Mahindra Holidays & Resorts India Limited (MHRIL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Mahindra Holidays and Resort India Limited Q4 FY26 Earnings Conference Call. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, 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 Mr. Manoj Bhatt, MD and CEO. Thank you, and over to you, sir.

Thank you. Good evening, everyone, and a very warm welcome to our Q4 and full-year F26 earnings call. On the call with me today, we have Mr. Vimal Agarwala, our CFO. Our results and investor presentations are on the stock exchanges and on our company website, and I hope you have had a chance to go through them. As we start this call, I think for us, F26 has been a year of transformation for the company. And on multiple perspectives, we had a significant revamp of our offerings and launched a simplified, privileged-led product portfolio called Keystone. That launch happened in December. It also aligns with our vision to scale our core business and establish ourselves as India's largest leisure hospitality player. If I look at the other measure of growth in the business, I think our network expansion continues on a good pace. We are expanding inventory while focusing on quality. During the year, we added about 900 keys. Our total inventory today is about 6,228 keys. We added seven managed resorts this year, which is same as last year, and completed expansions at five existing properties. This 900 keys is the highest ever in our history that we have added, and I think as we go into F27, we are looking to build on this. We expect more than 1,000 keys to be added in F27. During the quarter, we added three resorts, Dapoli and then a resort in North Goa and Chikmagnoor in Karnataka. The other side of the equation is about the ongoing projects. We have three ongoing greenfield projects, greenfield, brownfield projects, and a land bank of almost 500 acres. We have ample opportunity for future expansions. Pre-construction, which is design and so on and so forth, has been initiated for another five resorts on these land parcels, which will collectively add more than 600 keys in the next few years. The other thing which I want to talk about is the multi-year upgrade of our resorts, and I think from a timing perspective, we are close. We have been talking about letting go of keys which are suboptimal. During the year, we surrendered about 500 keys. And this will continue into the next two or three quarters as we sharpen the quality of our portfolio. And hopefully by the end of... The other thing which is happening is that these are improving availability meaningfully. I think that is driving a strong wave of member upgrades. Upgrade value was up 33% year on year, which is members who are, current members are upgrading to either better duration or better plan within the same duration. And that is up 33% year on year this quarter. We are also seeing robust momentum in referral and digital. Both these channels now are at about 69% of the total customer acquisition, compared to 63% in quarter for this last year. If you look at the other metric which we track is sales value. Sales value is about 160 crores, which is, as you know, this doesn't come directly into the P&L. This is amortized over the life of the membership, and that That is at 160 crores. This is new sales plus upgrades. And to me, this number is now starting to grow from this quarter onwards. If I look at the other metric around premiumization, our AUR is now at 14 lakhs if I include the upgrades. Otherwise, it's about almost close to 5 lakhs, give or take. As well as news. Acquisition and focusing on the right. Right kind of target segment for our membership. Overall, at a net level, this is including cancellations. We added 1144 new Keystone members. Our overall membership base is roughly constant at about 3,000, 3,000, 3,000. The other thing is about our technology journey. I think there are several initiatives across the guest journey where we are using AI and technology. Some of the key examples are that we have a digital platform for consistency from a sales perspective. We have implemented a booking recommendation engine which has helped us focus on managing inbound demand for rooms. There are some elements of paperless check-ins which have been implemented and an integrated system for capturing customer feedback and improving on how do we become more personalized and more focused based on the data we have on most of our customer behaviors. So, I think this is helping us create more engaging and curated experiences for our guests. The other thing is all of these have led to a strong utilization of above 80% and double-digit resort revenue growth this quarter. The other thing I must mention is despite the ongoing LPG crisis, which has impacted some of the industry on the ability to serve customers on the F&B front. We were able to provide all of the menu options with minimal disruption. And this was because of our longstanding commitment to sustainability. And we had invested in electrification and solar power in many of our resorts. And I think we had accelerated these efforts also early into the crisis. And to me, I am very happy to say that we have the ability to swing across fuel types and sources of energy. And continue to deliver our offerings without any disruptions and interruptions. So that's something which was an event which happened and we are able to respond very, very quickly. On the numbers, I think while Vimal will talk more, the standalone profit excluding one-offs grew 22% year on year. And a margin expansion of 220 basis points. I will also touch upon our European subsidiary. And I think there, I think we did see, we did see some... The other thing which happened during the quarter is overall from a credit. I think there were some rejections which were very high on some of the new sales. Now we are onboarding other banks and other partners which should rectify that situation as we go along. To conclude for the quarter, I think we have made very good progress on our India business. And I think we are in the right direction. But if I look at the European business, I think there is a set of initiatives which we have to work upon in the coming years to actually look at improvements there. The last point is more in the standalone books again, recognizing the... Various geopolitical situations and the economic situation in Finland, we took an impairment in our standalone books of about 234 crores. This is obviously a one-off. With that, the current holding value of the business in the India books is now zero. And this only impacts standalone and does not impact consolidated. With that, I'll ask Vimal to expand a bit more.

