Ventive Hospitality Limited (VENTIVE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1FI 27th conference call hosted by Wendave Hospitality. As a reminder, all participants' lives will be in 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 call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Aishwarya from BR. Investor Relations Department at Venter Hospitality. Thank you, and over to you, Ms. Ashwarya.

Thank you. Good evening, everyone, and thank you for joining the earnings conference call to the quarter ended June 30th, 2026. Our financial results and investor presentation have been published on the exchanges and the information pack has been placed in the investor relations section of our website, www.venterhospitality.com. Before we proceed, I'd like to highlight that the management may make certain statements that may constitute forward-looking statements. Please be advised that actual results may differ materially from these statements. Ventive hospitality does not guarantee these statements or results and is not obligated to update them at any point of time. Specifically, any financial guidance and proforma information that we share on this call are management estimates based on certain assumptions and have not been subjected to audit review examination procedures. Joining me today on the call are Ranjit Bhattra, Chief Executive Officer, Paresh Bafna, Chief Financial Officer, and Shoaib Saref from the Investor Relations Team. We will start off with brief remarks on our business and financial performance, and then open the floor for Q&A. Over to you, Ranjit.

Good evening, and thank you all for making time to join us today.

Let me begin with the external backdrop which shaped this quota. The West Asia conflict was the single most important external variable for our Moldy's portfolio. Shipping disruptions through the Straits of Hormuz and pushing crude, jet fuel, and diesel prices sharply upwards for us. April, we saw the first disruption in Maldives in Bound Tourism and then recovered strongly through May and June, ensuring our Maldives revenue still grew by 5% year-on-year in the quarter. The more material effect was our cost base through a sharp rise in Maldives fuel cost, which I'll address shortly. Coming to India hospitality, in India, business delivered strong quarter yet again. Revenue grew 13% to 203 crores, supported by resilient corporate demand, strong mice activity, and premium leisure. This led up Pune, Bangalore, and Goa assets to perform considerably well. India EBITDA grew 16% to 74 crores, and most importantly, our India margin expanded. 36 from 35, even after absorbing higher power and wage costs during this quarter. This reflects our operating leverage inherent in the portfolio. Oona, in particular, continues to validate our long-standing thesis. It's now India's fastest-growing DCC hub and with very low or limited supply in hotels, which leaves our top-tier assets structurally well-placed on both rate and occupancy. I would also like to highlight the structural progress we are making on energy costs in India. Around 70% of electricity used by Puna Hotel's portfolio already comes from green sources, which insulate us from tariff increase. We have now invested around 60 crores in captive solar plants with battery storage for our Puna hotels, targeting for commissioning in Q4 FY27, which will raise our green energy contribution to around 85%. We expect this to reduce our Puna energy bill by close to 