Thank you so much. Good morning, everyone, and welcome to SAMHI Hotels' Q3 FY '26 earnings call.

Thank you for joining us today. I'm also joined by our CFO, Rajat Mehra, our VP and Head of Investments, Gyana Das, and Nakul Manaktala, SVP, Investments.

Our investor relation advisors, Strategic Growth Advisors, is also on the call. We have uploaded our Q3 FY '26 financial results and investor presentation on the stock exchanges and on our website, and I trust you've had a chance to review them.

Let me begin with a brief overview of the quarter before Rajat takes you through the financial results. Quarter 3 FY '26 was a strong operating quarter for SAMHI, delivered in a period that saw external disruptions, including a largest Indian airline facing operational challenges during December.

Despite this, the portfolio demonstrated resilience and pricing power. Same-store RevPAR grew by 13% year-on-year to ₹5,643.

Total income growth was 16% Y-o-Y to ₹342 crores for the quarter. On an underlying basis, the EBITDA grew by 19% Y-o-Y, reflecting strong operating flow-throughs.

However, changes in GST regulations impacted the margins, which moderated the reported EBITDA growth to 13.2% on a Y-o-Y basis. Even though there is a short-term impact of GST in part of our portfolio, we believe it will lead to greater sales volume as hotels become more affordable, especially in the midscale segment, and will offset any impact in the long term.

Further, it is important to note that all of our new inventory being added is in upscale segment, which will remain largely unaffected by this change, but also benefit from marginally lower CapEx due to reduction in GST rates across several construction items. This performance reinforces the strength of our city-centric business travel portfolio spread across India's most resilient office markets.

For past 9 months, office absorption across key markets remains very strong and has supported same-store revenue growth significantly ahead of our long-term target, which we've always said is between 9% and 11% Y-o-Y. Now let me briefly touch upon our key growth initiatives.

The 170-room W Hyderabad continues to progress as planned. Design development is mostly completed, and building modifications are underway.

Mock-up room will commence anytime now. This is a marquee asset for SAMHI and will materially lift our ARR profile, both in Hyderabad and in the upscale segment.

In Bangalore, the demolition and pre-construction activities for the 220-rooms Westin block in Whitefield, Bangalore has commenced. This remains a fairly high-conviction project in one of Bangalore's deepest commercial micromarkets.

Across the portfolio, we now have 4,900 rooms operational. We have incremental 1,900 rooms under development or rebranding, of which about 1,450 rooms is a net room addition.

These projects will gradually shift our revenue mix towards upscale and upper upscale, which is currently 42% contribution, to about 60% upon completion, improving long-term earnings quality. Besides this, we continue to have a very high quality and actionable pipeline of opportunities to fuel our future growth, and majority of it, as of date, are in form of capital-efficient variable leases that can be easily funded from our cash flows.

With that, I'll now hand over to Rajat to walk you through the financial performance in more detail.

Thank you, Ashish. Good morning, everyone.

Let me take you through the financial performance of Q3 FY '26. Total income for the quarter was ₹342 crores, up 16.2% on a year-on-year basis.

Same-store asset income grew by circa 14% on a year-on-year basis. New opening, including Trinity Whitefield and the new Holiday Inn Express rooms in Calcutta and Greater Noida, contributed to incremental revenue.

This was partly offset by income loss from sold and discontinued assets, including Four Points Chennai and Sheraton Hyderabad commercial floors, which we have converted to 42 rooms. Consolidated EBITDA stood at ₹126 crores.

Reported EBITDA grew by 13.2% on a year-on-year basis. Excluding the GST impact of circa ₹6.7 crores, EBITDA growth was 19.2% on a year-on-year basis.

GST impact was mostly in our midscale portfolio, where fair bit of our revenue actually comes from rooms being sold at less than ₹7,500. EBITDA margins were 36.9% as compared to 37.9% last year.

This drop in margin attributed to the GST change is circa 200 basis points. Underlying operating cost and flow-through remains stable during the quarter.

Our finance cost declined sharply to ₹40 crores versus ₹60 crores last year. The cash interest outflow is in the range of about ₹34 crores for the quarter.

Balance cost in the finance cost represents non-cash and Ind AS adjustments. Our profit after tax for the quarter was ₹48 crores.

The PAT attributable to SAMHI shareholders is ₹39.6 crores, while the minority interest accounted for ₹8.5 crores. As on 31st of December 2025, our net debt stood at ₹1,450 crores.

The average tenure of our facility is circa 12 years, which actually allows us a strong margin of safety in terms of our liquidity. The trailing 12-month EBITDA, excluding non-cash ESOP cost, increased to ₹482 crores.

Our net debt to EBITDA remains stable at 3x. Importantly, we continue to fund our growth CapEx through internal accruals with no material increase in the net leverage expected.

With that, I hand over to Ashish.

Thanks, Rajat. In conclusion, Quarter 3 FY '26 reinforces three key messages for SAMHI.

The first is that while global headlines remains volatile, on-ground indicators in our core markets show a strong trend line driven by India's economic engine. Our portfolio continues to deliver strong, consistent operating performance and growth, and can manage repeated event risk, as we've seen in the last 9 months.

