Ladies and gentlemen, good day, and welcome to The Indian Hotels Company Limited earnings conference call for the quarter and financial year ended thirty-first March twenty twenty-four. On the call we have with us today Mr. Puneet Chhatwal, Managing Director and CEO, IHCL, Mr. Giridhar Sanjeevi, EVP and CFO, IHCL, and Mr. Ankur Dalwani, CFO Designate. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Puneet Chhatwal. Thank you, and over to you, sir. Good evening, everyone, and thank you for joining our global conference call for Q4 and FY 2023-2024. Today, we would like to focus on 10 key messages summarizing our performance, journey over the last financial year, and expectations for the future. First, achieving key our Ahvaan targets ahead of time. We embarked on a journey in 2022, wherein we set specific targets under our Ahvaan 2025 strategy. We are pleased to share that we have already achieved our key objectives well ahead of time. We aimed at achieving EBITDA margin of 33%, and we have delivered EBITDA margin of 33.7% in last financial year. We promised a portfolio of 300 hotels, and as of 31st March, we have achieved a portfolio of 310 hotels, including 19 pipeline. Our third objective of achieving zero net debt level had been achieved long back, and in fact, we have now surplus cash reserve of over INR 2,200 crores. Furthermore, we had promised a balanced portfolio, and now we have achieved a 60/40 mix of capital light versus capital heavy assets. To summarize on the first point, we promised and we have delivered on all fronts. Number two, best ever Q4 and full-year financial performance. We are very pleased to share that our record performance has continued in Q4, making this the eighth consecutive quarter of best-ever performance for IHCL. Our consolidated revenue grew 17% year-on-year to INR 6,952 crores. EBITDA grew 20% year-on-year to INR 2,340 crores, yielding EBITDA margin expansion of 100 basis points to 33.7%. More importantly, our bottom line grew by 26% to INR 1,259 crore. On a standalone basis, we continue to deliver stellar results, with revenues growing 20% year-on-year to INR 4,590 crore, and EBITDA margin expanding by 200 basis points to 41.3%. Some of you would recall, pre-COVID, our consolidated revenue was lower than what we have as standalone revenue in the last financial year. That brings me to point number 3. We delivered manyfold increase in return ratios. We have delivered superior returns, both in terms of return on equity and return on capital employed in the last six years. For that, since we began our journey with Aspiration 2022 strategy, since 2017-18, for that matter, our ROE has increased 7x to 14%, and ROCE has increased 3x to 15% in FY 2023-24. Moreover, IHCL's EPS has increased 11x from INR 0.8 in FY 2017-18 to INR 8.9 in FY 2023-24. Fourth, market leadership. IHCL continues to outperform the industry on RevPAR with a premium of 65% over the competition on pan-India basis. With presence across various price points, our hotels command healthy premiums over the industry in all key markets. We have around 100 hotels in the top 7 cities, with diversified presence across customer segments and price points. We are well positioned to capture the surging spiritual demand with presence in 50+ religious or spiritual destinations. Number five, our portfolio growth. We continue to demonstrate industry-leading growth with 53 hotels and 34 hotels opened during FY 2023-2024. This is the highest in any single year done by anyone. More importantly, with 218 hotels operational and 92 in pipeline, we crossed the milestone of 300+ hotels portfolio. IHCL entered into a strategic alliance with the Ambuja Neotia Group's Tree of Life Resorts, offering our sales and distribution network to its portfolio of 14 resorts across the country. Just for the sake of clarity, when I said this is the highest done by anyone, it is based on organic growth, and it is based on the pan-India figures and not the global figures. Number 6, unique mix of Capital Heavy and Capital Light. Our current operational portfolio has a balanced mix of 60% Capital Light and 40% Capital Heavy assets. The capital-heavy portfolio drives operating leverage and has demonstrated strong growth on the top line, but more importantly, at the EBITDA level on the back of effective asset management and strategic addition of new hotels. On the other hand, capital-light portfolio provides resilience. Our capital-light business is comprising mainly of management fees, and new and reimagined businesses currently contribute roughly 14% to consolidated revenue, and in the near future, contribution from this high-margin portfolio is expected to increase to 20% of consolidated revenue, which in turn will drive margin expansion for the overall business. Number seven: new brands and reimagined businesses. IHCL's new businesses vertical, comprising of Ginger, Qmin, amã Stays & Trails, The Chambers, and the reimagined TajSATS, reported a revenue of INR 1,600 crore. Obviously, this does not include the revenue of TajSATS, but of the other verticals that I just mentioned. At a growth of 35% over the previous year, new businesses grew at double the pace of core IHCL enterprise, which grew at 17%. New businesses now account for 12% share of IHCL enterprise revenue, showcasing an expansion of about 150 basis points from the previous year. Now