Earnings Call Transcript - XNSE:SAMHI 2026-11-04

Operator

Ladies and gentlemen, Good day and welcome to the Q2 and H1F527 Earnings Conference Call of Sami Hotels Limited. This conference call will contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to present. As a reminder, all participant lines will be in the listener 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 a touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Ashish Chappanwal, MDN CEO of Sami Hotels Limited. Thank you. I know what you say.

Ashish Chappanwal, CEO

Thank you so much. Good morning, everyone, and welcome to Sami Hotels' quarter financial year 27 earnings call. Thank you for taking time to join us today. I'm joined by my colleagues, including our CFO, Rajat Mehra. We also have our investor relations partners, strategic growth advisors, also on the call. We have uploaded our quarter two and H1 F527 financial results and investor presentation on the exchanges and on our website, and I hope everyone's had a chance to go through them. I'll start the call today by covering our performance strategy and pipeline, and then I'll request Roger to take you through the financial statements, and subsequent to that, we'll close with an outlook before we open for questions. Let me start with the headlines. Our same-store revenue grew by 12.6%. This is ahead of our long-term guidance of 9% to 11%. REFPA growth for the same-store hotels was up about 14%, and in this quarter, it was driven 9% by average rates and about 3.6% occupancy. For the quarter, our hotels ran at a 78.6% occupancy, up from 75% a year ago. We have now seen six months of near 80% occupancy levels demonstrating strength of our markets and our products. On 37% of nights in the quarter, our portfolio was above 90% occupancy, effectively sold out. A year ago, that figure was 32%. More compressed nights give our revenue manager more pricing power. Even though we have a high inflation environment with fuel prices and impact of currency depreciation on imports, yet our business did about 60% flow through in the reported quarter before accounting for loss of input tax credit. About 80% of the room nights we sold this quarter were to domestic travelers. Much of that demand is created locally by the offices, GCCs, and industrial parks around our hotels. The office offers this. Bangalore and Hyderabad, our two largest markets, together absorbed about 7.9 million square feet of office space on net basis this quarter alone, against 5.1 million square feet a year ago. Hyderabad alone more than doubled from 1.6 to 3.8 million square feet of net absorption in a quarter. Every one of those square feet became room nights, meetings, antennas, and micromarkets over the next several years. While the airline data shows declining passenger traffic for the quarter over previous year, but this is not a demand issue. With higher fuel prices, several routes are rationalized, and this is compressing the supply. In terms of pipeline-based business compounds, we are building the next leg of growth. Our secure pipeline adds about 1,670 rooms and moves another 473 rooms up market through rebranding. By FY13, we expect upper and upper upscale to rise from 42% of our income to about 60%. This is important because if you see the last six months, the EBITDA performance of our upscale hotel was almost 800 basis points ahead of the broader portfolio. So as we move the portfolio from 42% upscale to 60% upscale, it has a material impact on our reported EBITDA margins. I'll give you some updates on specific projects, starting off with a 170-room double hotel in Hitek City, Hyderabad. We believe it's a landmark asset in our pipeline, and now it is in the final stretches. MEP, Facade, Pitouts, all streams are making good progress. We remain on track to open in Q2 FY28. W will be one of the highest-rated products in our portfolio, along with Courtyard-a-Mired Bangalore, in one of the India's deepest office markets. On a stabilized basis, we expected to add about 10% to our FY27 income base at margins above our portfolio average, given our existing merit clustering in Hyderabad and no impact of GST regulation change, given most, if not all, rooms will be sold above 7,500 rupees rate threshold. The next is the Westin and Tribute Portfolio Whitefield, Bangalore, with 142 existing operating rooms and 220 rooms being added. The existing 142-room Trinity Hotel is being renovated in phases into a tribute portfolio by Marriott. The Westin tower site has moved from excavation in Q1 to basement construction in Q2, and each quarter, you will see the building slaps being added at a rapid pace. We are very bullish about the performance of this combined 370-room upscale hotel in a very strong market. The other upscale hotel at Inka Center, Noida, with 162 rooms, is also making great progress. The hotel is a part of 2.5 million square feet of mixed-use development with direct access to retail and offices. It is in a long-term variable lease, so our upfront capital during construction is limited. The project is now at second-floor slab and making rapid progress. Moving to Rare India, integration work for the pilot is at final stages, and they are targeted to go live on the outdoor collection by Married Bonvoy in this coming December. This gives Rare partners a global distribution they will benefit from. For SAMI and Rare, it is a fee-led platform that needs very little capital, and we'll start adding to our YOY revenue and EBITDA growth starting quarter one FY28. The excitement of this platform is that with efforts to keep adding hotels to this platform each year, we create a strong layer of non-same store growth without material capital expenditures. I will now hand over to Rajesh for the presentation.