45%, a positive impact of 5-6% on India EBITDA, with a payback of roughly 3 years. I am proud of the team that structured this, and it has given me confidence in continued improvement of our India hospitality margins. In Maldives, revenue grew 5%, 218 crores, a resilient outcome given the war-related cancellations early in the quarter. and the sharp recovery that followed. The pressure this quarter was on cost, not on demand. Ibida was 32 crores, down 32%, almost entirely due to fuel. Diesel prices reached roughly 2.1 times pre-war levels, driving a fuel and auxiliary cost increase of around 19 crores. At Raya, we are increasing solar capacity, taking the resort to about 80% solar with battery backup by April 2027. With further capacity being added at Conrad and Anantara. Together, we expect this to save us around $1.5 million a year, roughly 2.5% of Maldives EBITDA. And to protect the portfolio against exactly this kind of diesel shocks in the future. Raya will be able to generate and operate around 17 hours of solar capacity. And it will be the first resort in Maldives to do so. Our annuity business remains steadily high-margin backbone of the group. Revenue grew 3% to 128 crores, with EBITDA broadly flat at 111 crores at 87% margin, and committed occupancy holding at 98%. This dependable cash flow is what allows us to keep investing through the cycles, and we recently added Narmada Estates in Pune, which will extend the base further. On Growth Marquee Editions this quarter, Shri Adhri Hills Wellness Estate, a rich carton reserve, the 10th in the world, set out at around 425 acres, roughly 2-3 yards from Mumbai and Pune and around 45 minutes from Ali Baag. It's an 80-key wellness resort with 33 branded residents alongside, and it takes Vente firmly into luxury wellness and branded residents. One of the fastest-growing segments in global travel. We have acquired it 100% at an equity consideration of around 281 crores, an enterprise value of around 466 crores, targeting a yield on cost above 12%. The acquisition completed in July with the occupancy certificate already received. The branded residence sales are designed to release capital early and help us fund to build. And there is an embedded upside in the land bank with unused FSI. A wider pipeline of over 1,700 keys across eight upcoming hotels remains on track. Our owned and developed projects, the AC by Marriott in Whitefield, Bangalore, the Varanasi Marriott, the Rich Carton Reserve in Portoville in Sri Lanka, and the Soho House, Delhi, A progressing tool consideration, construction towards completion between F528. Alongside these, our promoter group ROFO pipeline of 1,114 keys spanning JW Marriott, Navi Mumbai, and three Moxie hotels gives us long-term visibility towards our ambition of 4,000-plus keys without near-term capital strain, and with each addition, a clear path to double-digit stabilized returns. Looking ahead, we enter the rest of the year with confidence. In India, the structural demand story remains strong. In Maldives, the margin should recover as diesel price eases and a solar capacity comes online. Our annuity business continues to provide stability. Our priorities are unchanged. Grow TREFPA, grow REFPA. Widen margins through hands-on management, execute the pipelines with discipline, and pursue acquisitions only when the risk-return equation is right. With that, let me hand over to Paresh to take you through some of the financials and balance sheet in more detail.

