Viceroy Hotels Limited (VHLTD) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Weistroy Hotels Ltd. Q2 and H1F527 on its conference call. As a reminder, all participant clients will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation completes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero or near the door phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kirab Bhatia from NUSD-IR. Thank you, and over to you, sir.

Thank you, Huda. Good afternoon, everyone, and welcome to Q2 and H1 FY27, a main conference call of Vibra Hotels Limited. From the management today, we have with us Mr. Anirudh Reddy, non-executive and non-independent director, Mr. P. V. Krishna Reddy, chief financial officer, and Mr. Pradirumana Kodali, chief operating officer. Before we proceed with this call, I would like to give you a small disclaimer that this call may contain certain forward-looking statements which are based on belief, opinion, and expectation of the management as of date. A detailed disclaimer has been given on the company's investors' presentation which has been uploaded on the stock exchange. I hope you all had a chance to go through the same. Now, I would like to hand over the call to Mr. Anirudh Raji. Over to you, sir.

Good afternoon, everyone, and thank you for joining us for the Q2 and H1 S527 earnings call of Viceroy Hotels Limited. I hope you have had a chance to go through our financial results, investor presentation, and press release. If I had to sum up this quarter in one line, it is the quarter in which the work we have put into our hotels over the last two years has started to show clearly in our numbers, even with our convention center at Marriott closed for renovation. For the first half, total income grew 61% to Rs.94 crores, and EBITDA grew by 81% to Rs.25 crores. Mr. Krishna Reddy will take you through the details. So let me talk about the environment we operated in, how our hotels perform, and where we are taking the business going forward. QDU is usually the quietest quarter of city hotels, yet it is a good one for Indian hospitality. Industry estimates put repart growth at around 18% year-on-year, with room rates rising in double digits by September. Domestic travel remained the anchor. The conflict in West Asia has kept international arrivals subdued but with more demand coming from within India. The impact has been contained. Part of this growth also reflects a softer date last year. Hyderabad remains one of the country's strongest business hotel markets with September as far up around 90-20%. The driver is Global Capability Centers. They took record office space in the first nine months of the year and Hyderabad accounted for about 37% of July-September leasing. Each new center brings business travelers, project teams, and relocating executors. The guests are hotels and executive apartments are built for. With branded room demand, outspacing new supply, and living new premium supply in the city, we expect grades to stay well supported. Against this backdrop, our hotels did well. Combined respire across Marriott and Courtyard grew 39%, roughly twice the industry space. Much of this came from Courtyard, which, with all the 158 rooms back in service after Phase 1, ran at over 87% occupancy. Marriott improved both occupancy and rates, even with Phase 2 work underway. And to the question many of you asked last quarter whether rates would follow occupancy, I'm happy to say they have started too. A combined area rose about 9% over the first quarter, back to last year's level. But now with occupancy more than 22% higher, full hotels with firming rates is exactly the combination we have been working towards. Our administrative apartments in Gatshibali continued to do what we acquired them to do. With occupancy running at around 90%, we said our focus would shift to rate, and this quarter ADR grew 12% to about 15,337. Our Renovation Program Phase 1 at Kotiad is complete and in August, we opened Vayu, the Rooftop Restaurant Bar that was parked. of it, overlooking Hussain Sagar and celebrating regional fusion from across India. Phase 2 at Marriott, covering the expansion of our Convention Centre to 20,000 square feet across three banquet halls is progressing well and remains on track for completion by end of December. Giving up a banqueting business while a Convention Centre is closed is a cost we planned for. Once it reopens, Marriott and Courtyard will work together as a complex of close to 500 rooms with a much larger convention facility, well-placed for weddings, social events, and conferences, some of the most profitable business we do. Phase 3, covering the 295 rooms at Marriott, our restaurants and the lobbies is planned for FY28. This was also an important quarter for our balance sheet. We completed our 105 pro right issue, which was oversubscribed 1.19 times. And I want to thank every shareholder who participated for your confidence in us. The issue brings our public shareholding in line with the regulatory requirements, and most of the proceeds are going towards reducing debt, which gives us more room to grow. We also continue to evaluate running or near-complete hotels that could join our portfolio with the same discipline on return. Looking ahead, the second half is traditionally our strongest period, with weddings, conferences, and corporate travel all picking up. With courtyard and school strength, the convention center returning, our executive apartments pushing rates, and a stronger balance sheet, we go into it with confidence. Our priorities remain unchanged, complete the renovation of schedule, turn occupancy into higher rates, improve margins, and grow the portfolio with discipline. With that, I hand over to our CFO, Mr. Piri Krishna Reddy.