Hi, good evening, everyone. I'll get into details so far as financials are concerned. Let me first call out MHRL standard on Q4 highlights. Our total income was 407 crore. Within that, operating income was up 4.3% and resort income grew by about 11%. EBITDA was 142 crore, which again was up 8% on a YOY basis, and our EBITDA margin also expanded by more than 180 BIFs. This quarter, we have taken an impairment charge, as Manoj mentioned, of Rs 234 crores towards equity investment in Mauritius entity driven by HCRO Business Outlook. Excluding this one-off charge, our PAT was at 55.4 crores. Our cash position continues to be healthy at about 1446 crores as on 31st March 2026. So far as consolidated Q4 highlights are concerned, our income was at 844 crore, up by about 5%. The call was 221 crores, with an EBITDA margin of 26.2%. PET was at 41.5 crores, including forex impact, excluding one-off impact Q4. Thank you.

Thank you very much, sir. 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 withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Deepak Saha from Ashika Institutional Equities. Please go ahead.

Hi, thanks for the opportunity, and congrats on good sort of execution on the standalone side. So my first question is, when I look at your numbers, especially on the resort occupancy side, I mean, in a challenging quarter like this, when we had so many, you know, geopolitical implications, so what is heartening to see 82% kind of an occupancy. But what we understood during the quarter on the luxury side, leisure side, there have been quite meaningful cancellations. So just trying to, because of this, you know, war environment, just trying to understand, Is it like our dependency on foreign guests is less, or we executed the quarter well despite having foreign dependency, which led to 82% kind of an occupancy? Just a few thoughts on that.

So Deepak, first of all, I think our dependency is less on foreign guests. So if I look at our foreign guest impact, it is a very, very small number during the quarter. And so compared to probably some of the others in the industry, that's one thing in our model, which is largely domestic because of the occupancy being led by members. And typically what we have seen is that we have been hovering at high occupancies for both members and non-members put together. And that's something which is, in a way, I would say, I think, a feature of the model. And that is, and this one is actually on the increased... If you compare it to some of the previous quarters. So in that sense, it is absolute value terms. It is probably something which we are inherently in our models. And the last one is that obviously we are seeing a shift from member to non-member. Non-member occupancy also continues to show steady growth.

Got it. And it's really heartening to know. Sir, and another thing is, last couple of, I mean, last three, four quarters, we have seen consistent expansion on EBITDA margin on the standalone side, driven by reduction in marketing and rental other expenses. So, going ahead, since we have already, you know, capitalized a lot on the marketing side and rental side and other expenses, so how should we think of going ahead? Will this expansion continue or will we be entering into more of a stabilization phase as far as margins are concerned on the standalone site?