I come to TajSATS. TajSATS clocked a revenue of INR 900 crore at 40% growth over the previous year, with a market share of almost 60%, maintaining an industry-leading EBITDA margin of 25.5%. Ginger reported a brand revenue of INR 486 crore, growing 34% over the previous year, aided by the flagship Ginger Mumbai Airport Hotel, contributing over INR 25 crore in the first full four months of operation. amã Stays & Trails achieved a portfolio milestone of 200 homestays, bungalows, with 103 added in the last financial year. So Qmin brand also achieved a milestone of crossing INR 100 crore in its GMV or brand revenues in FY 2023-24. Finally, IHCL will also introduce a new brand, as we announced on the last call. This is our reimagined version of Gateway, a full-service hotel offering in its new avatar in the upscale segment. This will be a similar story like the Ginger, which was reimagined in the years 2018 and 2019. The Gateway brand rollout will commence with 15 hotels and will scale to 100 by 2030. Number eight: strengthening competitive advantages. We remain committed to investing in our assets and building our capabilities for the future, thus strengthening our competitive advantages. IHCL in FY 2022-23 commenced a 5-year capital deployment plan of over INR 3,500 crore towards asset upgradation and select new strategic investments. This includes strengthening of our digital capabilities with new brand websites, implementation of new ERP system, and data lake for advanced analytics with AI and ML capabilities. Some of these launches, especially on the new brand sites, you will start seeing from the first week of May onwards. That means in 8 days from now. Number 9, Paathya, our industry-leading ESG plus program. We have achieved significant milestones this year on our ESG plus program, and IHCL now uses 37% energy from renewable sources and has installed 343 EV charging stations across 142 locations in India. Continuing our journey of eliminating single-use plastic, IHCL has installed 40 bottling plants and achieved 48% recycling of the water that is used. IHCL also partners and operates 32 skill centers today across 15 states in India. Finally, maybe the most interesting for all of you: what can we expect going forward? And rightly, it's the number 10, on the list. We feel that the hospitality industry upcycle is expected to be a long and sustained one. Of course, every now and then there will be some headwinds and some drops, but eventually, nothing better than COVID can, you know, give the proof of the resilience of this sector. So accordingly, also, experts like Horwath HTL have predicted that demand will grow at a rate of over 10% annually for the next 3-4 years, while the supply will continue to lack demand. Most of the future supply is expected to come outside of the key markets or non-tier one cities. We are very much, as IHCL, in sync with what Horwath has been guiding. Within the IHCL context, we expect to deliver consistent double-digit top-line growth, therefore, with sustained margins and continued portfolio growth, with a target to open 25 hotels in FY 2025. We had guided 20 for last fiscal. If we include Tree of Life, it's 34. If we exclude that, it's 20 hotels opened as we had guided, and we are very much confident of opening a minimum of 25 hotels, and that's the guidance we are providing... Our new business will continue to grow also over 30%, in the next fiscal, which last year was at 35. As the base gets larger, the guidance you can expect, will be in the range of 30 now and going forward maybe at 25%. Our focus also remains on evolving our brandscape and strengthening our competitive advantage with extremely prudent capital allocation in strategic opportunities. However, we are very well positioned with the cash position that we have, with the zero net debt that we have, to take advantage of any strategic opportunities that might come our way. Our new dividend policy has been approved by the board, and we have proposed to declare dividend at a payout ratio of 20% of consolidated PAT for that at INR 1.75 per equity share at 175%. This is subject to shareholders' approval, as we all know. Thank you so much for your attention, and we now open the floor for questions. 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 touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. One clarification and one question. Just on clarification, on slide 51, when we talk about 4% ARR growth, this I assume is including Ginger Mumbai Airport, right? So which is why the number looks lower than what it was at 245. One second, Binay. We are looking at it. So occupancy, is that ARR? Yes, it includes all brands, not just Ginger, but all brands. Yes, it includes Ginger Mumbai Airport. Then also, Stand-alone. No, sorry, it's only Ginger Mumbai Airport and Standalone. So yes, it includes Mumbai Airport. Yeah, because that would have, to an extent, diluted the room rate growth. Yes. And, secondly, just, slide 47. If you look at the Taj business, you know, we are breaking it into business, leisure, and palaces. Could you give us a little bit of a revenue breakdown also on these three segments? And question relating to that, where do you see more scope for occupancy improvement or room rate improvement among these? Where do you see a pushback in quite well for incremental opportunity to expand occupancy