Thank you.

Thank you, Andrew, and good afternoon, everyone. Let me take you through our financial performance for the quarter and half-year ended, September 30, 2026. For Q2 FY27, on a consolidated basis, total income stood at 48.8% compared with 31.9% growth in Q2 FY26, a growth of 53% and 8% higher than the first quarter. EBITDA came in at 1.9% growth, again it's 8.8% growth last year, up 46% year-on-year and 9% sequentially. EBITDA margin was 26.7% and improvement over 26.3% in Q1. Two items shaped this quarter's margin, the temporary loss of bank pitting business at Marriott during the renovation, which had an EBITDA impact of around $2,000 and one-time expense of $66,000 for the launch of YU restaurant towards marketing expenses. So for the first off, total income grew 61% to 94 crores and EBITDA grew at 81% to Rs.24.7 crores with EBITDA margin expanding by 221 basis points to 26.5%. Profit after tax for H1 rose 171% to 3.7 crores from 1.4 crores in H1 at 5.26. Coming to our opening matrix across Marriott and Courtyard. Combined occupancy rose to 79.2% in Q2 from 56.9% a year ago. Combined ADR was 6,655 in line with last year and up 9% from 6,107 in Q1. Then combined Ravupar grew 39% to 5,272. At courtyard, Occupancy was 87.4% against its 31.3% last year, and Revpar rose more than 2.0 times to 5,711. At Marriott, occupancy improved to 74.5% from 71%. ADR increased 1.8% to 6,738, and Revpar grew 6.3% to 5,022. For the half-year, combined Revpar grew 30% to 4,955. Looking at the revenue mix across the two hotels, room revenue grew 39% to 22.5 crores in Q2, while food and beverage revenue was 110.8 crores, again is 13.5 crores, 20% lower, with the convention center offline since the first week of SL for the Phase 2 upgrade. For the half-year, room revenue grew 39% to 42.1 crores, while F&B revenue was 5% lower at 22.7 crores. We expect F&B to return to growth once the convention center is back in service. At the Marriott Exhibito Apartments, room revenue grew 17% to 9.3 crores in Q2 and F&B revenue grew 18% to 3.5 crores. ADR rose 12% year-on-year to 15,337 and 15% over Q1, with occupancy at 88% against 84% last year, taking rev car up 17% to 13,461. For the half-year, room revenue grew 19% to 17.8 crores, and Revpar grew 19% to 12,991, on an occupancy of 91%. Turning to the balance sheet, our rights issue raised 105.8 crores, which shares alerted on 15 September. Of the issue proceeds, about 80 crores is year marked for repaying debt in Wi-Fi houses and in our subsidiary SELN terminals, and we have already begun deploying it. We can argue that Raising the repo rate in October for the first time since 2023, we believe reducing debt is the right to use of this capital. On cash generation, operating profit before working capital changes more than double to 24% in the first half. Looking ahead, three things should work in our favor in the second half. First, seasonality as a second off is traditionally our strongest period. Second, the return of the Convention Center at Marriott, which brings back banqueting, one of the highest margin streams in our portfolio. And third, lower interest cost as we retire debt. Together with continued cost disclaim, these keep us firmly focused on taking our EBITDA margin above 30% in the near term and towards our long-term benchmark of 40%. Once the renovated portfolio is complete. With that, I would like to open the floor for questions and answers.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their question on telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants will request the previous hands-up 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 Sharjeev came from RKN Investments. Please proceed.

Thank you for the opportunity, and congratulations for the exceptional kind of results. So, I just have a couple of questions. So starting with, your Q1 total income grew by 53% year-on-year, but the executive apartments were not part of last year's base, right? So for the first, for the two hotels alone, room and F&B revenue grew about 12%, with rooms up 39% and F&B down 20%. So is that the right way to read the organic growth this quarter, and perhaps what could growth have looked like without the bank foreclosure?

