to 15 months from now. There will be some delays. I'll hear it also.

And second thing I wanted to know is how do you see the balance between tier 1 and tier 2 markets or tier 3 markets, and how is the company looking to expand over the next few years in these markets?

So there is business for all segments in gateway cities, in tier 1, tier 2, leisure destinations, everywhere. I mean, there are new growth drivers coming up like Bhavnagar. Now with Tolera, there is good demand is picking up in that market. So as we see more investment in manufacturing, these new growth centers will come up. And ledger travel is booming.

Tier 1 markets particularly have a natural entry barrier in terms of cost. So you will not find a huge amount of inventory coming in into any tier 1 city. The tier 2, tier 3 is basically generally where the growth also is, but that's also that in the long run, those markets, they have to have like Bhumneshwar for example. It used to be, you can call it tier 2 city, but Bhumneshwar initially had limited hotels, but had limited business. Today, Bhumneshwar as a city has grown where there is a lot of business and a lot of hotels. So, the market, though it expanded, it also absorbed. So, in the same way, we have basically to see city to city. Bhavnagar, we are very buoyant. Why? Because Bhavnagar has a growth story apart from tourism in the six months where we have NRI movement and weddings and other things. There is also a base of industry. So, we need to balance industry. Tourism and transient movement all put together, which we see in the various markets that particularly, and this is there right now when we're looking at our Puri Hotel, our Puri project. Puri also has this kind of, you know, very good mix of movement. So that's how every market needs to be seen. So we can't just go blanket in terms of any tier 2 or any tier 3 city. That city has to have a base, and that's what we look at.

Akshay, now if you look at Pune market, okay, our hotel is upscale, can be upgraded to, say, upper upscale. Now, there is no new announced hotel project in Pune for upper upscale, okay, and you need at least five years to start a new hotel. Now, Pune demand is growing, Pune commercial office absorption is growing. There is great potential for that property to grow in terms of rates, in terms of occupancy, Thank you.

Thank you so much.

Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. Our next question comes from the line of Ronak Agarwal with I Thought PMS. Please go ahead.

Yeah, am I audible, sir? Yes, sir. Yeah, thanks for the opportunity. I'm very new to the hospitality industry. So, can you help me understand about the ramp-up of the new hospital? So, how much time does it take for a brand-new hospital to reach to the optimum occupancy level? And what's the optimum occupancy level of a mature hospital?

Being a hotel, ideally, whether it's a hospital or a hotel, your ideal occupancy is 100%, but the truth is that 100% doesn't happen, whether it's a hotel or a hospital. In both cases, the ideal occupancy is 100%, but that does not happen. Secondly, the ideal ARR does not exist, because each time you achieve a target, you have to break that target. If tomorrow, a hotel achieves the target of, say, its budget was, say, 7,000, based on market study, based on competition analysis, based on the product that it has been made into, and let's say, for hypothetically, say, the market is at 7,000, that's where occupancy comes in, and if your occupancy reaches a certain threshold, Then the owner or the general manager will say, wait, wait, wait, since my threshold of occupancy has reached a certain level, why should I stick to 7,000? I will take this up to 8,000 or 9,000 or 8,500. Whatever it is, I will take it upwards. Why? Because after a point, I don't want a full house. I want also ARR. So it's a dynamic pricing, dynamic market based on your neighbors, based on your own product, based on what exactly is happening in general, and what is the occupancy. Just by you putting a 10,000 and if your occupancy is going to be 20%, that also does not make sense. So there is nothing like an ideal, but in general, if you are asking as a thumb rule, Thumrul workings are normally 60-65%, which again in a city hotel, Mr. Millin, you must have heard saying for a city hotel, generally you should have 75-80% occupancy. So, but Thumrul is 60-65%, and ADR is a subject of the market, average of days.

Right. So, what's the kind of occupancy, let's say you're starting a new hotel, so what's the kind of occupancy that you will have in your first year, second year, and going forward?

Again, this is a subjective question.