The last bit is that we have a strong growth pipeline and all the resources to achieve our targeted revenue of circa ₹3,000 crores by 2030. We will now open the floor for questions.

Hi. Thank you for the opportunity.

My first question is, as we are already at the end of January, how is the current quarter shaping up? Does the momentum seen so far will continue, with the World Cup coming next month, do we anticipate any uptick from this event?

Overall, just trying to understand, this momentum improved from here on, that's my first question. Thank you,

Vikas. Yes, the business on books for February looks pretty strong.

January is always slightly slow because of the year-end break. This year, that 10th January extended to pretty much 15th January because of the pattern of school holidays in North, especially Delhi and all.

February looks extremely strong, and not just because of the World Cup, actually, Vikas. Generally, a lot of demand is getting compressed between now and end of February and early March.

We do think that the momentum that we've seen in quarter 3 will actually continue in quarter 4.

Makes sense. In terms of the net debt, it increased by ₹80 crores this quarter to ₹1,450.

Could you help us maybe break down how much of that increase was driven by CapEx and how much of that CapEx was offset by operating cash flows? Additionally, you had earlier guided for ₹300 crore of debt reduction from internal cash flows by 2030.

Does this still hold on considering that we have announced incremental expansion during the last quarter?

Vikas, largely the minor change in the net debt was on account of Navi Mumbai, where we had to make a certain extension payments to the authorities, we are anticipating some inward investment from GIC in the Bangalore project. There's always a bit of a mismatch in those two things.

That ₹70-₹80 crores was largely on account of the Navi Mumbai payment. In terms of our long-term guidance, both on net debt and also on gross debt reduction, continues to remain as is.

I know there's incremental investment that we have committed to Navi Mumbai, but if you look at our investor presentations which we've uploaded earlier, the cushion between our total cash accumulation and CapEx continues to be very comfortable. In addition to that, as we've demonstrated in the past, Vikas, we continue to seek opportunities for very, very limited asset recycling.

I think we remain fairly comfortable and confident about continuing to achieve that number of debt reduction alongside maintaining the CapEx plan that we have put together.

Thanks, Ashish. The removal of this input tax credit led to moderation in EBITDA, which we highlighted in the presentation by 200 basis points.

Does this imply that over the next few quarters EBITDA will grow at a slower pace than revenues, or do we have levers to offset that in the near term? Also, for FY '27, should the revenue growth largely mirror the RevPAR growth with only incremental additions, given that most of our capacity expansion is expected to start from FY '28, as the HITEC City property is also likely to complete end of FY '27?

Lastly, one housekeeping question, can we also possible to get our ADR growth numbers for this quarter?

A couple of them. One is on GST.

You see, the GST impact will be visible for the short term. We do expect that overall reported numbers will kind of not show that from quarter 1.

That's just the adjustment to the base effect, Vikas. Don't forget last year first quarter was pretty terrible because of India-Pakistan, the Ahmedabad Air India crash, and all of that.

We think that there will be 150 basis points, 200 basis points impact on margins because of GST in the short term. I think there are more than enough levers to start offsetting that, but it'll take a quarter or two really.

That's on one. Two, second question was really around the next year, FY '27.

I think in FY '27, while there is no large opening, Vikas, but there's a lot of other levers that will come into play. The first really is that if you see, we were adding very small bunches of inventory this year.

Having said that, all of that is now fully operational and will get full-year benefit in next year. Some of the hotels like Sheraton Hyderabad, which are clearly outperforming the averages, are the hotels which are benefiting from almost a 20% inventory growth because of the new addition.

That, the Trinity Hotel in Bangalore, which we had acquired last year, has really ramped up well. We expect that to start kind of outperforming through FY '27.

The new rooms in Holiday Inn Express. FY '27, we have reasonable levers to kind of add on top of same-store RevPAR revenue growth.

That was for your second question. Third question was in terms of your ADR, occupancy.

If you see same-store, the ADR growth was 15.9% Y-o-Y. The occupancy was not stable, it was 73%, had dropped about 1.6 percentage point.

The total RevPAR growth therefore was ending up being about 13.3%. Right, that's all same-store.

We've continued to believe that all operating parameters should only be reported on same-store.

Sure, I get it. Many thanks, and wish you luck for the next quarter.

Thank you.

Thank you.

Thanks for the opportunity. Sir, my question again pertains to the GST impact.

In response to the previous participant's question, you mentioned that there can be an impact of about 150 to 200 basis points in the next couple of quarters. I was just wondering whether a pass-through of this cost increase is possible or not, especially on the corporate side.

I understand that typically the negotiations happen on an annual basis, but given the loss of ITC credit, can we not renegotiate for a slightly better rate, at least on the corporate side? Your thoughts on that.

Also on the retail side, I was just wondering whether a pass-through is possible or not. If not, what are the challenges on that side?

Jinesh, very important question, actually. Let's tell you what's happened in the quarter.

