Royal Orchid Hotels Limited (ROHLTD) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q4 and F526 post-earnings conference call of Royal Lockett Hotels Limited. Today on the call from the management team we have with us, Mr. Chander K. Balji, Chairman and Managing Director, Mr. Arjun Balji, President, Mr. Keshav Balji, Executive Director, Mr. Amit Jaiswal, Chief Financial Officer and the Finance Team. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risk and uncertainties. Also, a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the period ended March 2026, the growth plan and vision for the coming years, post which we will open the floor for Q&A. Over to the management team.

Good afternoon, ladies and gentlemen. Valued shareholders, investors, and partners. It gives me great pleasure to welcome all of you to Rawalakit Hotels' Earning Call. Rawalakit Hotels is not simply growing with Indian hospitality industry anymore. We are now building capability, scale, and execution strength to shape the future of it. Over the last few years, we have transferred ourselves into a far more agile, disciplined, and future-ready hospitality company, one that is driven by profitability, operational excellence, and sustainable expansion. Today, Royal Oak Ridge stands stronger than ever before. Stronger financially, stronger strategically, and significantly more scalable for the future ahead. FI26 is a year of strong momentum. FI26 has been a defining year for all of the hotels. Despite the highly dynamic market environment, we deliver strong growth. While maintaining financial discipline and operational efficiency. On a consolidated basis, for FY26, revenue from operations increased to 384 crores from 319 crores last year. EBITDA stood at 110 crore. reflecting the resilience and efficiency of our operating platform. Profit after tax reached 33 crores after exceptional items. Earning per share stood at 11.74 crores. But more importantly, these numbers reflect the quality of our business model. Our growth today is being driven by sustained demand across business and leisure travel, increasing contribution from managed and revenue-shared properties, stronger ancillary revenues, and disciplined execution across the network. This is not accidental. This is structural growth. This is scalable growth. And this is a profitable goal. Building a stronger hospitality enterprise, as chairman and managing director, what gives me the greatest confidence is not only our performance today, but the foundation we are building for the next decade. Royal Locker of Health today has a stronger balance sheet, an improved operating leverage, expanding brand visibility. and a significantly larger strategic pipeline. Our consolidated asset base has now crossed 1041 floors, reflecting the scale and strength we are building into the organization. At the same time, we remain deeply committed to disciplined capital allocation, sustainable returns, And long-term shareholder value creation. In line with this confidence, the board has recommended a final dividend of 2.5 rupees per equity share. This reflects our belief that our growth and shareholder value must move together. Execution is becoming our biggest differentiator. In hospitality, strategy alone does not create leadership. The launch of Iconica Mumbai is not just another addition to our portfolio. It represents our ability to execute faster. Optimize investment intelligently, operationalize efficiency, and create high-quality hospitality assets with precision. This capability becomes a major competitive advantage for us. Across our brand, Regenta, Iconica, Castoria, Zee, and The Place, our approach remains very clear. We are not pursuing expansion for Edelan. We are building a portfolio that is profitable, scalable, differentiated, and resilient across market cycles. India's hospitality option is just the beginning. India is entering one of the most exciting hospitality growth cycles in this history. Domestic travel is accelerating, aviation connectivity expanding rapidly, corporate mobility is changing, and customer expectations are shifting decisively toward branded, experience-led hospitality. Royal Oxford Hotel is statistically positioned at the center of this opportunity. Our diversity, choice, presence, business hotels, leisure hotels, life-size properties, and money hotel. Gives us both reach and resonance. Today we are operating 80 cities, nearly 11,000 keys, including signed hotel. We are steadily building one of India's most scalable hospitality platforms. Vision 2030, building an enduring institution. Our ambition for a future is bold, extremely clear. By 2030, we aim to reach, try to 345 hotel, grow to 22,000 keys, strengthen our asset line with this model. Deeply integrate AI and technology into operation and build stronger connected loyalties ecosystem through Regenter Awards. Our numbers, our larger vision is even more important. We are building all of the Rotten to become an enduring Indian hospitality institution. One that combines warmth, operational excellence, design intelligence, customer trust, and long-term value creation. Over the years, I've learned that great institutions are not built by speed alone. They're built through consistency, discipline, strong relationship, and ability to evolve ahead of the market. This is exactly what Royal Octet is doing today. We are growing with confidence, we are executing with discipline, we are positioning ourselves for a significantly larger future. To our shareholders, investors and partners, thank you for your trust and your support and your continued belief in Royal Octet. I can say this with complete conviction. The next phase of ROI will be bigger, stronger, and far more valuable than anything we've built so far. We are only getting started. Thank you.