Yeah, so firstly, clarifying on what drove this improvement, I think there were multiple measures around cost of acquisition for sure. We also looked at our practices on collection cost overall, and that has helped. So I think there are multiple drivers there. I think as we look into the future, some of the easier ones in terms of... Getting the benefits are lower, but I think if you look at how we are looking at the next 12 months, I think the combination of continued focus and bringing down overall acquisition costs as well as increase in resort revenues will contribute positively to margins. The only factor I would say as you look at F27 is our treasury income could potentially drop because as we do spend on capex and this I have probably mentioned earlier also. As we look into F27. So, our operating side of the profit, we do expect the trajectory to continue. Now, all this is given the current conditions. If anything changes in terms of potentially the long-term impacts on India, which at least we are not seeing at this point, that could change. But that's the way to think of how profits going forward.

Got it. And on the new subscription that we launched, that was our Keystone package. Last quarter, I understand we had limited period. This was the full first quarter in terms of the feedback and the response that we were getting. So, earlier, my understanding is we saw kind of 15-20% increase in AUR given by Keystone. Now, this quarter, what was the, you know, effect in terms of, what are the effects in terms of incremental benefit coming from Keystone and changes in updates?

If you look at just new sales AUR, I think new sales AUR has jumped up roughly 20%, so it's holding that number. 5-year product. Now the largest product is the 10-year product. And so that has helped overall AUR. And there are other such changes, but I'll wait for some more time because this is just the first three months. But clearly trending in the right direction and holding that improvement in AUR.

Got it. Thank you, sir. Just one last question.

Sorry to interrupt, Mr. Saha. May we please request you to rejoin the queue, sir. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the question queue, please restrict yourself to two questions per participant. Should you have a follow-up question, please rejoin the queue. Next question is from the line of Jayan Parasaramka from 3PIM. Please go ahead.

Yeah, hello. Am I audible? Yeah, we can hear you. Go ahead. Yes, thank you for the opportunity, sir. Just a couple of questions. Just going back to our Vision Day statement of tripling our revenue over the decade, just trying to understand the growth implications from here going forward. If I just do a back of the envelope calculation, it implies around 17-18% revenue growth. Given the member addition has been quite stable, it's been around 1%. So from a revenue growth point of view, how should we think over the next three, four years, what will drive revenue growth for the company going forward?

So, first of all, we had said 3x during the decade, so the baseline, I don't know whether that corresponds to 17%. So, I think it will be, my calculation, if I remember correctly, it will be no teens kind of number in India. And we had built something in Finland. So that's how we had reached that number. If I remember correctly, I don't have, but it won't be in the 17-18% range. However, on the profit side, I think we had said that that's something which might be a slightly higher number as we go forward from point to point. So what we had said was that in the initial period, maybe treasury income falls. But as we shift the model, I think we would see that point-to-point profit growth would be.

The point on the standalone business being that VO income and ASF income is mostly linked to member addition, and resort income, I believe, is the one where you have a benefit of both FIDs and non-members and members. So how should one think over the next couple of years since our member to inventory room ratio is now below 52, how do you think that will grow over the next couple of years and potentially by FY30? How should we think about that?

So, the way to think about it is a large proportion of incremental growth. So, let me kind of recap what we said, right? So, we said that we are focused on getting higher quality members with higher AUR. And we are coming off a base of much higher member additions. So, we are seeing that kind of slowdown which is happening in terms of the… Revenue growth from membership and ASF. The incremental growth which we were talking about was really looking at how do we get to... And within that, I think there will be a non-member revenue push which will happen because considering that... For members as well as non-members, and that will then reach to the number where we feel that We come in from that direction. From a utilization perspective, because that's the other thing which I've got asked many times, this quarter we are able to showcase that utilization we are able to manage at 80.7 or 81%. So I think what's happening is even as the member to room ratio is now 50, I think the utilization slack is being picked up by the non-member revenue streams. And so that's the way to think of this kind of.

Sure. This was the last question on the HCRO business. I know we've taken an impairment hit. Any views around the same on FY27? What is our views around this?