Hi, I'll just keep the two parts to that question. So the first part in terms of the organic growth, yeah, I mean, it mostly was organic, but what we also saw was in Q1, we were, you know, partly hit by the war in the Middle East, whereas a lot of that business that was, you know, then on pause came back to us in Q2, and, you know, we're happy that, you know, a lot of the business that we thought may not have come our way. And in terms of the banqueting revenue that we had started losing from April onwards itself, the impact it has is about 2 crores of EBITDA per quarter.

I understood, I understood. And secondly, at the Executive Apartments, ADR was around 15,337 in Q2. It was almost 12% up year-on-year, but below the 16,570 it reported for Q4, for F26. So, how much of that is seasonal? And with occupancy close to about 90%, are you now prioritizing greater occupancy? Also, what share of room, night still, or long stay, corporate contacts? And how often do these reprise? If you could throw some light on that.

Yeah. So, like you said, you know, this is a business where there's obviously a lot of functionality where your Q3 and Q4 are significantly stronger than Q1 and Q2. So, what happens is even your strategy of selling rooms changes. In Q3 and Q4, obviously, the priority is completely on pricing and, you know, you want to maintain that high pricing because, anyway, the occupancy takes care of itself. Whereas in Q1 and Q2, especially maybe during those months where there are slightly changes where we're looking at occupancy as a metric more than the ADR, in Q1 and Q2, your combined ADR is slightly lower than that of the entire YTD number last year. But having said that, the way we see Q3 and Q4 panels, we're very confident that the YTD number for this year will again be a good 10-12% growth on last year.

Understood, understood. And lastly, on balance sheet side, equity share capital rose from 67.6 crores to 76.8 crores with the right issue. So in which the promoters did not participate, taking promoters holding from earlier 84.11% to 74.03%. So, was the issue structured primarily to meet minimum public shareholding norms, and is that requirement now fully met, and should we expect any further dilution?

See, the main reason was to come to the study requirement, and that's where the valuation was done, even though the debt level which we had before was sustainable, and we were very comfortable with that. Since, you know, new acquisitions were there, the strategy was to pay down the debt on the books and raise the capital so that we can meet the study requirement of 75%, and now we are, like, positioned that we have a lighter debt on our books, and we are positioned to grow more. So that is what the whole rice issue was for. And yes, we are not looking for any further dilution, but in case of certain opportunities that may arise, we will obviously look at that at that stage.

Understood, understood. All right, sir, that's all from FA. All the best for the future. Thank you.

Thank you. The next question is from the line of Suhani Singh, from ROS Kapatin. Please proceed.

Good afternoon, sir. So, I just had a couple of questions. So, the courtyard Q2 RESPAR of 5711 is now about 14% above Marriott's 5023. So, even though Marriott is the flagship, is that mainly product age, the convention center closure, or segment mix? And what RESPAR are you targeting at Marriott once all 295 rooms have been upgraded?

Right. Yeah, see, like you said, it's a combination of all the things that you had mentioned. You know, one is the fact that Cotliar currently has appraised a new room. That is one. Point number two is Marriott currently doesn't have its common center. There are a lot of its rooms, especially at higher-paying area, comes with along to the common center. Part three also is the fact that Marriott is now going to go on and undergo renovation for the room in the next financial year. So, once these metrics are all, like, you know, taken care of, that's when you see that the merit will, you know, ADR will be about 5-7% at least higher than the courtyard, like it's normally positioned in the market. But having said that, in our complex, there is also a unique advantage for the courtyard in the sense that it's a smaller inventory. So, when, as in when the courtyard keeps getting filled up, the ADR if it keeps going up, whereas the merit is a much larger inventory. So, that's where the price is still, you know, competitive. But yeah, in the long run, once the entire renovation for both the hotels is done, we expect the marriage to be at about 70-10% higher than the courtyard.

So, in February, the renovation program was styled at 120 euros, with about 50 euros for courtyard, 20 to 30 euros for convention center, and about 40 euros for Marriott's 295 rooms, and 10 to 15 euros for lobby and rooftop. So, the presentation now refers to 100 plus euros. So, how much has been spent to date? What remains by phase and has the scope changed?