The pass-through is already happening. If you see for the quarter when same-store grew at about 14%, and let me tell you if we were to do an impact of the airline crisis in December, it was pretty, pretty substantial.

Now if you look at the revenue growth in the midscale segment that we've shown on page number 15 of our presentation, actually the midscale segment, which has the highest impact of GST, also showed a revenue growth of 16% and 14% respectively, right? Now what will happen is, of course, the input tax credit loss will show in higher cost.

If you look at the total growth is still pretty substantial in those two segments. The alignment needs to happen in the reporting.

The actual number continues to be, in our opinion, reasonably strong, specially given December was almost a three-week wipeout. We are typically prepared for December to be a 10-day wipeout, but December almost became a three-week wipeout because of the airline crisis, which started in the beginning and then continued because of the year-end, New Year vacation, and all of that, right?

Jinesh, I think in quarter 4, February onwards, you'll start seeing a pretty strong recovery to margins, but that's largely driven by revenue growth. You're right.

Pass-through has already started happening because revenues have started going up, but I cannot change the way the numbers are reported, which is the cost even reflected in the cost line items.

Got that. Sir, on the corporate side, when do annual renegotiations typically happen?

If it is nearby, are we going to take into account this ITC loss, which will be there with us, and then renegotiate for rates accordingly?

Answer is yes, because the customer clearly understands that if he was paying ₹100 of room rate and ₹12 of tax earlier, there was ₹112 being paid by the customer. Today it's ₹105.

If we account for a slight increase, he'll still be paying ₹112 or less than that. Jinesh, coming back, that actually helps increase demand, because while we can increase the room rate, offset the cost impact, the real growth for customer will still be 7%, 8%, 9%, right?

More important, Jinesh, the nature of business is changing now, right? We all who underwrite hotel sector needs to prepare ourselves underwriting the sold-out dates versus rest of the year.

We are seeing the demand compressed between few days every quarter. Let's say last quarter, it was November.

November would have contributed majority to the quarterly profits and growth. This quarter, it's going to be period starting from 20th January or 25th January till pretty much middle of March, right?

Therefore, in those days, contracted rates play very little role, because our ability to reprice hotels on a daily basis three times a day is very, very strong. Hotels which have an average rate of ₹13,000 are already priced for ₹20,000 in the month of February, Jinesh.

I think the industry has changed, the dependence on the locked-in RFP prices for the year and its impact on the average reported room rate is kind of diminishing every year. We're not worried.

I think the demand is very strong. You will start seeing fairly quickly this whole cost being absorbed, because we do feel that GST reduction is across the sectors and industries, which should help boost overall economic activity and give us the payback.

Got that. Sir, one last question from my side.

Our F&B revenue was up by about 9% in this quarter. I guess in the previous quarters, we had mentioned that ballrooms are under renovation, especially at Hyderabad and Pune.

Accordingly, we should expect some kind of a pickup happening on the F&B revenue side in second half of the year. This 9% growth, when I compare it with our same-store RevPAR growth of about 13%, it is still lower.

Just wanted to check on this part, whether those ballrooms are operational or not, and if yes, then why the F&B income is still lagging?

A couple of clarifications. The ballrooms are operational in both the hotels, Hyatt Regency Pune and Sheraton Hyderabad.

The same-store F&B growth was actually 10%, not 9%. The 9% is overall, and there is obviously incremental rooms that we've added in Holiday Inn Express and other portfolios.

And 10% F&B growth is actually pretty decent. While rooms have really outperformed at 13.5%, 14% RevPAR, but 10% F&B growth Y-o-Y This used to be 6%, 7%, Jinesh, till last year.

Now we've gotten to about 10% F&B growth Y-o-Y, I think ballrooms are starting to show impact. As they stabilize, I think you will continue to see that mirror close to double-digit Y-o-Y growth.

Got that, sir. Thank you.

Thank you so much, and all the best.

Thank you, Jinesh.

Hi. Can you hear me?

Great. Congratulations for a good set of numbers, sir.

My first question was regarding our upper upscale and upscale segment. We have seen bit of a occupancy decline for this segment particularly in this quarter.

Any particular reason for that?

Generally what happened in December, Vaibhav, the airline issues that we saw in December.

Only pertaining to that there was a bit of a

Because upscale tends to have group movements and conferences and MICE, and obviously such a significant airline disruption led to massive cancellations. That's why the entire occupancy, slight occupancy dip you saw was in the upscale, upper upscale segment.

Understood. Next on Trinity Bangalore, I understand Marriott had taken over operations for Trinity in August, and just wanted to understand how has been the performance post Marriott taking over?

Since now Marriott is operating the property, do we plan to delay the overall renovations planned for Trinity?

Vaibhav, while the team pulls out the exact number changes, I'll answer the second part first. The plan was to invest about ₹70-₹80 crores in full renovation for it to be converted to Autograph Collection and managed by Marriott.

What we've actually done is we've done an interim renovation. We've already spent about ₹7 crores in this hotel, largely towards fire life safety and technology.

We are going to complete a very small refurb program between now and March end, which is about ₹23-₹24 crores. With that, we think the hotel is extremely well-positioned to kind of move up on its rate chart.