So, Jayant, I think, see, obviously, there was an element of... Below, par. The weather and some of the credit conditions changing. And what's happening is, if you look at Finland, I think given the storm, we are actually seeing... The rise is actually the weather, and that's specifically in Finland. In fact, our canneries and Sweden operations continue to do better than last year. The other thing is, as we look at F27, I think there are multiple things which we are looking at. So one is, of course, the credit situation. We are onboarding new partners, which should actually help. In terms of conversion of sales, because I think what's happening is, quite a few people are not getting loans to buy the product. And as you know, some of these economies, they do depend on credit. And that's something we are onboarding new partners that should happen in Q1, Q2. The other thing is about really thinking about how do we optimize in terms of the cost. And then, clearly, I think this is the year we might start looking at longer-term strategic options for the business, and that's a more longer-term kind of solution. But that's what we are focused on right now, and I think... Whether it's a you. For Finland, but I'm not kind of building that into it.

And all the best.

Thank you. Next question is from the line of Shreyaan Skatani from SG Securities. Please go ahead.

Good evening. I had a few questions. So the first one is on the AUR that we saw, you know, the rise that we saw in AUR is that. So a lot of it pretty much comes from the upgrades. So I'm trying to understand, you know, How much of juice do we have left in there or was this quarter like a one-off because of the Keystone launch and, you know, pretty much a lot of people, you know, like sort of a front-loading kind of an effect and that will, you know, taper off as the time passes. If you could just give some sense on that or, you know, how long do you see these upgrades continuing in terms of the population that we have eligible for upgrades?

That's a great question, Shreyan. So, I think I would say that we have also been positively surprised by the adoption of Keystone by our current member base because that's what these upgrades are. And I think what we have heard is that the simplified, because we have eliminated a lot of rule sets, we have offered... Breakfast as a standard offering because that used to be one of the requests. We have introduced a concierge service. So many of those things are finding a lot of resonance. And to me, that's something which is a very good sign. So that, and as you rightly said, that is contributing to the, so that's why I gave the other number. If I remove upgrades also, our base new AUR is also up 20%. And that also is a very good sign, right? So we are actually seeing both the engines firing. I do feel that based on whatever we are hearing and seeing from the resorts, because a lot of these upgrades happen at the resorts, I think the momentum ideally should continue. Unless, of course, there are events which happen. But I think that's what I would bet on. So if you look at the last four quarters, I think it's been a consistent trend that upgrades were in Q1 about 56 crores. And in Q4, they are about 93 crores. And so it's been a constant journey of... And I think given that we have more options now, so we are giving season, room size, and tenure all as options for upgrades, it is giving the customers to choose what is the right product for them, and that is also contributing positively to upgrades.

Got it. That's helpful. So my second question was on the resort revenue. We've seen like a pickup, you know, even though, you know, we've seen like a stagnant occupancy as such. So like I'm just trying to understand we break it down into like F&B wine and liquor and then room rentals. How much of this comes from the F&B wine and liquor section versus the room rentals? Because room rentals would pretty much, you know, contribute like. To the, you know, backfilling the occupancy that has opened up due to the non, due to the members, right? So, like the F&D and the wine breakup, if that is available, like in terms of growth, that will be helpful.

So, I mean, What do you think of it? We have expanded capacity, and on that expanded capacity, there are two things happening. One is, members, probably given that we are flattish on members, the absolute member occupancy in terms of room nights is the same, and so actually as a percentage, it is declining, and that is being picked up by non-member. And that is contributing to room revenue growth. And that then translates into F&B and other growth. So the predominant component is room revenue. And I think we are optimizing across both member and non-member segments using a combination of technology as well as resort-wise kind of. Trends around what has been the historical member preference, and that's working for now, and that's something which will continue to evolve.