So, we are on track to, so we completed courtyard and we are on track to complete the convention center, also within about 110 crores, 115 crores. So, that is what we are at now. So, they're sticking to the budget we presented earlier. And the married budget also, we're just going to stick to that 40 crores to upgrade the room.

Okay, that helps. So, last question. In March, the West Asia conflict raised on travel sentiment. So, how has the international guest mix across our free properties trended since then? And has the inbound corporate and leisure travel from overseas fully recovered from it here?

Yeah, so I see in terms of recovery based on what we saw in Q2 and what we are observing in Q3, we are fairly confident that, you know, whatever little bit was lost in Q1 will be recovered for a lot of the pending, I mean, apart from what you obviously lose a little bit in terms of community center upliftment, that is something that, you know, we may not gain, but like all the other stuff that we lost from war, we do intend to get impact. In terms of the mix between foreign and domestic demand, usually our complex that is Married and Courtyard runs at about 85% domestic business versus 15% of foreign business. That percentage contribution in a married exhibit apartment which is in a different micro market is slightly different where 20 to 30% of that business comes from foreign demand versus domestic demand. But this is, again, that's something that keeps varying across the seasons. In Q3, Q4, we see a lot more foreign demand than Q1, Q2. Q1, Q2, a majority of the business is domestic-based, and which is what also kind of reflects in your ADRs and other F&B revenues, because a lot of the foreign demand comes with additional benefits.

That really helps. Thank you so much. That's it for myself.

Thank you. The next question is from the line of Neenish Verma from Vaxora Solutions. Please proceed.

Good afternoon, sir. Am I out of here? Sir, so my first question would be, Q2 is ideally one of the softer quarters for the business, yet consolidated EBITDA rose around 9% sequentially to 12.9 crore, even after absorbing a one-time value launch cost. Could you break down how much of the improvement came from Kotler's ramp-up, the executive apartments, and cost initiatives, and whether we should treat this as the base to build on through the stronger second half?

Yeah, so, I mean, the Marriott Exeter Apartments, anyway, you can read that as a separate, in irrespective of that, we have grown in terms of performance, both in Courtyard and Marriott in itself. A significant part of that improvement has come from the Courtyard, because if anything in the Marriott, we only saw a permanent center go out of the inventory. So, all of the improvement that you see, along with the 70 lakh, it has entirely come from the Courtyard.

Okay, and so the presentation lists the 200 key courtyard at Madhapur as an exhibition in the same Western business corridor as the executive apartments in Gachibholi. How do you see the two properties working together on corporate accounts, sales, and shared office, shared back office functions, and where do the approvals stand and when do you expect the constructions to begin?

So, we are right now in the process of getting the permission. We expect the construction to start in the next financial year. In terms of the property running together, we are right because one is a 75-room inventory, one is a 200-key courtyard, both of which can have a common senior management team, especially on the married front. So, we are obviously going to work on not just these two. In fact, we are currently in the process of having some department that could be common to all of our hotels in Hyderabad. These are not inventories that necessarily require, say, for example, four general managers across four properties. So, wherever, you know, we can have that sort of... Ah, efficiencies, we definitely work on that. Even in terms of some of the back of the house spaces like you know say laundry or something where we can have a common facility where all the hotels are using the same facility. These are things that we are actively working on. And this is something that I think in the years to come you will see in the EBITDA percentages also like going up.

Okay, that answers the question. Sir, the last question would be on bookkeeping. So, goodwill of Rs. 58.6 crore sits on the balance sheet from the S&R acquisition, where 59.67 crore of the 206 crore consideration was paid for shares in a company with an FY2725 net worth of about 8.6 crore. Could you explain what goodwill represents and how it is tested for impairment?

See, the goodwill, see, we have acquired excellent terminal, and the goodwill is created based on the book value of the assets minus liabilities, and what we paid for the acquisition of the shares. So, so, every year it is tested for impairment. Right now, the executive departments are doing very well. So, there is no scope for the impairment.

Okay. Thank you. Thank you for answering all the questions.

Thank you. The next question is from the line of Swamyarabhi Wanchi from Nirma Investments. Please proceed.