or room rate looks limited? So that's the second question. Thanks. Binay, our you know, there is a nominal increase that you expect every year. But very important for us and our portfolio is our not like for like growth. And with the company growing at the speed at which we are growing, also the new openings dilute that percentages that you see. See, it's not just the Ginger Mumbai Airport and Standalone, but if you take the overall picture, then even if it says like for like, for example, you know, it takes three years normally for a hotel to stabilize unless it's opened in extraordinary circumstances. So established property, let's say, like Taj Lands End and Taj Mahal Palace in Colaba, will have a different kind of increase versus, let's say, we have opened Taj The Trees in Mumbai. There is a ramp-up period. So with this high growth, in one way we are doing it because we would like to see these percentages, but maybe we need to show it differently going forward, saying: What is it for hotels that have been in operation for a minimum period of three years? And how does that percentage growth look, and how does the new one look? So the new one helps you that when the headwinds come, they're all adding, because most of that is on Capital Light. But it comes at a disadvantage that it dilutes the figures, because technically we include all hotels which have been in operation for a minimum period of one year. And then I think to your previous point, if you were to exclude GMA, the ARR would have grown by about 8%. This is on the previous question that you had. Yeah, yeah. Because, you know, GMA, the worldwide average would have come down. Yeah. No, no, I, I think, thanks for that. And, Puneet, I think your point is very relevant, especially when you look at the pipeline ahead also. We will see a lot more management contracts coming in. So to an extent, I think this slide in particular will look a little diluted. But just last question, any commentary on the near-term trends, you know? Like, how are you looking at demand in this quarter, April, May quarter? I understand sequentially it is weaker. More on YOY basis, how do you see? You know, we. What we are saying is what we believe, and we think that top line double-digit growth is what we feel is going to happen. Now, if in one quarter is in 9% and in the next one is 11, still the average would be 10. So I'm not saying it's 10, it could be 11 and 13, so I think anything which is north of 10 on an average for the year, we feel, is a realistic number going forward. Because, again, that base has become larger. To keep doing 18, 20, 22% growth is possibly very aspirational and ambitious. It's not impossible, but is aspirational and ambitious. So anything which is north of 10 gives us a very good platform on all metrics that I mentioned when giving those 10 important points. Great. Great. Thanks for that, Puneet. I'll come back in the queue. Thank you, Binay. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Yeah, hi. Thanks for my question. Thanks for taking my question. So first of all, Puneet, just wanted to understand about MICE business. So, I mean, you know, so do you think the MICE business has normalized and back to pre-COVID levels? Or you think there have been few structural changes, i.e., bigger conferences, fat marriages, you know, I mean, and which are significantly positive, and do you see a sustainability there? So, so if you could please give us a bit of a color in the, in terms of MICE, MICE business, especially pre-COVID now versus now. See, in our estimation, this business is kind of grown by 17%. Share of the- Of the share of revenue for our business is 17%. But I think India is going through a structural change. We have not even reached 5% of the possible MICE business by just the addition of Yashobhoomi in Dwarka and Bharat Mandapam in Pragati Maidan, and the convention center in Kolkata, and the one which is ahead and are getting more close to doing well is Jio in Mumbai, right? So I think taking the MICE out of the hotel business, because when you have events where 2,000, 3,000 or more people could come in, in one single hall, that kind of infrastructure never existed. So this is opening a big new opportunity. In terms of weddings, that is maybe a specialty on the Indian subcontinent, and is going to stay a very important element of the culture and of the culture of celebration or as a culture of social gathering. And, we are seeing no change when it comes to weddings. There is nobody, you know, worried about going into a hall because there was COVID. I think all that fear is gone, people are back and meetings are happening in a normal way. But what we have not yet seen is global events coming to India. We recently hosted, in the month of February, the global conference of Coke, as an example. Or, you know, 8, 9 months ago, I don't remember the exact month, we had the launch of the new Dior collection at Gateway of India. So you'll start seeing, or India will start seeing and witnessing more and more of these events, and hopefully, as the largest hospitality ecosystem, we continue to benefit from it and it's not a one-off like a G20. But also a G20 has created the infrastructure which will benefit hospitality sector going forward. Achal, maybe one simple answer here is, not only it's gone back to what it used to be, it has improved. And