Got it, got it. So just following up on that, you know, we're looking at... Just like lower member additions as we pass through this year. And then most of the marketing and customer acquisition expenses are, you know, put in the other expenses line item. But that if I compare with March last year, it's like pretty much. No, just pretty much the same 162 crores versus 160 crores on the standalone. So where are we, you know, like in terms of customer acquisition costs, like what is, you know, holding the other expenses constant, I would have expected some benefit over there in terms of lower marketing costs for like lower number of customers that you're adding now.

So, I think on marketing costs, there are two, three things. So, there was a Keystone launch. So, of course, there were some expenses towards that, which we did, which has come in a very small amount, probably in Q3 and then some amounts in Q4. I think, so that's one factor. But more importantly, the philosophy here, as we go forward, and that's what I said is, Focusing on the metric of COA and not absolute cost, which means that I think we do expect at a gross level, given that we have the new product and what is the response of the market, we do expect scaling up member additions, not to the extent from the previous year, but definitely. Compared to what is happening in the last two quarters, and that should contribute to a percentage COA. Because the idea is that how do you continue optimizing from a percentage perspective and not so much from an absolute perspective.

Got it, got it. That's very helpful.

Sorry to interrupt Mr. Gattani, may we please request you to rejoin the queue, sir. Thank you. Next question is from the line of Nandan Madhivala from East 72 Capital. Please proceed.

Yeah, hi. Thanks for taking my question. So, I just wanted to understand as non-member... You know, revenue is expected to probably do better, given that we are adding so much room inventory. What is the channel that we will look to sell that inventory through? Is it the same, or are we looking to do more on that front, and if you can give some color on that?

So, the channels are... Thanks. Very different, right? So if you look at how do we think about non-member channels, I think obviously there are the travel agents, whether online or offline, then there is corporate as a channel, and then there is the social and wedding, and then there is the website which we are developing right now. So they are very different and mutually exclusive channels which we are developing. So there is no connection between the channel which sells memberships and the channel which sells FIT, except maybe at the corporate level where there are some unified products. For example, we have a product which allows corporates to buy points in bulk and then distribute as rewards and recognition to their employees. So those could be common, but otherwise it's all separate.

So are we looking to go sort of the traditional direct route as well, given that, you know, if adding 1,000 rooms, we are sort of creating space for 52,000 members? Which obviously looks like a tall order. So, the percentage will move towards non-member, and we might have to have more aggressive marketing on that front as well, right? That's where I'm sort of coming from.

So, clearly, that's the direction we are going in. So, that's number one. Number two, as we look at F27, There is a spend which we will do on relaunching. Both channels, because I think it's more focused on the entire relaunch of... And that's something which I think you will see an increase, a reasonable increase in both those quarters as we spend on the full plethora of marketing activities. Also, currently also we are incurring marketing costs on FIT as well as on member sales, and some of that is already in the baseline numbers.

Yeah, thanks a lot. Thanks. All the best.

Thank you.

Thank you. Next question is from the line of Sukrit D. Patil from iSight Twin Threat Private Limited. Please proceed.

Good evening to the team. I have two questions. My first question to Mr. Bhatt is, I just want to understand how do you plan to de-risk international operations given correct volatility and demand headwinds in Europe, and what measurable outcomes do you expect from digital initiatives like Keytone in terms of member engagement and retention? That's my first question. I have my second question after this. Thank you.