Good afternoon, sir. Thank you so much for the opportunity. I just have a few questions from my hand. The executive apartments account for 75 of your 538 operating keys, about 14%, but generated 12.8 crore of rooms, and SMB revenue in Q2, roughly a quarter of the consolidated total. Given the room's less, higher margins of 5, its share of EBITDA is likely larger still. Could you share these properties due to EBITDA and margin?

So, in terms of EBITDA margins, our current three properties work at slightly different percentages. So, the marital exit apartment is something that is primarily like a room business, so the EBITDA margin is there as close to 40%. I have a year long level. Courtyard again is similar in the sense that a lot of revenue comes in from room revenue. So there again we operate closer to that 40% mark about 37-38%. So Marriott where the contribution from F&B is very significant in the sense that we have 10,000 square feet of common space. It is now becoming 20,000 square feet of common space. We also have four restaurants in the hotel along with a lot of in-room dining services because there is this kind of clientele slightly different. So, in this hotel, in terms of revenue contribution, close to 48% to 50% of the revenue comes from F&B, where the profitability is obviously not as high as the rule. So, that's where the Marriott functions closer to that 30% mark based on the quarter we are at. And at a consolidated level at the company, we currently see ourselves that the EBITDA percentage is slightly above 30% for the year. Where, you know, in the long run, the target is to move close to that 40% at an entire portfolio level.

All right, all right, so that was very helpful. So, for the half, Marriott's area was about 5% lower year-on-year, even as occupancy rose from 65.7 to 73.3, if I'm not wrong, and on the Q4 call, you mentioned filing rooms with the airline crew and defend groups while the convention center was closed, with area backup about 2% year-on-year in Q2. How much of Marriott's business is still on such contracts, and how quickly can we rotate back to higher yielding corporate and MICE demands?

We're only a quarter away. See, as we mentioned in our press release and the presentation that we shared, we expect the convention center to be back live by NQ4. So, that's when you roll back on some of these contracts that are not as high-paying as some of the might groups or like, you know, even wedding social groups, which pay us in extremely higher ADRs. So, until the convention center is back is when we use some of these other sorts of corporate businesses to help protect our revenues, which obviously come at steady lower ADRs. But in two quarters, it's a very, very strong idea.

Okay, sir. Just a last question from my end. Cash in equivalence stood at 110.5 crore at the end of X1, up from 19.4 crore, largely from the rights issue of the proceeds. About 80 crore is your mark for debt repayment at Wall Street and SLM. How much has been repaid since 30 September, and how do you intend to use the roughly 25 crores set aside for general corporate purposes?

So, out of 105.8 crores, we have repaid 80.25 crores of debt in the month of October, first week of October. So, and the balance funds are earmarked for utilizing it for the CAPEX, for the Convention Center, and for the daily operations.

Okay, okay, sir. That's it for my answer. Thank you so much. All the best. Thank you.

A reminder to all participants, anyone who wishes to ask a question, may press star and one on the redstone telephone. The next question is from the line of Yash Neheta. Some great opportunities. Please proceed.

Yeah, so hello everyone. Hope I am audible. Yes.

Yes, please.

So, like, I've got a few set of questions. So, like, firstly, you mentioned about your investment strategies, which includes the NCLT and other distressed assets under Q4 call. And you also mentioned the expression of interest in several, though nothing has been materialized yet. So, is there any update, like, what ticket size would you consider, and what would you prefer to own assets outright, Take long leases and acquire other operating companies as you did with SNL.

So the strategy is still to find these good sweet deals in the distressed market and add it to our portfolio, but because of the three years of very good run in the hospitality industry, there's no much stress. So we're not getting such good deals, but we're still scouting for them on an everyday basis, and that is our first number one priority if something comes up. The second priority, what we are trying to do is find other operating assets to add to our portfolio. So, just a standalone one which is there anywhere in the country. We're trying to add to our portfolio and move out of Hyderabad. So, that is something else we are constantly looking for. And the third avenue which we are looking for is these brownfield ones where they're half built or near completion, some more chapters required to complete it, and things like that. So, these are the three avenues we are looking at. But we've also recently trying to... See which different governments, trade governments are offering land parcels for building hotels, but these projects are obviously going with caution because they involve a lot of capex and the return is on a higher time period. So we are still evaluating these other opportunities also which we get ahead.