Thank you. Thank you, Ranjit. Good evening, everyone. Before turning to the quarter's performance, a brief note on comparability. With the acquisitions completed in August 2024, now fully annualized, both Q1-FI27 and Q1-FI26 are presented on a like-for-like reported basis. Accordingly, unlike previous quarters, a pro forma comparison is no longer necessary. The only factors affecting comparability are the temporary closure of the Bangalore property for innovation and the addition of Goa Hilton following its acquisition. The quarter marked a strong start to the year, with consolidated revenue growing 7% year-on-year to 554 crores, driven by healthy performance across our operating segments. Hospitality revenue increased 9% year-on-year to 420 crores. Continuing the strong momentum in our core business. Within this, the India portfolio delivered standout growth of 13% year-on-year, reaching 203 crores, supported by sustained improvements in both occupancy and average room rate, as Ranjit highlighted earlier. The Maldives portfolio contributed 217 crores, reflecting a solid 5% growth over the prior years, despite being a quarter affected by geopolitical tensions. Our annuity business also delivers steady growth, with revenue increasing 3% year-on-year to 128 growth, demonstrating the resilience and stability of this segment. Overall, revenue growth during the quarter was broad-based, led by the continued strength of the hospitality business, supported by the stable contribution from the annuity segment, displaying the quality and diversification of our portfolio. Consolidated EBITDA remained resilient during the quarter, with consolidated EBITDA at 205 crores and a healthy margin of 37%. The year-on-year decline of approximately 16 crores was largely attributable to our Maldives operations, whereby geopolitical developments led to sharp increase in fuel costs. Our India business continues to perform strongly, delivering a 16% growth in EBITDA to 74 crores, reflecting the strength of our operating platform and portfolio performance. Our higher EBITDA growth versus our revenue growth reflects our strong operating leverage in our Puna and Bangalore hotels and the addition of Hilton Goa to our portfolio. Our same-store revenue grew by 10% year-on-year, while our same-store EBITDA grew 15% year-on-year, which shows that our legacy portfolio is outperforming strongly. Our multi-business was impacted this quarter, with an EBITDA of 32 crores declining 32% year-on-year. To put it into perspective, The decline in absolute terms of rupees 15 crores, which has 3-4% impact on our annual Maldi-Libridda. Fuel and other ancillary costs rose to 38 crores from 19 crores in the corresponding period last year, with fuel costs per litre doubling from pre-war levels during the peak war in April-May. We are already seeing the fuel costs recover in July by 26% from the peak. We are also confident of recovering this decline in our Q3 and Q4 peak seasons. This geographic cost headwind was not indicative of any broad-based deterioration in operating performance as reflected by our revenue growth. At an overall level, our hospitality EBITDA declined 4% year-on-year to Rs. 106. which shows the strength of our India portfolio which was able to observe the decline in Maldives to a significant extent. Our annuity EBITDA remains stable at 111 crores with an EBITDA margin of 87%. I will now explain the adjusted EBITDA numbers after normalizing both years for the identify one of items and for the extent of fuel cost type. On that basis, Consolidated adjusted EBITDA was 230 crores vs. 219 crores, a growth of around 5%. In our India business, we adjust Q1 F56 EBITDA for one of the electricity benefits received in aloft overall last year. With this, adjusted EBITDA would have been 18%. In Maldives, if we adjust the EBITDA for the one-time fuel and ancillary cost spike due to the West Asia war, then it would have been, then it would have grown 10%. Adjusted hospitality EBITDA would have grown 14% year on year. The higher diesel cost is a real external input pressure that we are structurally addressing through our solar program, which will future-proof us from external future price volatility. Annuity EBITDA was also affected by one-time transaction cost. Adjusting for that, the annuity EBITDA would have grown by 3% year-on-year with 90% EBITDA margin. Overall, the underlying operating performance of the business remains robust despite the temporary cost pressures in the Maldives. Our profit after tax for the quarter was 124 crores on account of tax regime transition, which resulted in tax expense going down by 102 crores. During the quarter, based on the assessment of expected future profitability and current tax liability, we have elected to transition from the old tax regime to the new tax regime. As a result, the applicant tax rate has reduced from 34.94 to 25.17%. In addition, the change in tax rate requires the re-measurement of deferred tax assets and liabilities recognized in earlier periods. This resulted in a net reversal of deferred tax liabilities amounting to 102 crores in the consolidated financial results. I am pleased to report a continuous improvement in a debt profile with the cost of funds for Indian portfolio reducing to 7.2% while the cost of funds for a Maldivian asset declined to 6.1%. An improvement of 12 basis points over the previous quarter. As of 30th June 2026, total debt stood at 2095 crores, comprising 1329 crores linked to Indian assets and U.S.G. 8-81 million, equivalent to Rs. 766 crores associated with our Maldive portfolio. A balance sheet remains strong with a comfortable net debt position of 1514 crores. A disciplined approach to capital management continues to enhance financial efficiency and provides flexibility to deploy capital towards strategic growth opportunities. Reflecting strong operating performance and stability annuity cash flow, a net debt to EBITDA ratio remains healthy at 1.2x. Our financial strength is further reinforced by a credit rating. Ventrave retains its crystal double A stable rating. The group generated 156 rows of operating cash. This reflects healthy underlying cash generation from operations. The operating cash was effectively deployed towards capex and acquisitions. Our strength is rooted in a diversified business model powered by three complementary growth engines. India Hotels, Maldi Resorts, and our high-margin annuity portfolio. With our strong balance sheet and diversified business model, Vente will continue to deliver resilient financial performance, at the same time remaining well-positioned to pursue growth opportunities, execute strategic investments focused on disciplined execution, food and capital allocation, and creating enduring value for our stakeholders. Thank you.