In terms of its performance, if you see in July '25, this hotel was doing a total revenue of about ₹1.8 crores a month with a rate of ₹5,900, occupancy of, let's say, 55%, 60%. We have moved that revenue in November-December to about almost circa ₹3 crores average per month.

We've done that 50% growth in revenue, a little bit more than 50% growth in revenue. The rate is now sitting between ₹8,000 and ₹10,000 on a monthly basis in October, November, December, and occupancy being around 50%.

While the occupancies has remained the same because of renovation, we have pushed the rate almost 2x of what it used to be prior to the Marriott management. Therefore, the resultant asset income has gone from ₹1.8 crores a month to almost, I would say, ₹2.5 to ₹3.5 crores a month.

Yes, there is a sizable impact. As we complete the current ongoing refurbishment, which gets completed by end of March, the next fiscal year this hotel should start seeing very strong, consistent performance.

There's no interruption for renovations for full FY '27.

Understood, sir. Just lastly on our recently added inventory including Kolkata, Whitefield, Bangalore, and now the Sheraton Hyderabad and Pune as well.

How has been early demand trends in the new inventory? Has the full absorption happened?

The impact in FY '26 is going to be small, but FY '27 is when they'll start really impacting. I'll give you one example for Whitefield hotel.

We were just checking those numbers earlier, and sometimes you have reporting anomalies. For instance, Whitefield is an existing operating hotel, is classified as the same-store.

We suddenly realized that the total revenue growth is 15% in rooms, but the RevPAR growth is 13.5%, and mathematically it's incorrect. When we dig deeper, we realize that Whitefield hotel, because of those 56 rooms, has seen a room revenue growth of almost 45%, right?

Those 56 rooms being added to a existing 160-room hotel saw that hotel revenues jump by almost 45% because of rooms are slightly larger. Calcutta is stabilizing really well.

It's, interestingly, even though people don't talk a lot about Calcutta, it is a silent performer. That hotel is stabilizing quite adequately.

It was almost doing an occupancy of 62% in the first few If you see from July till December, the average occupancy is about 62.4%. The rate is almost upward of ₹4,000, it's almost touching ₹4,500.

It has contributed almost ₹6 crores since opening to our top line. All the hotels are stabilizing really well.

Sheraton Hyderabad, it has just gotten added, you'll see impact of that coming in February and March. Same for Hyatt Regency Pune.

Understood. Sir, our expansion pipeline shows status of development is still into design stage for all of our planned greenfield projects.

Are you confident that you will be able to execute projects within two to two and a half years to stick to the mentioned timeline?

If you see slide number 18, we'll take this project by project. For instance, in W Hyderabad, the work is going on on site.

Actually, the mock-up should be ready in the next few months. It's an existing building and which is being retrofitted to being converted to a W.

In Courtyard Pune, Tribute Bangalore Whitefield, Tribute Jaipur, which is where you're seeing a lot of design, design, design, these are existing hotels, right? These existing hotels have to be taken through a renovation, which will start, let's say, in April or so.

The timeline between design and start of renovation and complete is not like a greenfield project, which is 12-18 months. If they start going into renovation in phases, they come back also in phases.

That's why you're seeing a lot of status being design. Coming to Westin Bangalore, the Westin Bangalore we will put it as construction when effectively the RCC starts getting casted, but the demolition of existing building has been completed, site leveling has been done.

We should start the piling, shoring in the next month or so. There's active work in all of those sites.

The only where it is through design is actually one Financial District Hyderabad and the Navi Mumbai project.

Understood, sir. Perfect.

Thank you so much, and all the best.

Thank you.

Hi. This is Rajeev here.

Good morning, sir. Sir, I am on slide 13 and 14.

This is the same-store RevPAR, same-store RevPAR. If I just take that, and for this quarter it is looking like the incremental margin on this revenue is close to 44%, but considering that we are, we have grown RevPAR at 13-odd percent, and in previous year few quarters we are seeing that this number shooting up to close to 60%.

While the revenue is driven more by room revenue, ideally the flow-through should have been higher, right? Any thoughts on this?

Thank you. Sorry, Rajeev, you were on the call.

Can you start your question again?

Yeah. I was talking about slide 13 and 14, which is on the incremental revenue and incremental EBITDA.

If I were to calculate incremental margin for this quarter, it is close to 44%. Considering that it is largely driven by room revenue, which has grown at faster pace, the flow-through should have been higher, right?

Because we have in the previous quarters, we have seen this number hovering close to 60% as well. Your thoughts on why the flow-through is lower.

I think, Rajeev, a large part of that was the expected drop in revenues in December, and that's why the flow-through is only about 45%. You're right, this should be ideally about 55%

to 60%. No, our growth would have been 19%.

Yeah. I think it's largely because of the December impact.

What happens is that every hotel is prepped for a certain quarter in terms of the revenue buildup, and therefore, we saw strong revenue buildup for the quarter. Accordingly, some of the adjustments to the operating structures, payroll, and outsource staff and all of that is done.