I think Mr. Bilini would like to take this question. See, again, it depends in the micro market where that hotel is. Now, city business hotel, gateway cities, you will see occupancy going up to 75%. Okay. I mean, it is almost full on Monday to Friday, and occupancy drops on weekend. If it is leisure property, occupancy is high on weekends, and you fill rooms with mice, that is meetings, incentive conferences, during weekdays. So everything depends on the micro market where you are in, the number of hotels or number of rooms available in that micro market, and race. You will find Nonawla or Mahabaleshwar. Hotels are full on weekends, right, and rates very high, but rates drop substantially.

So, what's the kind of capex are we doing in the new hotels which we are going to open?

There is capex, where it's required, upgradation, it is being done. Some upgradations are part of the budget, so they are part of the revenue that is generated and expense out of that, and that is there, or some are basically major capex, which may be outside the purview of the revenue expenditure and may come under capital expenditure. So that is a case-to-case basis, sir. Thank you. Let us restrict to about a limited number of questions so we can take our next person also and then once someone answers us, you can please come back in line. Sure, sir. Thanks for the opportunity.

Our next question is from the line of Gunit Singh with Counter-Cyclical Investments. Please go ahead.

Thank you for the follow-up. So, historically, we used to give some guidance for the coming year. So, I would like to ask the management, I mean, what kind of a top line or EBITDA are we? If you have some range in mind.

We don't want to give any guidance as such, but what we can tell you is the tailwinds or growth drivers are very strong, and we are expected to show growth.

Got it. In Q1, the domestic travel was higher because Indian tourists were not traveling to the Middle East, which used to account for, I think, 20-25% of outbound international travel for Indians. So, I mean, with... Tailwind, Tailwind. I'll take on that.

But generally, with high disposable income and improved connectivity, the leisure travel is increasing year-on-year basis. So, I mean, we feel the trend will continue.

Got it. So, for our hotels, do we have a breakdown of leisure versus business?

So, normally, these are two distinct hotels. I mean, business hotels. We don't get ledger business. If you look at our Mumbai or Pune, mostly it is business travel. There is no ledger. And there are identified, I mean, Goa, it's ledger, right? Rishikesh, it will be ledger.

Quote it. Quote it, sir. Wish you all the best.

Next question comes from the line of Suhaag Patel, an individual investor. Please go ahead. Suhaag, your line has been unmuted. You may proceed with your question.

My question is regarding, like, is companies seeing enough demand to support the planned increase in room inventory, and how is it going to affect our average room rate?

So as I did not get your question.

My question is regarding, is the company seeing enough demand to support the plan increase in room inventory, and how is it going to affect our average room rent?

In the cities where we operate, right? And when we look at new hotel project, we look at demand supply dynamics of that city or the expected growth in demand in next few years. So our new capacity, I mean, we are not adding any hotel in Mumbai per se today, right? Or in Pune, which will cannibalize my existing business. We are looking at new cities where we don't have presence. So I don't think that will impact ARR, and when we look at New Hortel project, we'll look at demand supply dynamics of that city.

Okay, thank you for the opportunity, yeah.

Our next question comes from the line of Ronak Agarwal with iThought PMS. Please go ahead.

Yeah, hi, sir. Thanks for the follow-up question. What's the kind of KPEX are we looking to do in FY27 and FY28? And what is the KPEX which we have already done in Q1, FY27?

He wants to know the capex, what was in Q1, and what is our future capex for the coming time.

See, most of our properties are on lease, where our component of capex is very minimum. Appropriate time, we'll look at renovation, refurbishment of our Mumbai Puna Hotel. So, plans are underway. We are finalizing design. Give guidance on that maybe next quarter or so. And if any property, if we get, let's say, brownfield or a land parcel, as we speak, there is no such project on the book. So there will be capex for that. So I mean, just to give you guidance, it will be normal repair and maintenance capex for next two years. Thanks, sir.

Thank you. Participants, to ask a question, you may please press star and 1.

I think there's no questions further from what we can see, so I think we can end the call. If there was anything, then it would be any questions. So there's no point in unnecessarily dragging it. I think our results are very self-explanatory. This time the improved presentation in our PPT also is there. And by the way, any participant who has any question or queries further can directly reach out to Mr. Milind or our CFO, Mr. Milind, our CFO, or our CS, Mr. Nikhil, and we'd be happy to take up any questions and queries further. So thank you, moderator, and I think you can end the call after your closing.

On behalf of Kamath Hotels, India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.