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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kunal Akhan from CLSA. Please proceed with your question.

Yeah, hi. Hi, thanks, team, for taking my question. My first question is on, you know, despite the, you know, global situation. You know, we did well in our India portfolio. Particularly, our rep power was up about 20%, driven by both occupancy as well as rate. Now, just want to understand, like, what gave us this ability to, you know, drive such growth in both, especially in the rates in this, you know, seasonally soft quarter? And secondly, like, do you see any further, you know, headroom for growth on these, especially in your pooled portfolio?

Okay, I'll take that answer, that question. Ranjit here. Thanks so much, Kunal. Break the question into two parts. So, what actually drove our occupancy and ADR simultaneously? I think that is the key part here. As you know, quarter one is actually seasonally one of the softer quarters, and we've shown really strong occupancy, REFPA and REFPA growth. Our occupancy grew to 67%, up about 7% is reflecting very, very strong demand both in Pune, Bangalore and Goa. Most importantly, the important point is we added occupancy and rate at the same time. I think that's something that's... Very unique. We are also up about 8%. So that only happens when the demand is genuinely strong and the discounting is not really happening to fill room. So this is what we did in our portfolio, the Indian portfolio, resulting in a 20% rare park growth. To identify a few structural drivers behind it, I think one could be definitely our dominance of our Puna market. Where we have a very dominating situation, literally controlling the market, with the addition of the International Convention Centre of JW Marriott combining with that. I think that could be one very big pillar for this. That, of course, creates some nice business and weddings and conferences and, in effect, fills in rooms as well with indirectly a lot of effect on F&B. Resilient corporate demand as Puna and Bangalore Micromarkets, anchored by IT Manufacturing and BFSI, still remain very, very resilient. A favorable industry. I think our industry is still on the upcycle as a whole, hospitality industry. So the demand supply gap is still there. And I think lastly would be the strong wedding and social calendar throughout the year. So this is where we are. I think the second question was about Puna pricing. So I think, like I said before we... We literally control 65% of the luxury inventory in Pune, and the important point here is not only that we control the inventory in Pune, the most important point is that there is no new supply announced in Pune, and we have a very clear runway, at least four to five years. As you know, typically it takes a long time to make a hotel in luxury segment. So that is why I feel the pricing power in Pune is here to stay and strong. It's also our hotel occupancy directly into office stock expansion. I think what we have in data is around 45 million square feet will be added in Pune by 2030. So this will feed into our hotel room nights, the existing 95 million square feet current office stock. In my view, this base scenario, we expect to add about 200 to 300 luxury and upper upscale room nights on a daily basis, which would also mean about 7% to 8% occupancy increase. Over and above, Puna has about still a very strong... The presence of the GCC market, about 15 to 20 percent of India's GCC market, that also is a big driving and it's also here to stay in Pune. So that office demand fueled by the GCC with over, I think, 50 percent leasing in Pune now. I think that is also further exit. And lastly, I would like to conclude by giving some flavor on the infrastructure. I think we have some infrastructure development, the missing link, the proximity to Navi Mumbai airport and the outer ring road, etc. I think that would also contribute to the Puna pricing. I hope I answered the question.

Yeah, pretty much. A follow-on to that is, you know, considering all these payments for the Puna portfolio and then, you know, the sustained demand in other markets. Where do you see the margins settling, right? We already saw some improvement in this quarter for India. I'm talking about the India margins particularly. Where do you see those going?

Like I said in the opening remark, we are doing some margin improvements. Kuna, at this stage, is probably the most expensive city in India when it comes to electricity per unit cost. So with our capex of about 60 crores with the three-year payback, I think that itself will increase the margin to maybe translate into 4% to 5% in my view. So, the solar is a pivoting catalyst in our margin improvement, and this will happen in the first quarter next year.

Yeah, my question is more so on the operating leverage side, right, with not so much on the cost side, more so on the operating leverage side with the, you know, uptick in the occupancy and EDR potentially, yeah.

So there's inherent operating leverage that is coming anyway through our cost structure, which is there. On the demand side, what we've seen is that the operating leverage is coming through high occupancies. A quarter one jump of 7% occupancy is exceptional, given that we've always had great growth in our rates. This time we've had a 7% in occupancy increase. I think that's a phenomenal jump in occupancy, and this is going to stabilize over some period in high 70s is my estimation. Apart from that, I think I'm seeing a very strong domestic demand offsetting some FTAs. That itself is also a very, very healthy move. Big new accounts are actually coming and helping and driving new business will further accelerate.

I understood. And my one last question on the international business, I mean, you did articulate well in terms of the impact of costs that we saw with the diesel and other stuff. But if you can talk a little bit on the demand side, how did demand play out for the international business over, say, April, May and June, and then particularly how July has been, and if you can give some direction for the rest of the year.