Those are two questions, Sukrit, so I'll try to answer them in two parts. So the first one is, as I said, on international operations, there is a set of activities around... Credit availability which we are trying to address through more partnerships. There is obviously from an overall perspective, I think we are looking to see how we can really focus more on some of the areas where these challenges are not so severe. For example, there is Sweden, there is canaries. But as I said, the sentiment there is not so positive. And that's something which we will have to look at. In terms of de-risking, of course, on the cost side, there are initiatives which we are taking, which will minimize the impact of... Any adverse, and that's something which will come through the course of the year. And lastly, I think from a forex perspective, I think we are currently carrying a net exposure, net liability exposure on the euro. And at least from a perspective of some measures around how do we think about it, I think. Those could be actions which will be planned in the course of this year. And to me, the current call is that a large portion of the euro appreciation against the rupee is already in the numbers. So I think the current view is that it might not be something which might be a sharp moment, but we are ready to react if any such moment comes in the coming year. On your second question around digital initiatives, and how does it really impact from a member engagement perspective and then specific? Go to our website. And that's, today, it's a very small portion, I would think it is. I think the entire sales engine is still probably getting familiar with the way to think about the product because one of the things we are seeing is that we are engaging with a little bit of a different target segment. And typically what we are seeing is that the conversion times compared to the older product is a little bit longer. I think so it's a mixed thing between... Probably a lot of focus on training and familiarity. As well as customer familiarity because, for example, even if I look at our referral channel, a lot of members are saying that they want to first understand the product. We will start settling in. I think on the other side, for engagement, I think there is a lot we are doing. For example, I spoke about in my opening statement that today we have an integrated view of the customer using an AI sentiment meter, and what it does is all interactions across multiple channels is now available in a single place and available to the front office. In the results and also to all the agents who and potentially we are creating it for the salespeople also. So all three will have probably a sentiment meter for the customer and so our ability to personalize offerings. This we launched in December. So it's about three. The call-out is happening as we speak, and to me that's going to be the core of our...

Thank you. My final question to Mr. Agarwaj is, with cash reserves exceeding about, I think, 1,400 crores, how is capital allocation being planned between new resource development, debt reduction, and shareholder returns? I just want to understand your plan of action on this. Thank you.

Fundamentally, 1,500 crores which we have got, we do have a plan in place to ensure that we are deploying it for the right priorities. And when I say priorities, there are three, four things which are at front and center. One is the overall customer experience, and therefore, resorts where we can get into transformation or renovation, which leads to better customer experience and feedback, is something which we are prioritizing. On a very small base of about 100 rooms transformation or renovation, which we did, we do have plans to invest. The second one is that we have two resorts right now where significant investments are going on. One is in Thio, which is Himachal. The second one is Ganpati Pule, which is Maharashtra. Both these resorts are at a decent stage of construction. Ganpati Pule should be going live by quarter three of this year. Apart from this, we do have about four or five land parcels where the room key will be about 600 plus. We are right now at either approval stage or pre-design or design stage. So all these three will get into construction phase very soon. Apart from it, there are critical land acquisitions. You would have seen one announcement today of we acquiring about 50 acres land parcels in Chikamanglur. And the whole idea is to get to the right locations by investing where we believe that it will lead to a long-term. Say, operating margin-accretive investments, that's the key priority right now. So far as our international...

Best wishes.

Thank you. Next question is from the line of Dhavneet Sawla from Sawla Family Office. Please proceed.

Congratulations on a good set of numbers. I had two questions. First is, on the Chicago business, I see that it has been a very long time since we have been facing challenges in this business. So, how confident are we that we can turn this around? And secondly, that the impact of this business on our books is huge. So, I was just trying to understand that how should we look at it in terms of both revenue as well as price. Okay. Secondly, on the India business, I wanted to know, there's so much of cash balance there, and we are trying to deploy, but how do we go about actually looking at it at which of the properties or which of the land passes are actually going to be operating margin accretive to us? Thank you.

So, let me take the second question first. I think if you look at all the land parcels we have, I think many of them have been acquired a long time back. So from a cost perspective, it's a minimal cost overall in terms of capital invested. And so I think the way we are going about it is we are looking at the overall IRR and the projections. Thank you. Making those calls. And to me, the way to think of it is, if you look at what's happening today in the market, I think people are looking for newer experiences, newer locations, looking for being enveloped in nature, and many of, if not all, all of our land parcels pretty much fit the bill. And to me... With increased connectivity, for example, we do have, as an example, we have almost 100 acres in Kars plateau, which is where the flowering happens in front of the lake. Now, today, it's about four hours, four and a half hours from Mumbai, give or take. But with, if the missing link comes in, that's going to probably reduce by 30 to 40 minutes. So, it becomes three and a half to four hours. And that's, I think we are seeing more and more people inclined to take those holidays and actually reach those locations. Similarly, so a lot of locational things, which, where is the near? Thank you. What is happening is that if the resort is good and the location is good and if there is not really a benchmark around and which could also be potentially true and if it is in the right segment, I think people are actually... Thank you. And that's something we are also... That's what we are going to focus on.