The sudden drop in revenues in the two weeks in December kind of made us slip on that flow-throughs, which typically should be in 55-60%, and this quarter was 45%. You're absolutely right, there's a 10% slip in the flow-throughs.

Yes. Secondly, about your comment on let's say demand getting compressed in some particular dates, what is the metric we should follow to just get a sense on let's say for the upcoming fiscal or the next fiscals, where how do we track this compression in the sense dates, any metric you track?

Rajeev, we track metrics. For instance, we have this demand compression graph where we say how many days in a year the occupancy was in which bands.

Okay? Let's say, how many days the occupancy was between Thankfully now there is no 0 to 30.

We had prepped it in the COVID time, we had a graph for 0 to 30, 30 to 50, 50 to 70, 70 to 90, and 90% plus, which is pretty much sold out, right? We do track across the portfolio and by hotel, what is that sort of demand compression that we are seeing, and also how is the rate responding to those buckets.

Therefore, what was the average rate in the 70 to 90 bucket, and when the number of days the occupancy was above 90%, how did that rate move up and did we really yield those days. We are tracking that.

What we'll do is, Rajeev, we used to put the SAMHI Intel page. We will include that back where we'll show you this demand compression chart so you can see what's happening.

Gyana, this is entire year, right?

For three quarters.

Just show me this number.

Yeah.

I'll give you an example. What's happening is for the last three quarters if you see, the days the occupancy was upward of 90% is almost 30%.

So 30% of all days in the last 9 months across our entire portfolio, the occupancy was upwards of 90%. Incremental 28% of the days, the occupancy was between 70 and 90%.

If you add those together, you're almost at 50- 60-odd percent, 57% when the occupancies are upwards of 70%. The other data that we need to see is how does the rate move.

For instance, if the average rate between 70 to 90 bucket was ₹6,826, the same rate became ₹7,500 in the days the occupancy was above 90%. You can see how much do you yield between 70-90 and 90 plus, right?

If you talk about days when you're 50 to 70%, the actually rate was only ₹6,000, right? You're moving from ₹6,000 to ₹7,500.

We do track this demand compression trends across hotels and for the portfolio, which is what is showing us the fact that increasingly it's about yielding that one-third of the year really well, and that creates the whole Y-o-Y growth, that creates the whole flow-throughs. All of that is a gift of that demand compression.

Just a follow-up on that. This shifting of bucket towards let's say higher-yielding or where demand is stronger, how far forward let's say the visibility we have in terms of giving confidence that FY '27 is looking stronger than FY '26, or let's say before that?

I can give you the secret sauce, but as they say, I can give you the recipe, but you can't get the sauce yourself, right? I think the answer lies in mapping holidays, because they are very predictable, Rajeev, and today you can map all the holidays on the graph.

Increasingly you have to account for certain event risk. Now the event could be different.

Event could be India-Pakistan, or Ahmedabad, or monsoons, or an airline crisis, or something, right? What we are learning is, besides that mapping those holidays, you have to also map unknown events in different parts of the year, and then layer up the positive events, the large group movements, the conferences, on and so forth.

I'll give an example, Goa is going through a conference for oil and gas. I don't think one can find a room in Goa in the next 2 weeks or so.

Similarly, when conferences happen in Bangalore, you can sell a room for ₹30,000, ₹35,000. Events are booked much in advance, actually.

You have ability to kind of map, I would think, 65% to 70% of how the demand compression will work. The balance 30%, I hate to say this, is short lead, where your revenue management team and your ops team needs to be really on up on their feet to respond fairly quickly.

Sure, that's very helpful. I'll reconnect on the SAMHI Intel bit maybe offline.

Thanks. Thanks, Rajeev.

Hi. Thanks for taking the question.

I had only two questions. Kindly excuse me if you have already answered because my line was bad.

Just want to understand your quarterly performance and if I look through the cost line items, I can see a huge jump in something called fixed cost and variable cost. What is going on there?

On the employee side, because of the new labor codes, you have booked one-off 11 million. Then going ahead, because this will become normalized next year, right?

How would this impact your employee costs? Thanks.

Achal, first things first, when you look at the operational efficiency chart, which shows individual cost head, the growth that you see there is largely on impact of the input tax credit that we would get. You would get input tax credit across each line item.

How would you adjust for that?

It goes as a cost in each line item.

In each line item, like that. Achal, you will see the GST input tax credit getting kind of spread across all the key cost line items.

That's one reason why you see slightly elevated cost across, let's say, fixed or variable or all others. Actually, variable typically remains between 19% and 21%, it's 20.

20-odd percent, it's pretty stable. It's largely going into your fixed cost.

That's largely a GST impact, which the input tax credit is getting added to the expenses. Number two, you're asking us about the labor code.

One time has been taken. In any case, for the next 12 months, it's an implementation.

We'll actually reset the overall salary structure. Good for us that we were actually calculating the entire cost at 40% of base or the wages.

The way the wages is defined. We'll only have to move from 40 to 50, and a small percentage impact on that of gratuity and leave encashment, which also depends as to how many people actually stay with us for those many years.