Rajat Mehra, CFO

Thank you, Ashish. Good morning, everyone. I will take you through the C&L performance, the impact of the GST changes, and key balance sheet highlights. Our total income for Q2 FY27 stood at 342.7 crores, representing a year-on-year growth of 15.6%. Of the 45.6 crores increase in the asset income, 35.5 crores was contributed by the same source growth. New and acquired assets contributed remaining 10.1 crores led by the Trinity Bangalore and the Holiday Inn Expresses at Greater Noida and Calcutta. Consolidated EBITDA increased by 12% year-on-year to 123.8 crores with an EBITDA margin of 36.1%. Excluding approximately Rs. 10 crore's impact of the changes in the GSD regulation, which was not present in the base quarter of Q2 F526, comparable EBITDA would have been approximately Rs. 133.8 crores. This represents a year-on-year growth of 21.3% and a comparable EBITDA margin of approximately 39.1%. As the change in the GST regulation became effective in late September of 2025, the base quarter from Q3-FI26 onwards already reflects this impact. Beginning the next quarter, no GST-related adjustment will be required as the reported data will converge with the comparable data. The finance cost declined by 10.3% year on year to Rs. 38.3 crores, reflecting lower interest costs and improved credit profile. The depreciation for the quarter stood at Rs. 32 crores. Profit before tax and exceptional item increased by 39.9% year on year to Rs. 53.4 crores. During the quarter, we also recognized an exceptional gain of 3.9 crores from the sale of non-core land parcel at Fusor. The tax expense was 16.2 crores, was largely defer tax and non-cash in nature. Following the recognition of defer tax assets in F526, this asset is now being utilized as the company generates capital profit. Please note that in Q4 F526, we recognize deferred tax assets in our P&L. We expect similar recognition in Q4 F527 as well, which will have a positive impact on our reporting numbers. Pat for the quarter stood at 41.1 crores, of which Rs. 33.5 crores was contributed or attributed to SAMI shareholder. The year-on-year decline in the reported Pat was entirely attributed to the high base of Q2 FY26, which included exceptional gains of 84.1 crores arising from reversal of impairment on Navi Mumbai asset and sale of caspia denny. Profit before tax and exceptional item for H1 FY27 increased by 35.4% to 86.2 crores, while the PAT stood at 66 crores. Excluding the one-time exception in Q2 FY26, our PAT for Q2 FY27 grew by approximately 137%, which is more than doubled as against the same quarter last year. Turning to the balance sheet, the net debt stood at 1,458 crores as on September 2026, representing a reduction of Rs. 35 crores from June, despite continuous investment in our growth pipeline. Capital work in progress increased to 219 crores from 139 crores in March, primarily reflecting ongoing investment in W. Hezrabah and the Westin in Bangalore. Net debt to the trading 12-month EBITDA stood at 3.1 times. After adjusting for capital deployed in the growth projects, the ratio was 2.2 times. Our credit rating remains strong at A+. Our effective interest rate is approximately 7.8%, which is around 300 basis points lower than at the time of our IPO. Following the recent increase in RBA's repo rate, we expect the overall cost of borrowing to increase gradually. Free cash from the quarter was approximately 83 crores. After the cash interest payment of 35 crores, the cash and cash equivalents stood at 279 crores at the end of the quarter. With this, let me hand over to Ashish.