So, our commercial strategy, and I'm now talking purely Maldives, our commercial strategy continued. We shifted our focus. There was disruption, as we all experienced it, and more so in Maldives. The commercial strategy continued shifting to higher value supply. And source markets, I think that is one thing. India demand increase, actually, that's a good data point, from 6% to actually close to 9% for more days. And there was some shift in the China business. China and Russia turned to be one of the top performing countries, giving huge double digit occupancy growth for our resorts.

And, yeah, that whole segment mix and moldies continues to

play out within retail, loyalty, and wholesale business. More on the direct bookings is where the focus is.

In July, are you back to double-digit growth in revenues?

July, tourist arrivals have actually recovered to 20-25 levels. And this is with only 27 disrupted flights. This indicates the travel disruption seems to be easing. This was compared to about 170-odd flights that were disrupted before. So, July arrivals have already recovered to, in short, the answer to 2025 levels.

Okay. Okay. Understood. Thank you so much and all the very best.

Thank you. Thank you so much.

Thank you. The next question is from the line of the above from High Tanks India Securities. Please proceed.

Hi, thank you for the opportunity, and congratulations on a good set of numbers. My first question was on our acquisition of Kelce Eco-Reserves. We have mentioned in the presentation that we are targeting yield on capital of 12%. I wanted to understand, given we are funding this project primarily via debt, where cost of debt will be somewhere around 7.8%, does that reduce our overall IRR in the near term, And it extends the payback period. And related to this, what is generally the criteria that we consider while acquiring the new properties and including, you know, threshold IRR, etc.? That's my question. Thank you.

However, this is Parisha. On the acquisition of Kezai, as you are aware, you know, we are going to brand it with the risk, heart and reserve. So that is a good value to the project. We are expecting, you know, as you mentioned, that everything is not going to be funded by debt. We are going to use a certain amount of internal accruals also. For the construction and completion of the project. And we expect certain tourism incentive subsidies captive to the 15 to 20 percent. We are looking at the resolving operation in two to around two and a half years. And, you know, whatever the... The result, it would be funded by way of debt, but it will be in a state-wise manner, so, you know, everything would not be committed earlier, and the funds will be done, you know, funds will be taken from required.

Understood, sir.

And regarding the general threshold or criteria for considering an acquisition, what are those? And regarding the kelsey eco-reserves again, what will be the total land that will be utilized now for the 80-odd keys that we are planning for a wellness resort and the sale of branded residences? So if you can provide more color on that.

So the total land is around 420, like I already said.

Can you hear me? Yeah, I can hear you. Yes, sir.

Okay, just to give you a perspective, I think this land cannot be looked at in isolation as a green.

I think I lost two of them. Yeah. Okay.

I don't know how much I said or how much you heard, but I'll repeat it. There's some problem. It's going on. Auto-mute. Vaibhav, can you hear me?

Yeah, I can hear you from now.

Okay. Just to give you a perspective, I think I have to go back to a little bit of history of the land. This is a fairly big chunk of land, not easy to accumulate. This land was actually conceptualized. By the Khanna family, who actually are the owners of the Ananda Hotel in Rishikesh, Ananda Wellness, probably the first wellness resort in India, at that time conceptulated with the Mandarin Oriental Group. So when we have actually acquired this asset, it comes with very strong inherent positives, one of them being that the completion certificate is already there, and the ATK structure is already complete. So that itself is a huge plus. The ATK structure will be on 72 acres to answer your question. And balanced 33 villas will be for sale. That itself will be around 69 acres. So you see that these are very generous, well laid out villas designed for exclusivity and a lot of privacy. So that is the inherent. We are not actually trying to maximize FSI or do over construction there. Balance land will be in phase two. And we'll see after phase one what we have to do.

So just adding to what Ranjit said, you know, even, you know, the sale of villas will also get, bring down a cost of acquisition, which will further increase our YOC over the tenure.

Understood, sir. Perfectly clear. My second question was on our Maldives business. We have seen a slightly lower revenue growth, but EBITDA performance has been, EBITDA decline has been quite significant. You have mentioned in the presentation it's because of the diesel cost spike. Can you bifurcate this in terms of how much was because of the diesel cost increase and how much because of the operating performance? And related to that, what will be the margin outlook for Maldives for FY27?