It would not be much, a major increase in the overall cost as we move forward. One-time impact has been taken off completely.

Thankfully, because of being a young company and high attrition, our impact was only ₹1.1 crores against some of the peers which has, for instance, shown very high number. Rajat clarified that we were already at a pretty progressive 40% basic to total CTC, and the regulation is only recommending it to be 50%.

We really don't see any sizable, noteworthy change to the payroll structure.

Perfect. Thank you.

Yeah. Thank you for the opportunity.

My first question was regarding the RevPAR. We have consistently seen double-digit growth in the RevPAR for at least the three quarters this year.

In the shorter term with a higher base of Q4 last year, and if we want to look at a longer term of 2-3 years, do we see a sustained double-digit or a low-teens growth in the RevPAR, and what will drive the same?

I think not just for the current quarter, but we've always mentioned that our demand-supply modeling tells us that the total revenue growth, which is largely being attributable to RevPARs actually, will remain in high single digits to early double digits. A double-digit RevPAR growth is clearly something that we are fairly confident will be maintained in quarter 4 in spite of there being a very high base last year.

We don't see any risk to that.

About the longer term, sir?

While we've mentioned that in the long term, we expect RevPARs to remain between 7% to 11% same-store. 9% to 11% CAGR for the next 3 to 5 years on same-store hotels.

I think that same-store is something, apologize that we keep repeating, but for us, it's really important that all these KPIs are being discussed on same sets of hotels where they have not gone significant change. Yeah.

Okay. Next, a bookkeeping question.

How do you see the tax rate for the full year FY '26 and years coming forward?

Can you repeat the question, please?

A bookkeeping question, tax rate for the full year FY '26 and FY '27 and beyond?

See, we are actually sitting on a huge losses. At least over the next 3 to 5 years, we don't actually see any significant tax outflows.

What you would actually see is some bit of a reversal or deferred tax asset being created in our books. After that, it would actually be a non-cash tax line items that you will see in the P&L, but there would not be any consequent cash outflow that we see at least for the next 2 to 3 years.

What will be the percentage-wise quantum of the just the book entry?

He's talking about ₹7 crores, you have.

That's the deferred tax expense which is there because on certain assets which actually have turned profitable, that's about 25% of the profits of that particular hotel, which is there. On a consolidated basis, it reduces because you will have to look at the tax expense only for those entities where deferred tax has been created.

Okay. That was helpful.

Fine. That's all from my side.

Thank you.

Hi, team. Thanks for this opportunity.

Just a couple of questions from my side. Firstly, how are the corporate negotiations for CY '26 faring till now in terms of does the number of rooms and the ARR increase that is being agreed on?

Secondly, what would be the break-up between the EBITDA margins between the ACIC portfolio and the rest of the portfolio? How much of more integration and margins can be still expected?

The first question is, and I think we tried addressing it earlier, the whole concept of RFPs driving the average rate is sort of becoming a little not that relevant, because as I said, there is very few contracts with last room available provisions. Dynamic pricing is becoming real and more and more real, and that's why you're seeing the ability for a hotel to price when it's above 90% at almost 25% premium to, let's say, a day when its occupancy is 50%.

That shows you that the pricing power sits squarely with the hotel today. In terms of the RFPs, we are seeing a really healthy acceptance of RFP growth, and I'll tell you why, Samarth, because last year what has happened is companies realized that on sold-out dates, they had to really book through, let's say, an online discount or BAR, which was really, really high.

They're also realizing that the net rate they pay through the year was really high compared to the RFP rates, and therefore, resistance on our RFP rate increases kind of becoming a bit of an old-fashioned conversation, to be honest with you. The second question was EBITDA margins.

If you see the asset level EBITDA for same-store including ACIC is 40.1%, and for ACIC is 40.3%. Now ACIC is fully integrated in terms of its EBITDA margins.

It's reporting the same 40% EBITDA for both same-store non-ACIC and same-store ACIC.

Got it. That's all from my side.

Thank you.

Thank you, Samarth.

Hi, sir. Congratulations on the results.

I just have one basic question. Our hotels are divided into three categories, wherein the upper midscale segment, the ARRs are in the range of ₹7,900 or so.

Now there would be hotels which would have ARRs below ₹7,500 and above that as well. Just wanted to understand that, would we face any issues in terms of raising prices in this particular category?

Because the customer would end up paying a lot more, 18% 18% versus 5%, which they'll be paying earlier. Just wanted to understand your thoughts on this part.

Gazal, the GST is a beautiful puzzle, because it doesn't happen by hotel, it happens by every room that is sold. I can tell you, even in upscale, there are hotels which have had 20% of its room revenues coming from rooms sold below 7.5, and to that extent, a pro rata input tax credit is lost in that hotel.

Pricing is a daily job for each room, and there will be acceptance and resistance depending on how busy the city and the hotel is. I really don't think that increasing the price is linked to GST, it's about demand and supply.

We have seen rate growth being extremely strong for last several quarters, GST, no GST, incident, no incident. It's a factor of only demand and supply determines the pricing and nothing else.