when it comes to new facilities, we are not even at 5%-10% of possible utilization. Right. Fair enough. Very clear. Other thing I wanted to understand, you just spoke about the Gateway Hotels, and you mentioned that you want to have 15 hotels and then probably end up by 100 hotels, by 2030, if I understood correctly. So, I mean, what is the logic? I mean, why you want to have additional another brand, and where, how you think you want to position it within your existing, Taj, Taj SeleQtions and Vivanta and all? So where exactly you see this Gateway Hotels to be placed, and what is the logic? I mean, what kind of benefits do you see? What synergy do you see? I mean- Excellent, very good question, Achal. I'm glad you asked it. See, Taj, we have worked a lot on the last 5 years in upgrading and investing in Taj, and rightfully, it got acclaimed as India's strongest brand across all sectors, by Brand Finance, and also world's strongest hotel brands for, you know, in the last 3 years. And this year, the verdict is going to come in June. Now, Taj is and was always a luxury positioning. Somewhere it got diluted for whatever reason, 20 years ago, when we added by Taj in Vivanta and The Gateway Hotel had become Taj Gateway. So when we started the journey of Aspiration 2022, we put the Gateway brand in the drawer, and we always communicated and guided. We will bring it out when we have the critical mass in the brands. B, when we have clarity on the brandscape and how an evolution in India could take place. C, when we feel now is the moment, and that's what we feel is now, because your tier two, tier three cities cannot afford a Taj.... as the cost to build a Taj and your ability to charge are not in sync. So if you look at the press release that we have given and the destinations that we have given, doing a Taj Hotel there would be a challenge. At the same time, we reimagined Vivanta five years ago, and we said Vivanta is what it was supposed to be. So we want something which is very chic, very boutiquish, and that is not a brand that will fit into, let's say, every possible location, like a Karnal or a Barnala or et cetera. So these are the tier two, tier three cities which are coming up very strongly. And, that's the, the ethos and the, the style of the brand, is done in such a way, including its uniforms, that it would not fit in in such destinations. Plus, we have limited Vivanta with banqueting spaces. We don't want to have too much wedding and all that kind of business because either you are a mass brand or you are a chic brand. You cannot be both. Now, SeleQtions is very easy. It's a collection of names, names that are a brand in themselves in their relevant marketplace. For example, The President in Mumbai is a part of SeleQtions. The Connaught in Delhi is a part of SeleQtions. The Ambassador in Delhi is a part of SeleQtions. The Blue Diamond in Pune, The Savoy in Ooty. These are all names which are very well established over several decades, if not a century. So I think this was a gap that we had, but we had not reached 100 Taj hotels, and we were not close to 100 Ginger. Now that we have crossed in the portfolio 110 Taj branded properties, and Ginger, in the next few months, should get close to 100, it's already at 90, is the time to launch this brand, which will be upscale, full service and a Gateway to that city. It will be a very regional brand which will have all the important characteristics of that city. So Gateway in Nasik will represent in its artwork, in its style, in its arrival experience, a Nasik. A Bekal in Kerala will represent Kerala. So I think this way we go out and become a very good in a traditional, you know, world, we would say a very nice four-star full service brand, and in the modern world, we would say it's an upscale full service brand. And we are also launching it because we are very confident of getting quickly to a critical mass of 50 hotels in operation and a portfolio of 100 very soon. And we start with 15. We already start with double digit. We're not starting with something - we build one hotel at a time, and it takes another 20 years to get to the 20, 30, 40, 50. And that's why we have given the list in the press release of the names of the properties as well as the quarter of their opening. I hope this clarifies some bit. The rest, whenever you visit us in our office, we can show you on a chart. No, that's very interesting. Very, very interesting. I think that, I think that's a great idea. Thank you so much, for, for giving the clarity. My final question, if I may, please. If you could please, share a bit of a plan in terms of your CapEx, which you mentioned that INR 35 billion, and you already spent INR 10-11 billion, so which means you want to spend additional INR 25 billion in the next 3 years, especially on the digital and IT spends. And are you, I mean, are you collaborating with the, with the broad Tata Group, especially in terms of, you know, airlines? I mean, they have Air India and also I've been thinking about this. But recently I could see, very surprisingly, IndiGo quietly launched a link on their website, of where you can book the hotel. So, do you have that kind of plan wherein you are collaborating with Air India, and they can sell the holiday business wherein, you know, they can get the link or so? So, I just want to understand your close, close