Thank you.

No, no, I'm not supposed to be.

And as I said that, I think... I think this year... We split it roughly between forex loss as well as the operational. 4x loss is something which is anybody's guess, but I would guess that it's probably more in the nature of a sudden move, which I think might... I said that if we don't feel that way, then we'll have to move in terms of limiting exposure at that point so that the loss doesn't happen. I think on the operational side, I think it's... We didn't require, as I said, operational actions. Thank you. This is the year that we will evaluate what do we want to do from a long-term partnering strategic perspective. I think that's where we are today.

Thank you for the speaker, Hansler. I will join back to you.

Thank you, Zanithi.

Thank you. Next question is from the line of Senthil Kumar from Joint Red Capital Service Limited. Please proceed.

Thank you, sir. Thanks for the opportunity. In your earlier response, you mentioned that management is taking long-term partnership strategy. Could you kindly share some more clarity and what specific steps the management is considering in HCR operation?

No, I think there is nothing to report today, Sentin. I am just saying that in F27, because I had mentioned in one of the previous calls that this is not the time to do a strategic review of the business. I think F27 is the time to do a strategic review of the business and assess what are the long-term potential partnerships or others which we can think of, which will be probably... Beyond the ambit of operational improvements only.

Oh, okay. Thank you. That's it. Thank you.

Thank you. Next question is from the line of Naveen from iThoughtPMS. Please go ahead.

Hi, good evening. Am I audible? Can you hear me?

Yeah, we can hear you, Naveen. Go ahead.

Yeah, yeah. First of all, congratulations on a great set of numbers. I just wanted to get some more color on the signature thoughts. So, do you have any updates to share on that? Are we on track? Anything that you'd like to highlight?

So, I think we had said that somewhere by end of, in this F27, we would be getting ready. I think as we have gone into the details around... I don't think it will come in F27. It's probably going to get pushed to F28. And that's because it's our first offering, and we have actually put some more thought into... Some of the design elements, and that's... I think we have a lot more. We are making progress on that front, but the first one I don't think will come in M27, as I had said.

Got it, got it. And then the next question is going to be on HCR, the Finland operation. So I just want to get your understanding of like, so I'm assuming you have this great understanding of the business so far, right? Like about the seasonality, about the kind of customers that you get and all. So, like, you know, over the past two, three quarters, do you think anything that you've maybe understood needs some kind of revision, like, not from the strategy perspective, but from understanding the market itself? Like, do you think we have to fundamentally go back to the drawing board and rethink certain things, like, from that perspective itself? Or, like, are you still off the belief that this is a great business to be in? Like, that's what I'm trying to understand.

So, I think there are, I would say that if I look at the last three to six months, I think incrementally, I think the consumer behavior has changed towards more savings because of the uncertainty, and that is obviously causing some sort of a depression in terms of our ability to get our product across. The other thing is that from a perspective of... I think the weather vagaries is an unpredictable one and I don't think anybody would have been able to see it. That is one difference if I even look three months back to now. Those are the two major changes. I wouldn't want to comment on, I think as I said before also, I think F27 is when we will do a detailed review of the business. And including whether what are the various options from a strategic perspective. But as of now, I think the state of the business needs action on certain fronts. Optimization. I think those are the two immediate actions, yeah?

I'm really sorry, just a small follow-up to this thing. What I was hoping to understand is, is there any particular reason we took the impairment in this quarter, like, so the underperformance or the uncertainty has been there for a while, right? So, I just wanted to understand that aspect.