Demand remains really strong. Supply is non-existent or near non-existent in core markets, and therefore, the confidence level that RevPAR should continue to grow in early double digits.

It's all going to be decided by demand and supply. Again, I'll repeat the cost of repeating, it all depends on those days when the demand is so compressed that effectively you can reprice your hotels with high efficiency.

It's demand and supply and has nothing to do with GST, non-GST. The day after GST was implemented, the hotel rate went up by 15%, let's say.

One could argue that 12% is, 7% is just the GST impact because the customer is saving 7% GST, but it's just hypothetical. The real thing is, what is the real rate growth and it's demand and supply.

That's helpful, sir. Secondly, on the asset recycling part, is there any update on that segment?

Because last quarter, we had mentioned that there is ₹135 crores of asset recycling which is still pending. Any update on that front?

No, the only thing is that asset recycling, we have completed large part in the last, let's say, 3 years or so. At this point, we still feel there are one or two hotels where there is a recycling opportunity, but we don't have any definitive agreements or decision on that as yet.

It's a part of our plan, and I think we'll give ourselves another 12 to 18 months to execute that.

Okay. Thank you so much, sir.

Thanks a lot.

Thank you, Gazal.

Yeah. Sir, just two questions.

Sorry for probing further on the GST point. For that customer who was paying, you gave an example, ₹100 and ₹12, but that ₹12 was available as input tax credit, but now it is not available.

For your customer, the price has gone from ₹100 to ₹105 effectively, because he doesn't have the ITC. This 5% impact, when you have gone back to, let's say, your corporate customers, what's been the outcome of this?

When you have, let's say, less than ₹7,500, what has been the mix of the outcome? What is the weighted average impact on this after all your negotiations?

No, there is no negotiation, Hitaindra, on GST with the customer on a real-time basis, right? I will again repeat, hotel prices are decided every single day.

I do a revenue of ₹2.5 crores a day on a weekend, I do the same hotels ₹5.5 crores on a weekday. It's not that you're negotiating with a large company or Microsoft on a daily basis or monthly basis or quarterly basis, right?

The hotels are being priced, and I repeat, on a demand and supply, right? Now, GST, you're right, in the midscale segment, on that given day, if you were to assume the rate was ₹100, the customer is paying ₹7 less GST.

The input tax credit is being lost by us, not by the customer, right? Again, the hotels are being repriced on a daily basis.

Same segment has reported a 14% to 16% revenue growth. I'd like to believe some part of that was because for the customer, the real rate growth may not have been 16%.

Again, not easy to say that, because the rate growth is being reported on a weighted average basis, whereas the GST, 5% to 7%, depends on So let's say Rajat buys a room for ₹7,000, the same day I'm being sold a room for ₹8,000 in the same hotel, right? On that pro rata income that Rajat has given me, I lose input tax credit, on mine I don't.

It's just not possible to determine for those rooms which were sold for less than 7.5, was there a price increase? I know we would like to calculate it to the last level, but it's just not possible mathematically.

We'll have to agree to the fact that the total revenue growth in the same segment where GST is most applicable has been 14% and 16% Y-o-Y, in spite of 3 weeks in December being wiped out, right? Let's feel good about the fact that the demand remained very strong, the pricing power remained with the hotel, and yes, in the short term, there is a Y-o-Y margin impact, but that'll really disappear as we kind of start absorbing this revenue growth.

Also, not all the customers actually can take the benefit of the GST credit, whether in this era or earlier. The way credit can be taken by a corporate customer if they have their office which also has a GST number in the same state where the hotel is.

If somebody is travelling from Delhi to Bangalore and he's actually being charged GST in Bangalore, he doesn't have an office in Bangalore, he can't take the GST credit for the stay he's doing. It's not that all the corporate customers are actually losing or gaining because of the GST.

Some of them are, the only thing is for them the price has reduced on an overall basis. Instead of say ₹118, they are paying ₹105 now, just as an example.

Yeah. Hitaindra, sorry, but there is no unfortunately a very easy answer to this.

It's extremely complicated, and therefore, we should remain focused on what's been the real revenue growth in that same segment. I think we're very confident that the revenue growth is so strong that even this margin compression will disappear in the next quarter or two.

Yes, sir. This is well understood.

In fact, you're right. I think the corporate customers who don't have the office will not be able to avail, and also the individual customers anyways were not availing.

For both these categories, it is cheaper. This is well understood, sir.

On the pipeline of expansion, so, I'm referring to slide number 18. You have around 1,900-odd rooms that you have laid out that are going to come up till FY '30.

What about the other inorganic opportunities or the pipeline if you can throw some color on that? Is it even possible given the balance sheet constraints that on body?

Hitaindra, I think I did mention in my opening remarks that we continue to have a pretty interesting, actionable pipeline of variable leases. That kind of also addresses your second question about financial capability.

I won't even go to balance sheet as it exists today, because we are at 3x net debt to EBITDA. A significant amount of our capital is invested in assets which are not producing EBITDA today.

If you were to only put debt on assets which are currently operating, our net debt to EBITDA will be 2.5x or so, right? The balance sheet is pretty in a solid state.