Thank you. All those who wish to ask a question may use the option of raise hand. If you are unable to do so, please drop a message in the chat box and we'll invite you to ask your question. We'll take the first question from Skrit Patip.

Yeah, good afternoon to the team. I have two questions. My first question is to Mr. Balaji is, what type of strategic levers is Royal Hodgkin prioritizing in FY26-27 to expand its portfolio beyond the 120 plus hotels while managing risk from regulatory changes, rising costs, and competitive pressures in the industry? What type of growth corridors are being targeted for the next six to nine months as the company adds 1800 plus keys and how is asset light expansion being balanced with own property? That's my first question. I'll ask my second question after this. Thank you.

One of the things which we are doing is that we have an upcoming hotel pipeline, which are signed hotels. There are a large number of hotels. There are 52 hotels which are signed and comprising of 3,600 rooms. And we have weaved up our development team also now. So they are going around scouting properties. What has happened is over the last two, three years, people are also approaching us. It was the other way around earlier. That, you know, we had to chase people, introduce ourselves, that we are all of the hotel. We are based in Bangalore. All the other chains are based in Delhi and Bombay. So we had a greater reach. And now with our Bombay hotel, we have a good reach. And in Delhi also, our hotel in Burgaon is doing pretty well. So I think our reach has, you know, our brand is getting to be stronger and stronger. And so I think the growth should continue on this asset-like strategy. Yes, out of the most hotels that we have, a large number will be managed. A few will be franchised. And a few will be on revenue share, let us call it, as a flexi lease. You know, we pay a minimum guarantee and we take over the hotel. So we're going to expand on all the funds.

Thank you. My second question to Mr. Amit is, what type of financial frameworks are being applied in FI 2027 to align debt majorities and refinancing schedules with project cash flows given consolidated part of about 25.11 crores for nine-month FI 26? Thanks. What type of instruments and safeguards, including, you know, maybe hedging models, escrow structures or liquidity or whatever, whatever you might have planned, I've been, uh, Our plan for deployment over the next two to three years to secure execution, discipline, and protect margins. Thank you.

Okay. So I would like to throw some light on our balance sheet. Okay. If you really look at our balance sheet published yesterday. Our cash equivalents is around 88 crores in our consolidated balance sheet, and this excludes one of our associates whose results we don't, you know, consolidate, just the profit we consolidate below the line. So, there also around 14 crores of cash equivalent is there, which means the group is having almost 100 crores of cash equivalent today with us to, you know, lead the company forward. Second thing, if you look at our borrowings, actually, the bank borrowings is around 91 crores, including the 45 crores of the new Iconica Bombay. So we are not that great borrowings which we are having. And we are planning to use the funds for the further growth of the company. We can become debt-free even today also in one shot. But there is a plan that we will grow the company. And as Mr. Balji already said that we are following an asset light strategy wherein we sign hotels on management and then there are some flexi leases. So we will be needing some funds for all these flexi leases, okay, whereas we don't hold any asset. So the kind of funds what we have, it's quite sufficient for the company to grow as per the target what we have done in our projections.

Thank you and best wishes.

Thank you. We'll take the next question from Bharat Jeenad. Bharat, you can go ahead.

Yeah, thanks for the opportunity. Sir, two questions from my side. One is, what was the impact of the West Asia crisis in Kharapur, and especially related to the iconic of Mumbai property, since that is very close to one of the biggest airports in the country? So that is the first question. And the second question is, considering the growth plans that we have highlighted, just wanted to understand the medium term guidance, if any management would like to highlight for, say, for October 27, 28 on the revenue and the EBITDA side.

Okay, Varadji, good afternoon. Good to see you here. Let me tell you one thing, Varadji. See, we had a lot of plans, you know, like we will be adding a lot of revenue share hotels and all. But as far as the guidance is concerned, keeping the geopolitical issues in place, how it is going, it has become very, very difficult for us to give any guidance. However, we are pledged to improve our performance. Okay. This year, if you numbers, if you see, that's why I have given the numbers with Iconica and without Iconica also. Iconica being the first year, there were the one thing which has hit us is the, you know, the India's 15, 16 crores India's hit has come, which is notional and which is not in cash. However, you know, the growth, the PAT growth without Iconica has been around 16.8%. Okay, the PAT growth, excluding Iconica. But because of Iconica, first year, we have been hit, the PAT has been hit because of the India's 15 crores. But we are on a growth path. However, last one month post-war, definitely the business has got hit. The ADRs is in challenge, the occupancies are in challenge, and it continues to grow, you know, it continues to be the challenge like that. So, unless and until these geopolitical issues, you know, come to a, you see in newspaper every day, the cost is going up, this cost is going up and all. Even in today's Bangalore, if you see Times of India, Bangalore, there's a big article on the cost going up, an increase in the labour wages and all the stuff. So, keeping that in view, it is very difficult for us to give the guidance what you are asking. However, after the first quarter, we will be in a better position to give you a guidance what we will be doing in 27-28. But be rest assured, the company is in the growth path and we will continue to grow the company the way we had planned.