collaboration with Tata Group and your plans on the digital IT spend. How do you see the benefits from there? We are a Tata Group company, and we always looked at synergy possibilities with all group companies and not just airlines. But you are right, because somehow airlines, hotels, flight catering, all this go together. So that part is there, but I think there was a lot of work to be done on Air India. They are getting close to a lot of initiatives that they have taken, and during the course of this financial year, we will try to align ourselves on strategic fronts. But maybe you should be asking this question again in a couple of quarters. But that does not mean we don't collaborate today. We do collaborate. We went out and built the Maharaja Suite at Taj Mansingh. We do wherever we can, meals for them. We are doing almost all meals for Vistara in whatever stations we are, except for Hyderabad. So there is a lot of that collaboration that is already happening. It's not that that is not there. And, I think, if Air India was to join the loyalty platform of Tata Neu, that would be another new game changer completely for us. So sometimes it's not direct. It could come through other companies, and at some point, I'm sure they will also join, like other companies have. As they tend to benefit, Tata Neu will benefit, and indirectly, you know, group companies like us will benefit. So, I remain extremely optimistic, not cautiously, but extremely optimistic about the synergies driven also under the leadership of our group chairman. Thank you so much, and I wish you great luck. ... Thank you. Our next question is from the line of Shaleen Kumar from UBS. Please go ahead. Mr. Shaleen Kumar, your line is unmuted. You can proceed with your question. Hello? Yes, Shaleen. Good evening. Good evening, sir. Congratulate on the good set of numbers and good closing to the year. Continuing with Achal's question. Shaleen, there is a lot of disturbance. Mr. Kumar, if you are using the speaker mode, may we request you use the handset mode to ask the question, please? Mr. Kumar, we are not able to hear you. Hello. As the line of the current participant is not clear, Mr. Kumar, if you can hear me, you can rejoin the queue. Audible? Hello. Yes, Mr. Kumar, if you can use the speaker, or if you can use the handset mode to ask the question. Hello? Yes. Am I, am I audible? Sorry, I don't know what happened. Yes, sir. Please go ahead. So I just repeat my question. So I was thinking, you know, I think you guys are still conservative when it comes to your CapEx guidance. INR 3,500 crores of CapEx in next five years. But you guys can be generating, like, INR 8,000-INR 9,000 crores of free cash during that period, right? So do you think you can be a little aggressive on that, that front? Shaleen, I think the guidance is INR 3,500 crores over 5 years, out of which we said the program started two years back. So effectively, it's about INR 2,500 crores for the next 3 years. And if you look at this year's CapEx numbers, we've done about INR 650 crores, INR 637 crores. So essentially, we're gonna build on that. And, you know, I think in the last quarter, we did mention some numbers about what we think we'll do next year. We think this is what we can do if, you know, business as usual. Of course, if there are opportunities which come up, you know, which Mr. Chhatwal referred to earlier, on an organic front, then of course, that can become another area of, where the capitals can get deployed. But as we see things today, about INR 2.5 crore of incremental CapEx over the next three years is something which we think should be possible for us to spend. And this is on three main areas, which is basically renovation, which is, you know, an ongoing thing we do. Mm-hmm. Also, you know, on the IT side, which is actually a very big focus for the company for this year. Mm-hmm. This and next 8, next 18 months. 18 months, yes. Sure. So effectively, we are saying that this is the visibility right now. It could obviously evolve, right? Because definitely we will have cash to deploy. Absolutely. That's right. Right. Right. Right. So, second thing, just want to understand on the, on the current performance, I mean, I saw a jump of, other expenses, right? And I think there is a way possible to quantify or give some position on that, because then our actual EBITDA should be more than what it has been reported. So, Shaleen, there are one-off items which we have actually mentioned in the note on the other costs. If you see our cost structure- Mm-hmm. Most of the, all the costs are actually below as a percentage of revenue if you compare with previous year. The cost, which has gone up to the other costs, and there are two elements to this. There is one-off items, and if you were to correct it for that, then the gap between, you know, the previous year and this year actually is negligible. And secondly, and any of these costs are in the nature of one time and which were kind of incurred this year, and we don't expect them to be repeated next year. Secondly, a large portion of the increase is linked to revenues coming from licensed hotels, where license fees have been higher. And the license fees are part of other costs, because of which the percentage is looking higher. This is a mixed effect, which should actually correct in the next years. Yes. So, just to