If TTM free cash was ₹300 crores, but if I take the current interest rate level, because GIC investment happened in July May, and therefore, the reduction in interest rates happened subsequent to that. If I take current interest rate, but historical EBITDA, our free cash will move from ₹300 crores to ₹350 crores, should be circa ₹400 crores plus in the next 12 months because of the growth in earnings.

Trust me, ₹400 crores of free cash for a company like ours is more than adequate. Variable leases on the first day require ₹5, ₹7, ₹8, ₹10, ₹15 crores investment, and your partner has to invest majority of the capital before you move in into the fitouts, right?

I think the variable leases is our answer to continue to grow without really putting any pressure on our balance sheet, because that only barely uses the free cash that the business produces. A large part of our committed CapEx is in large projects like Westin Bangalore and Navi Mumbai, which in all fairness, our CapEx cycle will only kind of bulk up starting FY '28, '29, at which point of time the EBITDA from W Hyderabad, the renovations, the Trinity Bangalore, all of that will also start kind of getting an impact on free cash.

I think we have adequate buffer, plus there's incremental ₹150 crores of investment pending from GIC over the next, let's say, 2 to 2.5 years. That also gets added to our free cash.

Hitaindra, we are sitting in a very comfortable situation, and I have confirmed earlier and I'll reaffirm that most of our current discussions on pipeline are all variable leases, which do not require us to put cash up for acquiring an asset. It only requires us to do investment on fitouts.

Okay. You also alluded to the ₹3,000-odd crore revenue ambition in the next four-odd years.

That is around almost two and a half times more than the current run rate. This ₹300 crore free cash flow that you have produced in the TTM basis, this is after including everything other than growth CapEx, I'm assuming this ₹300 crores.

That you also expect to go up in the similar fashion like 2.5x in the next 5 years? I'm assuming that this is without any incremental acquisitions that you may do.

Is that the right understanding, sir?

If you look at our Investor Day presentation, we have clearly articulated in that the total EBITDA accumulation in the next 4 to 5 years is expected to be in the zip code of about ₹3,000, ₹3,500 crores, and we've given a list of CapEx that we have reinvested circa on top of that. You're absolutely right.

The number is clearly 2.4x the current revenue run rate, but that's not a difficult thing, because majority of our new inventory that is getting added is all in the upscale, upper upscale space. Today if your revenue per key is, let's say, ₹25 lakhs per key, in the same period, the revenue per key for an upscale asset will be ₹50-₹55 lakhs in those cities where we have invested our capital.

This addition of W Hyderabad and the Westin Bangalore, some of the other assets, is also helping us maintain that growth rate. The ₹3,000 crore target that we have is based on two or three assumptions.

The same-store will grow between 9% and 11% CAGR in terms of revenue. Two, you will have incremental revenues coming from the growth initiatives that we've already invested in, by the way, and we're fully funded in terms of current cash and future cash flows.

That takes us to the ₹3,000. It does not envisage any new acquisition.

That's how we add up that ₹3,000 crores. Largely, only variable in that is that assumption of 9% to 11% CAGR on same-store revenue.

Since we made that presentation last year, at least for three quarters subsequent to that, we maintained our revenue growth, which is ahead of that.

That includes the impact of these 473 rooms which are rebranded and 1,458 new addition?

Everything, everything.

This ₹300 crore free cash flow that you have produced on a TTM basis before growth CapEx, so that you assume should also grow in line with revenue?

More than revenue, because there's always operating leverage. Typically, if you see, our revenue growth was 16%, our EBITDA growth before GST impact was 19%.

Eventually, you will go back to that mathematics as you kind of adjust your baseline. You have seen the EBITDA growth remain in excess of the revenue growth.

Then beyond that, our interest cost remains flat, and therefore, the cash growth continues to be even higher than that. If your revenue growth is, let's say, 14-15%, your cash growth will be substantially higher than that because of, A, operating leverage, and B, interest cost remaining stable.

Understood, sir. Thank you, sir, and all the best.

Thank you so much, Hitaindra.

Thank you, everybody, for a very engaging call. I would reiterate the fact that I know sometimes these small changes to the regulation distract us, but that had a 2% impact on revenue, and that revenue grew at 16% Y-o-Y.

We should remain steadfast focused on the fact that demand and supply continues to remain extremely favorable to the incumbent owners, operators in the sector in India. We're actually quite excited about the broader changes in the economy, including rationalization of GST, which is boosting local demand, local consumption.

That's the only reason we are surviving through several event risks, still coming out strong. What's been the most humbling data to see is that in our core markets for last 9 months, the net office absorption remains to be extremely strong.

Bangalore is touching 12 million square feet for a 9-month period. All other cities, Bombay, Hyderabad, Pune, NCR, even Chennai now is touching 6 to 7 million square feet.

I think with that backdrop, we remain fairly confident that our curve will remain at or ahead of our long-term target, and that helps us get to at least the targeted number of ₹3,000 crore revenue by FY '30. Look forward to speaking to you again next quarter, and thank you so much for your time.