Got it, got it. And also, like in October, the Viceroy extended somewhat around 38 crore loan to S&M at 8.75% to retire its external following. And if I'm not wrong, 41 crores of the rice proceeds to share marks for paying Viceroy's own loan. So, can you, like, let me know what rates were those loans carrying, and once both repayments are complete, what quarterly finance costs could we work with, like, compared with 5.8 crores in Q2?

Yes. So, one 10 crore loan was at 9.75%, and the balance loans were at 8.5 to 8.75%. Okay, and then to the next half year, the interest cost.

Okay, understood, understood. That's helpful. And lastly, so it's about the ADR, which rose about 2% year-on-year at Marriott in Q2, and fell about like kind of 4% at courtyard, and both were lower for the half. So, most of the rate upside is still a bit. So, the Marriott room upgrade now scheduled for FY20 is, how do you plan to finish rate increase until then, and by when do you expect the complete complex to approach the 9000 to 9500 ADR rate you mentioned on the Q4 phone?

Hi, yeah. So, I mean, like I said, I think some of the rate improvement did come from the fact that, you know, the market bounced back in itself. We did recover from the war, and that's where we saw some of the improvements. In terms of the Marriott, we also, I mean, there's a little bit effect we saw in Q1 was partly also because of the convention centers not being available. Now, as we mentioned, we will go to the Marriott room renovation in FY28, and the effect of the overall inventory being fully renovated and, you know, possibly reaching a complex area of 9,000 or even 9,500 is something that will take time to... What we call scale, and FI 29 is when I think we would realistically see the real potential of the entire complex.

Understood, understood. Yeah, that was helpful. Thank you so much.

Thank you. The next question is from the line of Santosh Shati from LCC Capital. Please go ahead.

Hello, all. Thanks for the question. Just a couple of questions. So... Hello, I'm Audible. Yeah, so H1 EBITDA was 81% to like 24.7 crores, with the margin up from around 24.3% to 26.5%. So how much of that improvement is structured from the Courtyard relaunch and the Executive Department, and how much Reflexa soft days last year and Courtyard ran at 35.5% occupancy during its renovation?

Yeah, so like I said, almost all of it has come from the courtyard, a standalone number of inches, that's what we're comparing. The entire uplift has come from the courtyard. We've seen a significant increase in both occupancy because of the additional availability of rooms as well, and also ADR because we have like the newer inventory. At the same time, on a consolidated level, again, the Esalen Terminus has had a very good contribution because that's the hotel that runs at the highest occupancy for us and at the highest ADR.

Okay, so, like, at the executive apartment, like, revenue, like, room revenue grew 19% in H1, but F&B only 5%, even with occupancy at 91%. So, what is holding back F&B on the property, and is there scope to grow in-house dining or catering for corporate clients in the, like, other areas?

Yeah, there is. So, the thing is to start with in terms of contribution from room revenue. In that hotel, the room revenue in itself contributes like, you know, north of 25%. So, contribution from attendees majorly comes from our all-day dining restaurant, Mago, and a little bit of, uh, banqueting where we have, like, a small banquet on the, uh, 8th floor. But what we recently also started doing is a lot of catering to the likes of Genpac and some of these other GCCs that are in the micro market. So that's where we have scope in terms of increasing the S&P contribution in that hotel.

That's great. Just a last question. The presentation positions the convention center as the next earnings analyst like Catalyst and opening in December with uplift expected from Q4 F527. So you have already spoken of 223x banquet revenue and a payback of about 18 months. So could you just quantify the incremental revenue and EBITDA you expect in the first full year of operation and how long the ramp up to full utilization should take?

Yeah, so typically, any convention center, I mean, if it was supposed to be for a greenfield project, it normally takes about 18 months for full ramp-up. But in our case, because, you know, it's an existing hotel facility where people are aware of the premises, people already have an existing team that's already working on bringing in business and leads, we expect our, like, you know, ramp-up time to be half of that. Like, you know, within nine months of, you know, being live, I think we'll be at full throttle, which is basically also point sides with your strongest quarters. So I think by like Q3 next year, we will be at like, you know, at full occupancy and like extremely high ADR for any business that is coming through the convention business. So that's one. In terms of additional revenue that it can bring, we still stick with what we said in terms of potentially doubling our revenue from the convention business, which also means that, you know, we will have our payback period in about 13 to 24 months.