clarify, Shaleen over here, that you're saying that my other expense, other operating expense, would have been similar to previous year had this one-off not been there? Yes. If you, if one-off was not there, the one-off was there in both the years, as in previous year as well as this year. We were to correct it for the one-off, the numbers would be closer to 29%, as opposed to, you know, 29.2 or 28.4, which you're seeing right now. Right. So that's roughly, roughly, 150-100 basis points margin could have been, could have been better, which we should see from the next, 4 Q onwards. Next quarter onwards, yes. Yes. Okay. Then it's a great show, guys. Great show. That's it from my side. All the best. Thank you. Thank you. Thank you. The next question is from the line of Anuj from Investec. Please go ahead. Yeah, hi. Thanks for the opportunity and congratulations on a good set of numbers, sir. So three questions. Firstly, on your new and reemerging business, especially TajSATS and Ginger, which has clocked in almost two years of growth but as a standalone entity. So what has been the growth driver and are they sustainable going ahead? Also, any new segment that TajSATS has scaled up its reach, which actually has led to such type of a robust growth? And what will be your outlook for this entity going ahead? Secondly, any impact of ongoing elections which we are witnessing across tier one, two, and three cities across ARR and occupancy? And lastly, we have already set our Ahvaan target a year ahead. So what margin portfolio addition or portfolio mix do we see or expect for next year, sir? Thank you. Hi, hi, hi. Giri here. So I think, see, as far as the first question on Ginger and TajSATS are concerned, I think there are a number of drivers. As far as Ginger is concerned, Ginger Mumbai Airport is obviously a big driver. The second thing is that we were upgrading properties from the old model to the new lean luxe model. That has clearly driven. And third, from an F&B perspective, we have kind of graduated from the earlier format into Qmin's, actually, which has also helped in terms of growth. I think these factors will continue to grow in our capital-light, fully fitted lease models on Ginger, actually. So Ginger, actually, we are very excited in terms of the opportunity to grow. That is number one. As far as Taj is concerned, once again, a number of drivers, very, very clearly, the growth in the number of airports, the growth in the airline passengers, the kind of mix which is happening, and the way we are charging our customers between, you know, meals as well as handling charges. So I think there are a number of factors once again. And productivity, most importantly, productivity. Places like Delhi, as an example, have been significant productivity improvements, which kind of ensure that they're able to do more meals given the same space, actually. And Taj will continue to have that momentum, completely actually. As far as this year is concerned, I think Puneet has outlined, in terms of the factors for this year. Very clearly, I think there may be some temporary impacts in terms of elections and all that, but otherwise, I think we do not see, given the long-term fundamentals, in terms of demand drivers, in terms of supply drivers, I think, we are clearly standing by the double-digit revenue growth that we have spoken about, actually. And I certainly think that, see, I think a lot of what has been happening is, you know, in the industry, is momentum of the strategy. I think, I think from our perspective, I think we have a solid strategy, a solid execution, and, and we have a number of factors coming into play, the diversification in terms of top line, the 125 city presence, which gives us a lot of network effect, as an example. The productivity in cost, the... You know, all of these are going to come together in terms of driving our performance, actually. I forgot the third question, but these are the two questions. Sir, it was on the Ahvaan target, which we have already surpassed a year ahead. So going ahead, you know, in terms of your portfolio mix, because the last call or we actually had targeted to have 55/35 kind of a ratio between asset light and asset heavy. We are already at 60/40. So going ahead, what would be our target in terms of this portfolio mix? And also any target on the or outlook on the margin pressure would be helpful. See, we, as far as the growth is concerned, see, we will continue to grow. I know there is a chart very clearly we are talking in terms of the Capital Light and Capital Heavy. I think including pipeline, if you see the Capital Heavy is 28%, actually, and, and Capital Light continues to be 72%. So that is going to be the driving force, unless some new opportunities like inorganic and other things come into play, or, or new greenfield kind of opportunities, actually. So that's the guidance. And as far as the margin is concerned, we have been very clear that the margin for us is an outcome rather than a target, actually. We had to give a target five years ago because we were at 17%, and therefore, it was important to give a target and deliver, actually. Having achieved the 33%, I think we should, it is more an outcome. If as a result of the action that we take with the leverage on the, what do you say, operating leverage, if the margins go up, there will be an outcome