Okay, so thanks and all the best.

Thank you. We'll take the next question from Chirag. Chirag, you can go ahead.

Yeah. So, my first question is on this 5.5 crore write-off that we have taken pre-op expense write-off in Iconica. So, was this fully taken in Q4 or this is for the entire year?

See, what happens, Chirag? See, in the quarters, the auditors do a limited review. So, at the year end, they do a full audit of the entire year. So, they had done all the transactional audit for the entire year. And it was found that around five and a half crores of, you know, pre-operating expenses, which we thought we can capitalize it, but they didn't agree. So, we had to take that date.

So, there was one more write-off of two crores that we have taken in Q2. So, for the entire year, total seven and a half crore is the write-off.

Three operating expenses. Q2, we had taken it ourselves, but when the complete audit happened, the alters were in disagreement, so we can't go against the alters, so we took the hit. However, it was in capital in nature, but not strictly capital, that's what their view was there, so we had to take the hit.

So, are all write-offs taken, you know, whatever are there or there will be further review next year and there will be some more write-offs?

It's all taken. It's all taken. This was the first year of Operation Chirag. So, we had to, you know, do all this.

Okay. And what was the occupancy of Iconica during Q4?

So, the occupancy of Iconica during Q4 was around one second. I'll just tell you. 62%. 62%, yeah. So, the occupancy of Iconica was 62% in Q4. See, Jan and Feb went off very well, but there were a lot of cancellations in March. March, when the war began, there were a lot of cancellations were there in March.

So, what was the occupancy in Jan and Feb, if you can...

Jan, Jan was, I think, around 80% was there. You must tell me the genuine favor of this.

So, Jain was ATN. What about Fab?

I'll just tell you. I think 75. The favours are on 73 percent.

Okay. Okay. One question on managed hotels. So, you know, recently we opened a 70-key hotel in Hyderabad. So if I take, you know, some assumptions for ARR and say around 60-64% odd occupancy, maybe this hotel would generate 40-50 lakh in top line. And as in our share, whatever 4-5% management fee that we get. And if you take 50% dot bottom line that you have guided for, for the managed segment, it comes to 20-25 lakh for this hotel. So why are we still taking up small managed hotels? I mean, isn't it better to set a minimum threshold now since we have this?

I think I can take that. Yeah, so look, I fully agree with you that small hotels will not be the way forward for moving the needle. But it's a portfolio strategy. You know, basically, we have the Regenta brand, which will be typically 80 keys and 6080 keys and upwards. The Regenta place brand, which is what this hotel opened under, which is going to be typically 40 to 80 keys. And Z by Vegetta, which is primarily we're going to grow by Franchine, which is around 50Ks on average. So, while you are right, we have set minimum thresholds, by the way, so the numbers that you are suggesting on a per month basis is actually going to be maybe double of that on this hotel especially. But there are per month thresholds that we have set as minimum fees from each hotel, which is going to be increasing every year. If you Look at the pipeline that is coming up, and I advise you to look at the pipeline screen on the presentation that we shared with you. A lot of those hotels are larger now. So we are looking at signing bigger hotels as well. But keep in mind, it is a portfolio strategy. In a city like Hyderabad, we will have six to eight hotels, maybe even 10 hotels in the period of two or three years. So we will have a combination of slightly larger hotels, smaller hotels, etc. But what we are doing to increase the top line as well as the bottom line of the company is taking In flexi leases, what the chairman mentioned as well. And these flexi leases are at a lower investment, but they will allow us to increase our top line as well as the bottom line. So I think it's a combination strategy. You'll find it playing out quite well. And I think the numbers will start to showcase now that the operating leverage will start to kick in because we've got a lot of hotels in certain clusters where we will not have to invest substantially more to add more properties.

See, these marriage copies, you're right, will give you a small, but it's a matter of scale. If you really look at it, all companies are not looking at that. Taj is looking at expanding, you know, Ginger. Then Merit is looking at expanding, you know, other smaller brands. Illidan is coming with Spark. By Hilton. So I think what strategy we've been adopting, now others are copying that. So I think, you know, we are well placed here. Our risk is very little. So it's a matter of scale. If you have 100 hotels giving you 3 to 5 lakhs per month. Then it adds up to a lot. And the GOP gross operating profit on that is substantially. So we are at the takeoff stage as far as this business is concerned. And we will continue to grow that.

Okay. Okay. That would be it from my end. Thank you.