Ashish Chappanwal, CEO

Thank you, Rajesh. I think I'll pick up two points from Rajesh's commentary. One is on net debt and the other is on the finance cost. On the net debt, we have made a commitment to take it down to 2.5 times in the long term. The direction that we see as of now makes us believe that we will get into at least a two-handle. Either by the end of this fiscal year or early next year. So this will keep us ahead of our schedule to make sure that the balance sheet is at a stable state. The second important point is on financing costs. And I think we have always prepared the interest rate environment to remain slightly volatile, which means that we can never take comfort at a point of time. So even if the repo rates go up, you know, let's say we've seen one round of increase, even if they continue to increase for next two more rounds, we see insignificant impact on our overall performance and earnings. Also, because we have the ability to refinance. Most of our financing has no refinancing expenses. And the second is that we have the ability to use our free cash more efficiently to effectively kind of control the overall absolute finance cost. So while we are watching out for those particular areas, we're not really worried about the impact of that on our earnings for this year and for the next year. Let me now close with the second half. I think we expect a good quarter three and quarter four, which would be the strongest quarters of the year. Bangalore, Hyderabad, Delhi have a heavy calendar of marquee events. In Bangalore, we have Aero India, DCC India Expo, AI India Expo, Digital Manufacturing Expo, and the PAHO diagnostic one. In Hyderabad, we have events like BioAsia, Kisan Agri Show, India Pharma Expo, and in Delhi NCR, we have Bharat Mobility, Auto Expo, India Arts Fair, and Medical Fair, and we're just mentioning a few of the many events which are lined up in all the key cities. Now, these events will compress demand across our micro markets, and compressed nights are where our pricing power is greatest, as you saw with sold-out nights this quarter. Also, unlike previous year where due to certain one-offs, we saw a dip in quarter for EBITDA over quarter three. We now expect each subsequent quarter to be in the previous one. I'm also pleased to publish our first sustainability report this quarter, which sets the baseline against which we will hold ourselves to account. With that, we are happy to take your questions.

Operator

Thank you very much. Anyone who wishes to ask a question, may press star and 1 on the touch-tone telephone. If you wish to remove yourself from the question key, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question is assembled. The first question is from the line of Paran Khanna from Ambit Capital. Please go ahead.

Paran Khanna, Analyst — Ambit Capital

Yeah. Hi, Ashish. Hi, team. Thank you, and a very happy Ravadi to everybody. Three quick questions. First is on Sripiram Bhudur, which was earlier proposed to be an extension of Fairfield, but will now be a separate Marriott Hotel. How does this change the overall CapEx plan for the asset and also the rep par assumption and yield on cost versus what was expected earlier? And second one, Ashish, and you just spoke about the MICE calendar for 2H across Bangalore, Hyderabad, and Delhi, but any particular trends on, you know, rate to call out, especially during these exhibition dates? Are we looking at more like 20% plus referrals during these dates or months? Maybe you can answer these questions and ask my third question later.

Ashish Chappanwal, CEO

Okay, so I'll take the MICE and the ARR first current. So, let's go from quarter one till now. You know, something interesting happened in quarter one. And we can talk about our portfolio. We closed the quarter at near 80% occupancy, but in quarter one, the rate was rather sluggish, you know, 2% growth or so. And our understanding is that it was largely because the crisis, the booking window had collapsed. And with the collapse of the booking window, the revenue managers didn't have the confidence to price an asset in advance because they were not seeing the business on books. We closed the quarter at 79-80%. In quarter two, we started seeing improvement in both booking windows. And I think a little bit of conviction about the fact that demand is there, it comes at the last moment. What's happening with events, Karan, is that we have visibility of demand far. Before the event, so to say. And therefore, that allows a better editing of the asset. The second thing we've noticed in the last two, three months is On unaffected days, and an affected day for us is, I hate to say this, a holiday, a long weekend, or any sort of business interruption event. On a non-event day, the hotels are sold out, and the editing is very strong, and I would say the total revenue growth is 40-24%. But having said that, that does get normalized and moderated by the affected days, which could be long weekends, holidays, so on and so forth. So I think we've delivered a 15% revenue growth overall portfolio, about 12.5% growth on same store. This would have been slightly higher current, but for the fact that in one of our large hotels, and we did mention it on quarter for call, we had a very low-rated catering business, which has been stopped. So I would have expected another, I would say, 50 basis point, 100 basis point impact of that. Otherwise, the same store growth is about 13.5% or so. And I think that is not at risk as we go into quarter three and quarter four. If we get some really sold out dates, we can yield it in high team. But at least I would think that is pretty secure. In terms of Shri Parimadur, it's actually very interesting. You know, it's a 155-room hotel. We are already at high 20s, return on capital employed in that hotel at a rate of 8,500 rupees. With the addition of the married, instead of just adding payfield rooms, first of all, we're adding about 134 rooms. We expect the CAPEX to be in the zip code of about 160 odd crores plus minus. And with that, we expect the total yield on cost to be in the zip code of approximately 17%. Yeah, about 15 to 17%, largely because the existing hotel is already paid for the entire land cost. So there's really no land cost per se. It's a strong market. We have been the market leaders with the Fairfield for the last several years. That Fairfield has been one of our most consistent performers, including through the COVID period. So we do expect that the additional capital will be deployed at about 15, 15 to 17% return capital employed.