actually, rather than a target. So I think that's the way to kind of look at it, actually. Okay, thank you, sir. This year Gateway will again be on the asset light model? Yes. At the moment, the 15 that we have highlighted, they are all on asset light. Thank you, sir. That's helpful, and thanks for your time. Wish you good luck. Thank you. Thank you. The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead. Hi, congratulations, Puneet and team. My question is on, first on this IT spend. So if we have to really look at ROI or... So is it for creating more business or also including cost saving? So if you can give a little more color and how do we see its payback time? So, IT spend, as you see, what we've outlined here, there are two, three big areas. You know, basically, the ERP software, which is really the heart of the financial software. We are upgrading it to a much more, the most modern software, which is S/4HANA RISE, and we expect it to actually give us a lot of productivity gains once it is fully rolled out across our portfolio. And these could be things like implementing a shared service, you know, and getting cost savings as we scale up. Parallelly, we are also doing a PMS upgrade, which is basically moving onto a very modern, upgrading from the current PMS which we have onto an on-cloud PMS. Again, this will go hand in hand with the ERP upgrade. And I think the benefits of this you will see over the next two, three, four years, because this is not something which is, you'll see the benefit immediately, because it's a thing about productivity and saving, which will flow into the P&L over a period of time. And I think as an organization, you know, we've been leaders, and therefore, for us to maintain leadership, it is important that we are ahead of the curve and spend on IT and productivity investment, and that is why this, this has been called out this year particularly. One question for Puneet. Puneet, normally our Q2 is a very soft in history, but since last year, we have seen that Q2 is little better, I mean, over a YOY, or maybe much better, and decline is not to which was earlier. So how do we see the trend, I mean, a quarterly trend, and what is really playing out that all the quarter may come, I mean, maybe not equal, but a decline over, I mean, previous quarter changing in the seasonality? See, there are three, four things. Number one is India is now not anymore talking October to March destination. It's becoming a 12-month destination. Number two factor is that, companies, including us, we don't wait till October to start making money. We start thinking about profitability. You know, historically, 20 years ago, 25, 30 years ago, it was like this, that we'll wait till September, October, November. So that is changed completely. I think it's true for the entire sector. Number three change is new destinations are coming up. So, you know, there was not so much airports, roads, trains, infrastructure, you know, all the spending that is making all these destinations in India accessible. So it doesn't matter. You know, there are. If it is hot, you can go to the hills. If it is cold, you know, you can go to the south, you can go to Goa. So, you know, India is 7,500 kilometers of coastline. It has 500+ beaches. It has a mountain range which is massive. It has a, you know, it has a spiritual destinations with almost 3 million+ possibilities of people to go and visit on spirituality. So a lot of that is changing with the affluent India, which is getting the flavor of becoming the fifth largest economy, and if it is going to become third, so all these factors of taking short breaks, spending discretionary spend on leisure, will drive the change of hospitality from a discretionary sector to a consumer sector. That's what it is in very simple terms, and that is what is going to change your Q1, Q2. Q3 will remain strong with Diwali and all the wedding season, and Q4 also will always be the first and second strongest quarters. And events like IPL also help. I have to say that these events, India becoming a sports destination, whether you have World Cup Hockey happening for women or you have Kabaddi Championship or IPL or, you know, all these things are helping. And at the same time, the supply is not coming at that speed, at the way it came earlier. So of course, hotels will get built, but we have a few years definitely where the demand-supply imbalance is going to stay. So all in all, this is really what is helping us from a infrastructure point of view, but also our own growth. You know, we are adding so many hotels per month. Now, going forward, we are saying we will do more than two hotels a month. And if those two hotels are coming, majority is coming in Capital Light, it just keeps adding, you know- The flow through- The flow through becomes higher. Yeah. That's something we have been saying for now five, six years in a row. So effectively, does it mean that it will improve our RevPAR for annualized, on annualized basis from the whatever was the history? Normally, it should, but as I said, at the moment, there is nothing that suggests the contrary. Based on a Horwath HTL report, as I said in the opening remarks, the demand is supposed to grow at 10.6%, which historically grew at 6.4%. So I think that should help. Thank you, and all the best. Thank you. The next question is from the line of Karan