We'll take the next question from Udit. Udit, you can go ahead.

Yeah, good afternoon, sir. Sir, we see that we are doing a lot of efforts in expanding our, you know, hotel base. From when can we see the actual inflection in numbers, you know, on the cash level as well as the PAT level? So, see, if you really look at it, the cash level, you can see the growth is there. We are doing 60 crores plus cash at the cash level. But PAT level, PAT level also, this is the first year of our, the bigger hotel that is Iconica, okay, which has added some notional cost of India's into the financial. That is why our path, what we are seeing is down, okay, because of the India's effect of almost 16 crores of one hotel, which has come. So, if you see our results without India's, yes, I will not say that we have grown a lot, because, you know, last month became a very disaster for the entire industry. But we are in a growth path, and definitely in the coming years, you will see a better result.

So, can we see like the cash pat going up to say like 100 crores by FY28?

Cash pat by 100 crores?

I don't think we should give any statements like this. At this stage, because of this uncertainty in the world, I will refrain from giving any forward-looking statements.

Okay, sir. Thank you. That's it for me, sir.

Thank you. We'll take the next question from Rahul Pangadya. Rahul, you can go ahead.

Yeah, thank you for taking my question, sir. Just wanted to understand this Iconica number as kind of reported in the thing. The without index number that, sir, you have reported from Q1Q basis, roughly a 17 crore top line goes to a 24 crore top line. I'm just rounding off the numbers here. But the swing on the EBITDA side is negative even after account is not that great, even after accounting for that five and a half crore hit that you may have taken. So, you're essentially moving from a 1 crore negative EBITDA to a, let's say, EBITDA break-even situation. For a Q on Q swing of almost 7 crores of top line, we would generally assume in this business with fixed costs, the swing on the bottom line should be much higher. Just trying to understand this now.

No, see, Rahul, I'll tell you one thing. First year of operation, we are also a new market, Bombay market and all. So, what has happened is, there are a lot of marketing expenses which would have incurred. The real result of that will come in time. Okay. So initially, when you launch a property, you know, launching expense, and then the marketing expense, then there are a lot of stuff which has gone. That is why you are not able to see in Iconica a very favorable EBITDA. But, you know, a big property of almost 300 rooms with so much F&B and all, so unless we launch it with, and all these launches cost money, unless we launch it in a big way, we will not be able to see a big result. See, every day we start seeing at the profit and all. So then we will not invest. See, technically in accounting standard, these all expenses, what we have done in first six months, can be termed as operating expenses. But if you really ask me, in a business sense, it is not an operational expense. It's an investment which we have done in the property which will yield the result in time to come. That's the logic I can give it to you, Ram.

See, when we started the hotel, actually, November is the time when we got our license, our bar license got in November. So till that time, we were just operating like, you know, just like trial runs, we were doing that. Then we were hit by, you know, this Airlines chaos, Indigo chaos. Yeah, although the thing lasted only a couple of days, but, you know, there are fear factors there, so occupancies across the group went down for about almost 15 days. So I think that is also caused, and then to add to it, all this war issue has started, and there will be a lot of cancellations for fear. So I think, you know, we hope that all that is now behind us. But then, you know, right now, if you look at it, the season is over. You have the winter season and the summer season for all hotels. So, we are now tightening our beds and making sure that in the summer months also. We don't hit any, you know, handwaves. So, we are working on that. I think everybody is aware of the fact that this, yeah, you're right, that a new hotel will take some time.

Too stable. I just want to give one point is that the hotel is hit number one on TripAdvisor in Mumbai out of over 800 hotels, which all of you can also verify. Yes, that is really commendable. That's a good sign that good things are coming. I just wanted to point that out.

Yeah, sure. You know, I understand that some of the things are really and in the last six months, there have been quite a few things that are really completely out of the control, Whether it is the Antigo Fiasco or the war situation, completely out of the control of anybody who is operating the hotel industry. So, yeah, all the best, sir, for everything that you do in the future. Thank you.

Thank you. We'll take one question from the Q&A box, which is from Mr. Raju Pathak. This is regarding the auditor's qualification mentioned.

I'm answering it. I'm answering it.

Yeah, if you could answer that. Should we take the next question in the meanwhile? Yes, sir. Yeah. We'll move to Tanya Kalra. Tanya, please go ahead.

Thank you for the opportunity. So, my first question is that what percentage of future EBITDA does the management expect to come from fee-based management income?

You're talking about this coming financial year or you're talking about in the future, like four or five years down the line?

In the future. In the future.