All right. I appreciate that, and thank you so much for the opportunity. All the best.

Thank you.

Thank you. The next question is from the line of Nehil Surana from 9th Tower Booking. Please go ahead.

Hi, sir. Good afternoon. So, I have a couple of questions. The first one is related to the depreciation and interest. Together, absorbs over 90% of the beta this quarter. So, leaving the PBT at just 1 crore. So, how do you see profitability evolving, and when do you expect operating leverage to outpace the step-up in depreciation from the renovation?

So, yeah, I mean, like I said, I mean, from the next two quarters, you will see higher DBTs because A, EBITDA in itself to start will be significantly higher, whereas your depreciation will be similar in nature. The interest cost is something that is obviously going to go down now that we've paid back a significant portion of the debt. So, we will see improvements in DBTs. The other thing is also once a majority of our hotel is done with renovations, again, the Edita numbers that we see at a consolidating level across our hotels is going to be significantly higher. Where BCR predicts PBC numbers potentially even like tripling or quadrupling in the next couple of years.

Okay, got it. So, the second would be the courtyard has rebuilt occupancy to 87% up to the renovation. So, the focus now turns to rate as 6.3 to quarter to ADR was still below the last year level. So, what is the rate gap today between the 56 new room and the original inventory? And how much height room do you see to push pricing as the peak season's existing?

Right. So, in terms of that area, different that you see from last year, last year, we only had about 50% of the room available. So, it was, you know, easier to, you know, sell them at a slightly higher area than this year where you have all of the inventory available. Having said that, the number that you're seeing is still H1 number which had, you know, part effects of the war and all of that. But in Q3, Q4, in fact, while I can't, you know, give you the exact number, we already see significantly higher numbers than what we see last year or in Q1 and Q2 this year. So we are already seeing that benefit of the updated room. In terms of the parity, we sell the newer inventory at about 35% to 40% higher than the older rooms.

Okay, got it. The last question is related to the long-term borrowing. So, it stood at around 243.8 crore at the end of equine. Could you share the profile of the debt that will remain after the right has been funded, the blended cost, the share at floating rate, the tenor, and the scheduled retirement over the next two years?

Yeah, the loan tenure is ranging from 10 to 12 years, and the blended rate is 9.15%. And in the month of October, in the first week, we have repaid 80.25 crores of the loan. So that brings down the overall debt to 182 crores.

Cool. Okay. Thank you so much. Thank you.

Thank you. The next question is from the line of Nimish Varna, from Datsura Solutions. Please proceed.

Hi, sir. A list of follow-up questions. The operating profit before working capital change roughly doubled to 24 crore in H1, although a working capital outflow compared with a large release last year. Meant operating cash flow came in at 18.1 crore. What is the cash conversion cycle we should expect for the full year? And what decibel days should we assume now the executive apartment corporate long business is part of the mix?

Yeah, the difference is mainly because of this merit executive of our time, compared to last H2, and we will be at the same pace going forward, and the operating cash flow has been increased because there is an increase in payables, and decrease in vegetables as well.

Good morning, everyone, and welcome to the call.

Okay, and for the last question would be, in Feb, the married room refurbishment was described as running in parallel with the convention center work.

The presentation now places all 295 rooms in Phase 3 for completion in FY28. Could you explain the change in sequencing and when the first renovated rooms will come back into inventory?

So we have taken a strategic step where the convention center is going to come back in December, and we have the lock-up room ready and the rooms to go under renovation quickly, but we want to do it in a very phased manner because the revenues are very good, and we see the convention center also being occupied very well. In fact, in this micro market, the big convention center, the other big convention center, which is Novatel, is going under renovation in February. So, we want to capitalize on that and use maximum rooms which we have with the convention center to get good revenues when there is a renovation, but apparently also start doing the various rooms from April of next year. So, even though it's moved to phase three, it is going to be, it's going to start from, the next thing that's going to start is the room of Marriott.

Okay. Thank you, sir. Thank you and all the rest.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. On behalf of any SQIR that concludes this conference, thank you for joining us and you may now disconnect your lines. Thank you very much.

Thank you.