Paran Khanna, Analyst — Ambit Capital

Sure. Last two questions. One is on rare. You know, 1Q had 75 hotels with about 1050 rooms, while 2Q mentions 70 hotels and 900 rooms. So, is there a reduction due to deliberate portfolio curation or is it owner exits? And second one is on Mumbai, with MIDC issuing the CC for Navi Mumbai Hotels, can you recreate the timeline here for construction completion and how are you thinking about the overall capex and dev power here, especially given the expected supply in the micro market over the next few years?

Ashish Chappanwal, CEO

Perfect. So on Rare, Karan, no significant changes, but we do see almost monthly shifts to the number of hotels. There is a strong pipeline of about 20-25 hotels waiting to join. So there is some portfolio rationalization that has happened in the last two, three months, but we expect the 70 numbers to be closer to 85 to 90 hotels, I would say, in the next five to six months. Two, I think a bigger focus current is to see how and when we can onboard part of these hotels on the outdoor collection, which is where we think the fee income will start coming to rare. So as I said, we are going with the first lot end of December, and then we expect every month to keep adding hotels on rare outdoor collection, which is where I think the fee engine will kick in. On Navi Mumbai, I must say that we are rather pleased with the current progress in terms of A, approvals, B, in terms of design development. Having said that, it's too early to call out for changing the opening timeline, Karan, and you'll know that in development in India, the whole disclaimer comes true. You know, whatever may go wrong will go wrong. So I don't think we would like to reset optimism at this stage. What we can assure that we are very happy with the progress that we made so far. We are very confident that it is to what we thought it will be in terms of product configuration. We're getting about 658 odd. 100 odd rooms right now, split between Westin and Fairfield. In terms of CAPEX, we've always guided the CAPEX to be in the zip code of about 900 odd crores to 1000 crores. We are in line with that. We do expect to be on ground in terms of starting the work. Probably early 2000, fiscal year 2028. So I think that's where Navi Mumbai is. I would reiterate, since you've asked me this question, Karan, that we're very happy with the progress we're making on Westin Bangalore, actually, right? So while this is a hotel, which is more towards end of FY30, FY31, Westin Bangalore, So we would love to take some of you to Bangalore probably around March, April, and you will be very happy to see that from a conversation to a perspective. It's actually a real building coming up the ground, right? So after W. Hyderabad, our biggest excitement is to open the West End in Bangalore. And then, of course, we have IKEA development in Noida. And then we have both the Chennai, Sripana, Badur, and Navi Mumbai. Fantastic. Thank you. I have the best.

Operator

Thank you, Karan. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all participants at the conference, please limit your questions to two per participant. The next question is on the line of Jinesh Joshi from PL Capital. Please go ahead.

Jinesh Joshi, Analyst — PL Capital

Yeah, thanks for the opportunity. So my first question is with respect to the GST meeting that happened in October 23. I think there were some recommendations to allow limited IPC benefit to hoteliers who are operating below the ARR of about 7,500. And given every quarter, we are incurring a lot of about, I'll not say a lot, but GST should talk about 8 to 10 crores. Can you maybe just update on this development with respect to either quantum or timeline difference?