I would say it would probably be a third of our total, but, you know, it does depend on how many flexi leases we sign. We are, you know, obviously, I mean, the idea right now is that for every 10 hotels we sign, one would probably be a flexi lease, maybe two would be a franchise, seven would be management. That would be the rough sort of cadence that we have, I mean, the split that we're thinking about. But obviously, in the flexi lease, we take 100% of the economics when it comes to revenue. And then of course, you know, our EBITDA numbers are different there. So at this point, we would assume that, you know, because we have some of our own hotels, we will be growing the JLO segment. You know, the EBITDA calculation will be somewhere one-third to half. But I mean, it is going to be tough to tell. It depends on how much we sign up in the next three to five years.

Okay, so my next question is, what is the plan to keep its outlay for FY27 and FY28?

Kapex, as we have mentioned, our business model is very, very, you know, asset-like. So, we don't anticipate large Kapex, only in the revenue share hotels, which are, I can see about five of them coming up in the next one year. There may be something coming up, which is under discussion, but at the moment, which is signed, only about five. Those do not require more than five to ten crores as a capex. Which company has the money, it doesn't have to resort to any borrowing or anything like that. We have a war chest as Mr. Amit had mentioned that we have bought over 100 crore cash within the company. So, I don't think we require anything. We won't be short of expansion.

There is some CAPEX, which is more maintenance CAPEX and also renovation CAPEX required for a couple of our existing owners. So, that is ongoing. I think we had already announced that in the past. And that is ongoing, you know, renovation as in when we can, you know, refurbish or renovate some rooms to keep them current. So, that is additional.

Most of it, you know, for example, a resort in Bangalore, we added 28 wooden cottages. We did it through our internal, we had a loan sanction of 15 crores for that. But there was enough surplus available in that company. So we did it through our internal resources only. And now we are taking up the Vancouver halls and the restaurants there also. Hopefully, we should be doing through our internal resources, and of course, if there's a larger capital investment required, then we may resort to taking some loans from the banks, which of course, most of our companies are now debt-free. So I think banks are more than willing to come and lend us in those companies. So I think that on Capex front, we don't have any worry unless we have another opportunity like a revenue share, which is a large opportunity like Iconica, which we have. But we don't see that in the immediate future right now.

Okay, so one last question. Can you share the EBITDA margin levels for mature properties versus for the newly launched hotels?

See, the EBITDA, we have given one presentation. If you really look at it, the slide, I will tell you the… Slide number seven. Which is the slide we have given, with Iconica and without Iconica.

I think it was said.

Yeah, if you see, Tanya, if you look at the slide number 7, what I have done is that I have given you the financials of Raw Lockheed Consolidated, I have also given Iconica separately and the existing property of Raw Lockheed Other Hotel. So, if you look at the EBITDA of Other Hotels is around 103 crores, okay.

Thank you.

Okay, and so there I have given us separately. Other than Iconica, the EBITDA was 103 crores and Iconica EBITDA was 7.3 crores. And if you go to slide number 19. In the slide number 19. So, I have given the separately the managed hotel performance also.

Okay. That's it from our side. Thank you. All the best.

Thank you. We will take the next question from Anugav. We can go ahead.

Hello. Yeah, am I audible?

Yes, yes.

Okay, so my question is, when do you expect Iconica Mumbai to become a profitable at the pad levels?

This year itself. So, as far as PAT level profitable is concerned, it will be profitable in 26-27 itself. But the India's, you know, there is a provision which comes because of India's. So, we'll have to evaluate that also in this year. Probably this year also PAT will be negative and maybe in 27-28 we will move to a profitable position. The notional India's if we remove.

Okay, and my another question is, is room rate growth coming mainly from better pricing or because of more premium hotels in the portfolio?

Come again, Anubhav, I couldn't hear you.

Okay, is room rate growth coming mainly from better pricing or because of more premium hotels in the portfolio?

No, no. See, if you look at our slides, I have given you the pricing also. So, we have done a considerable growth as far as the ADRs are concerned. The average rate has grown in our presentation, I have given. So, from 5,800, we have grown to 6,000. And occupancy, however, the occupancy remained the same as per last year. So, occupancy would have grown a notch above had the market not hit because of the war. So, in the current year, it is very difficult. However, we are looking at a growth in the ADR, but occupancy depends on the market scenario.

Okay, sir.

Thank you. Thank you. We'll take a follow-up question from, uh, Chirag. Chirag can go ahead.

Uh, what's the occupancy for Iconica in the current quarter? How is the, uh, trend looking like?

In the current quarter, we are doing 81% occupancy, Chirag.

Is this the current occupancy or average so far?

No, no, April and May I am talking.

Okay, all right. Thanks. We'll take one question from the Q&A again from Amit Kumar. What is the share of international travelers in the Royal Orchid guest mix and what would be the same for guests from the Middle East region if you track this data?