Oh, yeah. So, if that was the question, I think the way we felt was that given, because our Expectation was about... Uncertainty around geopolitics will go down, but I think it's prolonging, and also we have another conflict which has started, which could have some impact. So we said that this is an appropriate time to look at the business from a purely an accounting charge perspective and reflect it correctly. Now, if some of these situations changes... 12 months later, we could be having a reversal, but that for a future date, this is to reflect our current view of the business and the fair value and the carrying value in the books is what I think you should look at it.

Awesome. Yeah. Yeah. Thanks a lot for the gratification. Have a nice day.

Thank you, Nabi.

Thank you. Next question is from the line of TVK Vivek Kumar from West Pulse Research and Advisory LLP. Please go ahead.

Sir, am I audible?

Yes, please go ahead.

So, thanks for the opportunity. My question is on how should we think about member edition? I understand you have improved the quality of the kind of member edition and the non-member. So, you will try to maintain occupancy rate at above 80-85% assuming whatever is the member edition, right? So, can we think like that? That you are aiming at occupancy and then member edition you are going to go more from the full side, like you are more very particular on the kind of numbers you add. So, can we take that or do you have any target on number edition?

So, I, as I've said in the past also, I think the quality of the members is more important, and we are targeting a utilization metric, broadly, right? So, and which means that, I mean, we are moving from probably just thinking about in terms of members to as guests, whether it is member or non-member. And that transition, so the way I think of it is, obviously, we have internal targets for member edition. But I think more importantly, we have internal targets for guests and occupancy. And that's what we are more focused on. So one of the things as we thought about this journey is, if we have to make it a pull brand, we can't have. Targets on a minimum number of members to join, we should be able to pull members and non-members both and fulfill our occupancy targets. That's the way to think of it.

So, then my second question is, when this occupancy target, can you share it? Can you maintain around the same levels of 88, above 80% to, are you still on the target of FI 30, 10,000, 12,000 rooms?

So, the room edition target doesn't change, number one. Number two, Even this year, if you isolate, we had a one-time tax payment, and I think the other thing is we started paying tax also this year. Even this year, for example, we have had a 300 crore plus normalized cash flow from operations. And to me, that's a balance I don't think will ever go down. To a level where that becomes an issue. The second thing is that if I look at the various responses we are getting from the market, I think the current level of member edition is definitely sustainable. I think the question is how far do we want to grow without member edition, without...

So, if you do not mind, that was my clarification. So, because we now do not, let's say we add around 1,500 numbers per quarter. So, is the capital and 300 quote on the business, is it enough to double our, because now the capital from the, because I don't know the model.

Capital is not a constraint.

So, is that doubling of the target? Yes, that's my question.

Yeah, that target remains and capital is not a constraint.

And member edition, we are not going to compromise on the quality, that's because, oh. And then occupancy, you are not ready to share the number, sir, above 80 or above 75.

The reason is, Vivek, somebody will put it in an Excel model, and so I do believe that we'll target an occupancy of around 80%, but that's why I don't want to be a precise review. Obviously, I have precise Excel spreadsheets saying how the occupancy will move.

So, yeah. Thank you, sir. Last, just one confirmation that we will not go for debt for capital, like for this doubling of our loans. We will not need debt. So, can I agree? It can be almost, not small debt, but a huge debt will not come out of the balance sheet.

No, nothing will come because I think I have clarified and nobody has asked in this call. Let me clarify then. Only probably 25 to 30 percent will be owned. The balance will come from capital-like models, whether lease or other stuff.

Thank you. Thank you very much for all of us.

Thank you. Ladies and gentlemen, in the interest of time, we will take this as the last question for the day. I now hand the conference over to the management for the closing comments.

Thank you all for joining, and I believe there are one or two or three people who might be still in the queue, and if you have any questions, please email us. We will try to answer it. Apologies, I think we have run out of time. But we are definitely approachable. So please email us and we will take care of it. Thank you.

Thank you, sir. On behalf of Mahindra Holidays and Resort India Limited, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.