Rajat Mehra, CFO

Finish, I'll let you take this up first. See, the council meeting suggested that people who are in the same line of business are actually eligible to take the credit in case of a hotel which is being sold for less than seven and a half thousand. We are also paying attention for the final print, but as far as our interpretation is, at least the same line of business should constitute, you know, the commission that we pay to OTAs, right? Just taking the argument further, you know, would these expenses that we are paying and we are losing the GSP on that, will that also be covered? Unfortunately, the overall notification has still not been issued. We are waiting for that to come. We also understand there are various representations which is being made, and government is actually a little positive towards, you know, looking at this and passing on the final benefits to the industry. But, Jinesh, don't forget that you all have... Taking their interest to LTCG and STT. So, I don't think that first they'll try and resolve that before they get to smaller things like DSG and put that.

Jinesh Joshi, Analyst — PL Capital

Understood. And thanks for my second question is with respect to W. If I heard you right, you mentioned that we are targeting and boosting around food PIO press by 28. Now, given the fact that the cutout is already under progress, and I think our earlier timelines, if I'm not mistaken, were not for you. So are we seeing any kind of delay in approval like the situation in Phule which we are facing right now?

Ashish Chappanwal, CEO

So, Jinesh, the project will be completed end of quarter four. We have built in some cushion because the local authorities have indicated that the fire inspection will only happen after the full building enclosure. So, because of that, we are building certain contingencies. Also, our experience. In high agency Pune, where the approvals have taken inordinately long. But the project will be largely completed by the end of the fiscal year. Any one of you is more than welcome to walk the site. But we're just building contingencies to make sure that our estimates for FY28 are not disturbed at the last moment.

Jinesh Joshi, Analyst — PL Capital

Understood. And one last question from my side, maybe split into two sections. One is, with respect to the commentary that was given in the opening, with respect to DTA recognition that can happen in 4Q, and if I talk about 4Q's FI26, that was about 330 odd grows, and the quantum was very high, and the commentary surrounding the recognition that will come through in 4Q, Thank you. How should we think about this? Even, I think, in this water, we saw... And we're sure the flu is considerably better. So how to think about that split in the second half, especially given your commentary surrounding a lot of events that are about to happen in Bangalore, Hyderabad, and Delhi.

Ashish Chappanwal, CEO

I'll take up the second one, and I'll ask Rajiv to clarify on the total recognition of tax assets later. Jinesh, I think we would see a stronger Q3 and Q4. The only thing is that you know we are very reluctant to... So to say, give a forward guidance, but let's break it up. We've seen about a 14% RASPAR growth this quarter. We expect to maintain that growth through quarter three and quarter four. Don't forget that we will have a Diwali week coming in November, and then we will have about a 15-20 days interruption around Christmas and New Year. So, you know, I think waterfall will be much stronger because post New Year vacations, still pretty much 35th of March, we see a home run. Last year, of course, it got interrupted by the Gulf crisis. We have fingers crossed no such things happen this year, incrementally over what we have seen happen. So quarter four may end up being much stronger, honestly. But I would think that all of us should continue to underwrite this 14-15% growth, driven by about a 10-11% growth in the rate and the balance coming through better capacity utilization. I think what may happen is the... is the bridge between RESPAR and total revenue. So as you know, that while the RESPAR grew at 14.5%, the total revenue grew at 14%. I'm talking same store, by the way, right? Because of increased food and beverage income in quarter three, quarter four on accounts of events, weddings, so on and so forth, we do expect that the total revenue growth may be slightly better than we have done in quarter two, largely because it will catch up to the RESPAR growth, right? So my sense is we should model the total revenue growth to be also in the zip code of about, I would say, 13-14% for same store. Respar also around 14-15%. Good flow-throughs. In terms of, you know, just optics, YOY growth, they'll be very good because, you know, we've been reporting comparable EBITDA margins for the last four quarters because of the GST. From quarter three onwards, there is no comparable because we have impact in both years, right? So, we will go back to reporting the right EBITDA growth, which will be in high teens, honestly. So, I think we'll see some of these changes in quarter three, quarter four. But, Jinesh, don't forget, there's a lot of volatility. So, we should bank the performance and continue to work harder than expect that magic will keep happening, right? So, I've banked the performance, but we remain very cautious about how quarter three and quarter four will pan out. There's nothing on the statistics and data which makes us worried. But of course, there are events which are beyond control, right?