See, as far as the international travelers are concerned, I have given you the figures, detailed figure in the guest breakup list, if you really look at it, 26, 30,000, which means almost 19 percent guest were international travelers, as against 80.8 percent guest is the domestic.

This question is, do you have data, how much of this would be from Middle East, the international travelers?

Middle East data is very difficult to say right now. We don't have the data, but how much?

Sorry, Arjun Balji here. I just want to... I like it isn't so much as the Middle Eastern travelers as much as the market share of Middle Eastern flight arrivals into, you know, India. And you've got most of the travelers kind of connecting through the Middle Eastern carriers. And just remember that the Middle Eastern carriers had close to a 40% market share of inbound into India. So that I think is a That is what was disrupted because of the war.

Okay. Thank you. We'll take the next question from Bharat Jiran. Bharat, you can go ahead.

Yes, sir. Thank you for the opportunity. So just wanted to check on slide 24 you have given the upcoming pipeline, which says that 52 hotels and about 3600 keys approximately. So just wanted to check out of this pipeline, what would be the key count of revenue share? I can see that there are five properties on revenue share. So what would be approximate key count that you're looking at revenue share? And if you can provide the timeline for the same, I think.

It's very difficult right now to say that because, you see, what happens is the revenue share projects, the control is not in our hands of the date of opening and the quality of the product we do monitor. But sometimes what happens is that the owner has the final say. He may have some constraints in terms of this thing. So at this stage, we won't hazard a guess.

We've got about 522 keys on revenue sharing, which is what we have disclosed. Roughly, that's what it is. Okay, thanks.

Faradji, around 500 and odd keys will come in revenue share. And we are hopeful that that should come within this year. But as Mr. Balji rightly said, you know, they are on the construction stage. So, when it will come exactly, very difficult to say.

Unfortunately, construction also has been relatively disrupted due to the war. A lot of the costs have gone up. So, there is some slowdown in construction in general. I'm not saying specifically to our hotel, but in general. So, we could anticipate certain impacts, you know, a few quarters down the line, which is what we are, that's why we are not hesitating against as to the opening dates due to that.

Like there's been a problem in sourcing tiles from Morbi because of the LPG crisis, so one of the projects had got delayed because of that. So there will be various factors. So I would not like to give you specific dates of what will happen, but we are doing our best.

And whenever we open the hotel, we do an announcement.

Okay, okay. So just a general feedback, if you could, you know, in future, give a key wise split and, you know, expected announcement. Obviously, I understand that this situation is a bit different. But in a normal course, if, you know, you can incorporate that things in the presentation, that would be of great help.

Key wise, we can give, no problem.

Okay, sir. All the best. Thank you. We'll take a follow-up question from Rahul Bangadir. Rahul, you can go ahead.

Rahul, if you could just give us a sense on the subsidiary numbers, which is in the managed side of the business. I think last day we had some 38 or 39 crores of top line there. What is the number for FY26?

He choked, uh, Regenta tells 5 million.

One second, one second. One second, I'll just do the number.

Yeah, yeah, yeah.

There is approximately 42 curves. Let me just put a little bit.

So, there we have done a top line of almost 55, 56 crores.

Okay, and what would be the profitability there, sir?

Because that's around 20 crores the profitability.

20 crore is the PBT number?

No, 20 crore is the EBITDA number, and after that we transfer 5% as the brand fee to the parent company. So the PBT number is around, you know, 17 odd crores.

Okay. So that business has really turned out well in the sense that from what we saw three years or four years back when it used to be a 15-20 crore top line.

Yes, absolutely. Absolutely.

That 15-20 crore top line has now become a 55 crore top line with actually a bottom line of almost a PPD of 20 CR. Two and a half crores being transferred to the parent is a different issue, but I'm saying it's a 20 CR PPD.

Yes. Yes. Yes.

Okay. Okay.

I think it will grow further, Rahul, as we add, you know, so many hotels which are there in the pipeline, if we add, it will grow further.

Okay, then maybe it's worthwhile thinking, sir, of kind of, I don't know if there is a situation to unlock that value somewhere, because that I am assuming it's going to be a very high ROC piece with no major capital requirements at all, because it's a managed piece.

Yes, definitely.

Great. Thank you so much. Thanks.

Thank you. We'll take the next question from Majid. Majid, you can go ahead.

What do you call, sir?

Yes, sir.

Thank you so much for the opportunity. Sir, my first question that I have is, Major Lee, what has led to the divergence in occupancy between JLO and managed hotels? I think the occupancy looks higher in JLO and...