Okay.

Yes, I think I tried to explain it in the opening speech, but I will give the more details as requested. For us as Ventiv, you know, Maldives has always been a very, very resilient market, and that's why we are there. I think this quarter, we grew at 4.9% in revenue, almost 5%, and this portfolio for us has only compounded. In both revenue and EBITDA, in all the past six quarters, and that too with double digits. So that's important to give you a little bit of the flavor. This quarter, our EBITDA fell, yes, by 15%. The fuel bill actually rose by 17 crores over the same period, and 2 crores in indirect impact. So total is about 19 crores. And the entire EBITDA decline was because of the diesel rates. So in price terms, The diesel price doubled in April and May peak versus the pre-war level, so I think thanks to our cluster procurement, since we have three results, we have some cluster advantages. Our diesel price was still 20% below spot market, but this is the only quarter where we've run into a one-off, in my view, which is definitely a one-off impact, purely due to external factors. And I heard... Revenue has still been growing. Our occupancies have also been strong. I think this conflict is very, very unfortunate, and crude oil prices did spike, no denial. We saw the impact. We braced the impact. Our maladies results are hugely dependent on energy. So, luckily, this happened in a week quarter. I could look at it in a different way. So, if we strip the diesel spike, suppose the spike didn't happen, what would be the number? So, if we look at the cost of Maldi's EBITDA, it would have been actually, it would have grown by 10% versus the minus 32% EBITDA decline in a non-peak water under war conditions. So, this is the numbers I think you are looking for, and I hope I was able to answer. Q3 recovery and Q4 recovery. I'm pretty sure offset the Q1 and Q2 one-off impact.

Perfect, sir. Clearly understood. Just lastly, on the Goa Resort that we acquired, the Hilton property, how has been the initial performance after the acquisition? How is it trending in terms of the overall IRRs versus the expectation? And what is the outlook going forward? And the brownfield expansion that you have mentioned of around 50Ks, when does that start and the related capex for it? That's it from my say.

All the... So, the 104 keys, Goa is showing, you know, encouraging signs of occupancy and both revenue growth after Ventiv has actually taken over. What we're doing is actually without disrupting operations, we are doing the entire, we don't give unit level numbers, but I'll still give you enough data so that, you know, you can see what's happening there. We are doing our planning, commissioning, designing, everything for the extension of that 50 rooms plus, which will happen, and the existing rooms that need to be refurbed and rebranded. So that is happening. Apart from that, there is Sol de Goa, which is a 21 boutique hotel in Nerul. That is also under planning. And Saipan, his land, that is also under planning. All set to be delivered with refurbishment and brand gain in somewhere around FI 2930.

Thank you for the detailed answer, sir, and all the best.

Yeah, and I think by doing all this, we are definitely looking at conservatively doubling our EBITDA after doing all this.

Great. Thank you so much.

Thank you. Before we move to the next question, if you wish to ask a question, please press star and one on your touch screen telephone. Thank you. The next question is from the line of Sumanth Kumar from Modi Rajuwal. Please proceed with your question.

Yeah, hi, Ranjit. My question is for Maldives. We have seen a significant impact of digital price hike. So, what are the key initiatives we have taken during the quarter to protect the margin, and how is this initiative is going to, for the future, it is going to be, to have a, negate whatever the increase we have in the diesel prices, and for that, is it, is it, is it, the margin is going to improve in FI 27, FI 27 or FI 28?