Rajat Mehra, CFO

So, Jinesh, specifically on the deferred tax, the deferred tax recognition which is still left for us to take in the P&L is roughly around 100-odd crores put together. And we expect that to be taken in our P&L in the Q4. That's the time we, as per our internal policy, accounting policy, we discuss with the auditors and take the final impact of that in the P&L. The moment that's recognized, that's an effective upside in the P&L for that particular quarter. However, you know, there will still be tax expense which will be coming on account of the defer tax that's been recognized in the past on a net basis for the next H2. The benefit, you know, netting off against the expense with the asset will be somewhere in the range of about 25 to 30-odd crores.

Jinesh Joshi, Analyst — PL Capital

Understood. Understood, sir. Thank you so much and all the best for sticking out. Thank you, Dineshub. Thank you.

Operator

The next question is from the line of Prashant Piani from Elara Securities. Please go ahead.

Prashant Piani, Analyst — Elara Securities

Yeah, thank you for the opportunity. Sir, if I, can you corroborate whether, you know, high-tech city micro market has seen very sharp ADR growth in the last six months, and your assumption of around 10% revenue contribution from W on a stabilized basis, if the high rate growth continues in high-tech, is there some upside risk to that assumption?

Ashish Chappanwal, CEO

Okay, so, Prashant, A, we are extremely bullish in Hyderabad as an overall city because of fantastic infrastructure, a very good bit of existing businesses. A rather diversified nature of businesses, you know, between high tech and financial district, you know, presence of infrastructure companies in Hyderabad. So I believe that Hyderabad has is a we are long on Hyderabad in terms of the next big city in India. Number one, within that, high tech city is perhaps the most mature city. It has over 100 million square feet of existing office space. Low single-digit vacancies, good range, and the growth continues to remain unabated, right? With that backdrop, we do think that the high-tech city market has obviously done well. I mean, I'll give you an example. We have a Holiday Inn Express in high-tech city, and that for several quarters has remained operating at 20%, 25% premium to the portfolio average for Holiday Inn Express, right? So if we do a portfolio average of 4,000 rupees in doing that, running that hotel at about 5,000, 5,100 rupees, right? That's a 25% premium of that market, and I'm not going on external data sources. I'm going by data that we collect internally, right? So that's one. Second. We know that the product is turning out to be exceptionally good. We also believe that W is a much loved and awaited brand for a tier one city in India. You know, it's kind of rather surprising. There's only one W in India as of now, which is in Goa. Of course, there are multiple W's being developed as we speak by different owners. There's one opening in Bangalore, we're opening in Hyderabad, there's one happening in NCR. But nevertheless, you know, this W will be amongst the first W's in a tier one location, and especially in that sort of a curbside. So we do expect that hotel to deliver outstanding results in terms of rate. In terms of an upside potential, I think you're right. W has the potential to... Outperform and deliver more than if you take FY27 as a basis, right? FY27, I mean, W has the potential to go up to 170 odd crores of top line, which will be in excess of 10% of FY27 total revenue, right? So I think this is one asset where I would tend to... Not remain very conservative, but err on the side of being optimistic just because of the quality of the curbside and the asset. So, yeah, there is an upside in this asset as we open it.

Prashant Piani, Analyst — Elara Securities

And stabilization period would now narrow down to around two years for likes of Delhi, Hyderabad, Bangalore.

Ashish Chappanwal, CEO

FY29 will be stabilized for this hotel. Because don't forget, we are getting enough time in FY28 to kind of open this hotel, capture the full RFC cycle for the next calendar year. So our assumption is that FY29, this hotel is a stabilized hotel, which is literally the second full year. And it's a 170-room hotel in a market that's very large. So, if this is a 400-room hotel, 500-room hotel, we would have been more cautious to give another year. But 170 rooms in that location with the W brand and the Bonvoi distribution, you know, it shouldn't be a hard thing for us to deliver, really.

Prashant Piani, Analyst — Elara Securities

Sure. Thank you so much, and happy Diwali to all.

Ashish Chappanwal, CEO

Thank you.

Operator

Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead.

Achal Kumar, Analyst — HSBC

Yeah, hi. Thanks for taking my question. First of all, in terms of your target around net debt to EBITDA, you mentioned you want to reach 2.5. Can you give us a bit of a bridge, you know, from here on? How do you see reaching 2.5, including, like, what kind of CAPEX, what kind of SPS you're expecting, and over what timeline you should expect 2.5?