The managed hotel, what happens, Mr. Majid, is that there will be a lot of hotel which you would have added in the current year. Okay. So, those hotels, see, any hotel when you open, it takes little time to, you know, to grow the occupancy. That is why, if you really look at the existing hotel, managed hotel, which were existing last year also, they are doing well. They are in the 60, around 67, 68 percent occupancy. But it's the new hotel which has just started. So their occupancy averages out the hotel occupancy. That's why you're seeing at 62%.

Some of the hotels, managed hotels are in resort locations or leisure. So by nature, the occupancy of those hotels will be seasonal. So it won't match the city hotels.

And so secondly, regarding the FNB cost, we have seen some kind of spike from 27 to 30% this quarter. So going forward, how are we looking? Because the pace of growth has also moderated in FNB revenues and the cost has gone up. So how are we looking to manage that? Do you see the pressure is expected to exist?

No, no, Majid, if you really look at the F&B cost, you know, it has gone up because of the new hotel Iponica, which we have opened. Okay. So, some, as you rightly said, those write-offs were, a lot of F&B was involved. If you really see the, you know, write-off, as earlier we discussed, five and a half crore pre-operating expenses. So, a lot of F&B costs were there. That is why you have seen. Otherwise, we will be hovering around that percentage only what we have been doing.

So, is it an inventory rate of F&B Sigma and what rate of inventory goes?

Yes, yes. Iconica, we opened 290 keys in the hotel in Bombay.

Got it, sir. And so then, recently, we have made a Hilton partnership. So, when do we expect any kind of opening or any timeline, sir?

Yeah, that's a long-term 10-year partnership for the Hampton by Hilton band in six states in India, where we are going to be opening about 125 hotels with them. But obviously, keep in mind, these hotels are going to be signed, you know, this year onwards, and therefore, they'll start to open in a phased manner. But, so yeah, so we'll be happy to, you know, give you the announcements when we have the first Hampton sign, but we are working on it. And we do anticipate some signings in the current year as well.

Sir, if you can give some ballpark on how many keys or how much hotels are we looking this year?

Yeah, you know, honestly, like, because we've just signed the contracts with Hilton, we're in the process of rolling this out. We will definitely come back to the investors with a more, you know, concrete business plan as we roll out our first property with them. Because we'd also want to understand the entire life circle of signing a property, opening a property with them. before we kind of know exactly how we're going to ramp up. Also, we're getting market feedback, etc. So it would be wrong for me to give you an exact ramp up, unless we, you know, do a little bit of the homework there, which is ongoing, it's happening. And we'll come back to you very shortly with that. But like I said, there will be a couple of signings this year that you can expect. Typically, the average Hampton hotel will be somewhere around 75 keys. So that should give you some sense. But like I said, I cannot hazard I'm going to forecast much more than that as of now.

Thank you. We'll take a follow-up question from Chirag. Chirag, you can go ahead.

Yeah, thanks for the follow-up. So on managed hotels, you mentioned 55 crores top line for this year and 20 crores EBITDA, correct? So this is flattish if I compare the last year numbers. I think last year we did 53-odd crores total income. And the EBITDA would be around 2021 crores. So what is the guidance for FI27 for managed hotel since we are adding 5600 keys every year?

See, as of now, it looks good only. But as Mr. Bali also rightly said, and seeing the scenario, okay, you know, the way things are going, okay, it is very difficult right now to make a comment. And I told you earlier that it's only after the first quarter, I'll be in a better position to make any comment on that, how the business moves and all.

Right. So, any particular reason why the numbers were flat? So, we added 5600 keys in F526, and our ARRs are slightly up. Occupancy is similar to what it was last year. So, if you could provide the breakup of this 5600 keys, like how many keys opened in first half of the year? How many keys opened in the second half of the year?

No, I'll tell you...

It's difficult. It's difficult at this stage. When I say a lot of those projects are coming up, and like I know one project is coming up in Surya's work that comes totally to a standstill because of non-availability of the tiles from ceramic tiles from mortar. It's great to say that some people run into financial problems because that's not our call. We help them out in, of course, with our connections with the bank. We helped certain people to raise money from NVFCs and financial institutions. We're very happy to give those to the owners. But I think at this stage to give a relief prediction is very difficult because of the uncertainty of the dates in which they'll open. And some hotels are opening much faster than what we anticipated. Tirupati Hotel is going to open next week. So I suppose with God's blessings, our company should grow faster. And one more hotel in Kota is going to open very soon. And Kota is always in the news because of the number of students which are walking there. So I think sometimes hotels open, like Hyderabad Hotel is going to open very shortly. So these are some of the things which I think about 7-8 routers are going to open. Within the next two, three months. So, sometimes it goes slow and sometimes it's really acceleration.