Thanks, Sumant. Yes, I mean, the fundamentals of Moldy's still remain. This is a one-off war situation with spike of diesel price. I think the uniqueness... of the one island, one resort story, blue water, white sand. That's not going anywhere. The connectivity that Maldives enjoy is global connectivity, global distribution. I think it still has the top leisure destination as a global resort player. This has to be, this is not going anywhere. So that is my view. Please treat this as a one-off diesel price increase leading to margin decline. We have seen over the period, Sumant, whether it was the 2008 financial crisis or COVID or even this war, I think more diesel always bounce back and is super resilient. Please take that as a very encouraging data. We are, I think, confident on recovering on our current levels. The diesel and war related are beyond our control, but the controllable levers are all working. The Q3 and Q4 are the high seasons typically, and the business looks very, very strong on our books. There will be revenge traveling. There is always inherent bookings that come up. In leisure markets, what we've also seen is that, you know, the demand recovers faster and is least affected. In that too, in the luxury segment. That's where our uber luxury resorts, Conrad and Anantara, have already, what we've seen, the data have outperformed the market. So, yeah, the business on books is good. The 15 crores impact will be negated, the Q1 and Q3 and Q4. And, you know, Raya also has performed as per what we expected. The good news here is to mitigate EBITDA margin, what you asked, is our solar program. What we've taken is we've taken steps to mitigate this diesel cost impact in the future. By commissioning one-off solar capacity along with batteries in all our three resorts, but more so in Raya. So you will see the results from FY28, the solar program, Raya will be moving to about 80% of solar by April 2027. So 1.2 megawatts will go up to almost 5 megawatts with additional capacity also in Conrad and Arantara. In absolute number, if I had to answer your question, will be about $1.5 million saving every year, roughly about 2.5% of Maldi's EBITDA without any upfront CAPEX. So our results will be future-proof, portfolio exactly for these kind of diesel shocks. I hope I was able to answer your question.

Yeah, thank you. Thank you, Srinivas.

Also, I forgot to tell you, Raya, once we put in the solar, will be one of the first resorts in Maldives. It will run without generators for 17 hours a day. This will be the first one in Maldives, in my view.

Thank you. The next question is from the line of Anuj Upadhyay from Investec. Please proceed with your question.

Hi, thanks for the opportunity. I just want to check on your Sri Lankan property. I guess that the commission has been delayed by two or three years. In our previous presentations, the timeline was mentioned as FI28 and the current one, it mentions around FI31. Just want to get a sense of what's actually happening out there.

So, yes, this is the announced plan of 73 villas in Arangambay. It is a rich carton reserve, the second one in our portfolio. I will answer your question, but I want to give you perspective. Rich carton reserve is only the 10th in the world. It's a unique property. What we are stuck right now is a little bit on the… Front of permissions, because there's environmental sensitivity, since we have about 1.5 acres of shoreline, and one side is the Yala National Park. I think we are just at the verge of getting the completions and all the formality is past us. Once they are done, I think the targeted timeline is around F530.

Okay, okay.

And quickly on Maldives again, so we understand that Q1 had an issue. Just want to get how things are moving in July and the early inquiries of August. Are these in line with Q1 or slightly better?

Early for me to say, like I said, our KPIs are being placed in Q1 also. Both are occupancies and rates. It's just that the EBITDA is taken a hit because of diesel cost. This totally, you know, I continue seeing occupancy being quite strong in this quarter as well. I can't tell you anything about the EBITDA margin at this stage. It will all depend on the whole situation.

Thank you. But business on books is strong.

What I can tell you is my quarter three and quarter four is looking extremely strong. Thank you, sir. That's healthy.

Thank you. Ladies and gentlemen, that was the last question from the participants. I now hand over the conference over to Mr. Ranjit Padra for closing comments. Over to you first.

Thank you for all the questions.

To summarize, Q1 showed real underlying resilience. The reported EBITDA decline was almost entirely a fuel-driven cost event. This is definitely not a loss in momentum for Maldives. India delivered a strong occupancy and rate-led quarter. Maldives held revenue share against a softer market and are annuity business stable and with high margins. Our solar program in both India and Maldives will address the negative impact from power and diesel pricing volatility. Starting next, talent layer. Alongside this, the Ridge Carton Reserve, Shadri Hills, adds a marquee wellness resort and branded residence opportunity. Our pipeline remains on track, and our balance sheet gives us the flexibility to fund this growth through internal accruals. I want to thank our team across India and Moldis and our corporate office and our operating partner and all of you on the call for your continued support. We look forward to speaking to you again next quarter.

Thank you once again and have a nice evening.

Thank you. On behalf of Ventiv Hospitality, that concludes this conference. Thank you for joining us, and you may not disconnect your line. Thank you.