Operator

Thanks.

Rajat Mehra, CFO

Ashish, just give me a second. Gamma is just walking up to me with the bridge. So we are at about 3.1 right now, plus, minus, you know, like double decimals. As I said, we are really working hard to make sure that we get to below three by either the end of this fiscal year or another quarter or so, right? And then what's happening is that a lot of our current cash oblique debt is in development assets such as W-Hazabad and which produce no EBITDA. So as W Hyderabad opens for FY28, and that EBITDA starts coming through, and by the way, our net debt is not really changing materially. There will always be a plus minus 100 crores movement because of quarterly cash in, cash out. There may sometimes be higher draws for cash also on the book. But I think generally, we've always committed to the fact that our net debt will remain in the range that it is right now. So, with the net debt remaining stable, And all of our growth being funded from our free cash, right? And the EBITDA growing not just on the same store basis, but also the incremental EBITDA coming from hotels like W Hyderabad, right? We do think that the path from current three times or let's say 2.9 times going to 2.5 times is another, I would say, I would think on the conservative side, 18-month side. Now, in that, what we are not factoring in is any incremental capital recycling. And I think we have stated on earlier occasions such as that we have identified one or two hotels in our portfolio where we think we would rather recycle that capital than hold it for the long term. The challenge we face is we always need a counterpart to recycle capital, and therefore, we will hesitate to commit on a timeline. But since I'm asking for, let's say, an 18-month period, both to deliver incremental EBITDA and also have the optionality to recycle some capital, we remain extremely confident that SAMI will deliver that stated around two and a half times over the period that I'm stating right now. It's a rather execution-driven path, not a lot of risk on where the market would be, really, in terms of ref parts and rate growth and all of that.

Achal Kumar, Analyst — HSBC

Okay, perfect. Thank you. My second question is about where India has been so bullish. I mean, can you give us a bit of a color in terms of now, where are you in terms of sort of revenue EBITDA in FY28, FY29? Do you have any sort of updated color in terms of numbers from where you gave us when you actually launched it or when you acquired it? So any update on that, please?

Ashish Chappanwal, CEO

So, yeah, surely I think that there are two things. Our excitement about Rare is... In multiples, right? Number one is that for a company like ours, which for the last 15 years has either grown same store, which is plus minus the market performance, or has grown through CAPEX-led, you know, investment-led growth, right? You know, put capital, build new hotels. I think what we're trying to do is build a non-CAPEX-led fee stream for the long term. And, you know, asset-light models take time, but as they mature and they ramp up, they become a well-roiled machinery. So that's one. But that's more long-term, really, right? The second is that the economics for us is rather attractive. You know, as these hotels go on the distribution platform, We get a commission of about 80% on every booking that is made, right? I think you'll start seeing the revenue ramp-up and the profit ramp-up happen from FY28 because the platforms just go live end of this calendar year. So FY28 will be the first full-time operations of some of those hotels. We think we should get to about, my sense is about 15 to 20 crores of top line. In the next fiscal year, which is almost. Interestingly, half a ton of our total investment in a single year, right? This will be a reasonably good margin business because, as you say, there is really no employees in our roles, no power expense, no nothing. So we do think, as we had articulated in March when we had acquired this, this is going to be a business which will grow on its own without capital. This is a business where solving for a 50% Rossi is not a hard thing to do. And in a owned asset, I just responded to Karan, you know, you put capital and you go to 16, 17%. So I think both in account of bringing growth to a semi on a YOY basis and also very high Rossi, even though the underlying investment is small. So I'm not claiming that that Rossi will shift the needle on our portfolio Rossi. For that, I still need to do that. I'm investing in Bangalore and W Hyderabad in our existing portfolio. But I think that this platform will become a creative on all of those accounts in FY28.

Achal Kumar, Analyst — HSBC

Okay, fine. My final question about, my final question is about, you know, I just want to understand.

Operator

Mr. Kumar, may we request you to return to the question queue for a follow-up? Thank you. The next question is from the line of Viraj Mahadevia from MoneyGrow. Please go ahead.