This is a good year for us in terms of openings, substantially more than last year. So, I think when you look at it from that perspective, definitely the numbers will start to, you know, get better once the openings come in as well. We also anticipate towards the end of the year some, you know, upswing coming from, you know, also the signings from the Hampton portfolio, etc. So, I think we are positive. We think that we are very well positioned for this business. There is some, I would say, restructuring on the portfolio also that we are planning, where we would like to have minimum fee thresholds for hotel, minimum key counts, those kinds of things as well. So, we're doing all of that. I think hopefully, you know, we will see much better performance from this division going forward and be very positive on this division as well.

Is it possible to just quantify for FI27 based on whatever hotels, you know, you have opened in FI26? Because in 26, if I compare it with 25, the numbers are flat. So I understand that how many hotels, you know, you're going to sign in 27. And I mean, on that front, it's difficult to give some estimate. But whatever hotels you open in 26, right, because clearly there is no contribution on the top line or bottom line for 26. So, what is the bare minimum growth that one should expect in this segment for F527?

See, Chirag, as we said earlier, unfortunately, due to the war situation right now, we are restraining from giving any, you know, guidance in terms of numbers for each division or the company as a whole in this call. Unfortunately, that's something we are unable to do because keep in mind that, you know, the situation is quite fluid, you know. And so we are getting impacted in various different ways, which we are not aware about right now. That being said, we believe it will be a better year than last year. We believe that we're working hard towards it. We are adding more hotels, regardless of what happens, we're adding more hotels this year than last year. That's all that we can say right now about the market impact, given what's happening in the war, and it's not yet ended, etc. So we don't exactly know what, we can't give you a very, very concrete number. But we don't want to give you something that we will then walk back next quarter.

This new labor code and the fuel prices have added to this thing, and the labor code expenses are very, very high. And, in fact, today, there is a news article in the Bangalore paper that they are planning to increase the minimum wages. And if they do that, it's going to be a disaster for the hotel industry. So, I don't know what the other states are thinking, but, you know, we all need to look at a situation where how do you manage the costs because you can't keep on passing on the... You know, cost increase to the customer because of the lot of options the customer today has. So I think, you know, we are in a very, very turbulent times. So, but then I always tell my team that if you could sail through COVID. Then we can sail through any sort of, you know, crisis. So we are working toward that so that, you know, we can deliver value to our partners, stakeholders or partners, we can deliver that.

Okay. That would be it for mine. Thanks and wish you all the best.

Thank you. Thank you. We'll take another follow-up question from Rahul Bangadi. Rahul, you can go ahead.

Yeah, thank you. Once again, just a question on the Hampton bit. Now that we have signed that this thing, just a question on whether it becomes a part of that overall map of 20,000 plus rooms? Is this over and above that? And if you could just tell us if it is a technical structure, the structure here, is it a part of a subsidiary? Is it a JV? What is it exactly?

So basically, our management contract business, Regenta Hotels, has signed a strategic licensing agreement, right? So it's practically a franchise agreement. So for six states in the country, you know, where basically we will be able to go to hotel owners just like we're going today. To a hotel owner, we are offering the Regenta brands, or Iconica, or Questoria, or any of our brands. We can offer, also we can offer the Hampton by Hilton brand to these owners as an option today. So it's an additional option that is there. However, in terms of number of keys, you know, for the 20,000 number, the 345, this is very much part of our growth plan. You know. And we think that Hampton and Zeeba and Jenta, which is our, you know, our focus service brand, will sort of work, you know, complementary in certain markets. And that's what, any other questions I can answer if you want that?

Just a point of view, let's say Hampton 125 hotels are talking about. Hypothetically, let's say it's 75 and that becomes about 8,000, 9,000 room kind of situation. So I'm just asking whether that 8,000, 9,000 is a part of this 22,000 roadmap or it's over and over. That's the only question.

It's part of the roadmap. It's part of the roadmap. The 125 hotels is signings in a period of 10 years. That's what we are looking at. Of course, the number of hotels to open will be probably half of that. So over a period of 10 years. So just to give you some sense of how things will ramp up. But eventually the idea is to have 125 operational Hamilton by Hilton hotels. But that is over a period of 10 years. This vision 2030 is obviously a shorter horizon. Sure, sure.

Okay, okay, thank you. Thank you. Since there are no further questions, I would request management to keep their closing comments.

Well, it was nice to hear all of you and you raised questions which are very thought-provoking and it will motivate our team to see that how do we produce better results in spite of all the setbacks because every year there will be some new Google coming up and we have to be prepared for that. So, I think we are poised to grow very rapidly. That's the assurance I can give you guys. And with all your support, which has been there, thank you very much. And hope to see you very soon, the next concord.

Thank you. This brings us the end of product call. Thank you to all the participants and thank you for management for giving their valuable time. May all disconnect.