Khanna from Ambit Capital. Please go ahead. Yeah, thanks for the opportunity. I've got three questions. Firstly, if I look at slide 17 of your presentation, and Puneet, if you could talk more about the supply narrative, because as going through an article and effectively, if you look at the top five international hotel chains and their growth aspirations for next 3-5 years, we are looking at close to 400-450 hotels that are getting added, effectively 50-60 thousand keys that are being added by these hotel chains. So in that context, how should we think of this narrative about supply remaining constrained over the next 3-5 years? I would recommend very strongly to get some of these announcements made for the last three, four, five years and then compare it to reality. It's, it's not. It has not yet happened. Like, we have had this question since 2018 in different hospitality forums that I participate in and in other calls. This is one of the ways of, you know, international way of marketing and getting the thing. Maybe it happens, but up till now it has not. It's very easy to go back and check. I think a few days ago there was an article in, I think, Mint, which gave the number of hotels in operation of the top players and the number of hotels in pipeline. I think that's what one has to do. And in the pipeline also, you have to keep adding, because 100% of the pipeline never gets built, no matter where in the world. So you have to look at, depending on the quality of the pipeline, a 70%-80% number is a very strong number, because something happens. Somewhere, some protests come, somewhere some, PIL comes, somewhere, you know, some, developer, promoter runs out of money or ends up in some other issues. So things happen in the marketplace or, a flooding happens or where a cyclone comes, you know, things just change. And, I would say this, this is what you've been reading is thanks to a recent investment conference that happened where- ... A lot of people came, and they made these statements because India is a happening place. Everybody wants to have a share of that growth and the possibility to participate in that growth so that nobody gets left behind. And it's good, it's good competition to get, but I think the number of hotels we have in pipeline, we are way ahead of anyone, and these are signed, legal, binding contracts that we announced. This pipeline is not projects which are under negotiation. We have another 90 under negotiation. So that is not what we count. If the number of projects you have in negotiation, if that's 10, then the ones you actually conclude, you're very lucky if you conclude 20-25%. The other thing, Karan, is that you should also look at the micro markets actually. Ultimately, hotels are a micro market business, and if you look at our hotels in our micro market, there's effectively no new supply coming in. I think that's number one. Number two, in all the key markets, we dominate in terms of the number of hotels as well as the price points, actually, and therefore, our ability to cater to different customer segments is also very high. So looking at supply alone as a standalone way of looking at it is not right. You have to integrate it with all the other factors, actually. Sure. This is also Giri. My second question, you know, given the significant surge in airfares, especially post-COVID, almost 40%-50% versus pre-COVID, how does one think about the ability for hospitality chains to continue driving ARR growth, given the ADR are also up 30%-40% versus pre-COVID? And as a follow-up, at what point do you think, you know, international destinations perhaps become more attractive or more lucrative in the context of rising airfare and hotel rates? I think if you look at our own portfolio, if you see the slide we put out by brand on ARRs and, you know, occupancy, you'll see that you have to look at the Taj business hotel. That segment is a INR 13,700 average ARR, you know, for Q4, and if you look at it for the full year, similar numbers. So I think that we believe that there's still room to grow, and ARRs is a function of demand supply at the end of the day. Like Giri said, not only supply across the country, but what's the supply in the upcoming micro market? And if you look at, you know, last four years or five years, ARR increase, a lot of it is also because there's been high inflation in the economy, which has also led to, you know, ARRs being that inflation being passed on to the customer. And that, that ability to pass on, inflationary increase is there till the time you have a good balance of demand supply. And I think that's something which we feel confident will remain in the foreseeable future. So I think if you think about it more conceptually, I think the ability to increase ARR is still there. And of course, it will vary from hotel to hotel. It is not going to be uniform across the market. It will vary from, also from segment to segment, and which, you know, whether it's leisure or whether it's, which brand we are talking about. So I think that's point one. Secondly, I think if you look at last year's data, there's been a surge of outbound travel from India, which has actually exceeded the pre-COVID level. In spite of that, we've had, you know, we've continued to sort of grow and see RevPAR go up over the last 12 months. So I think that just shows that while, you know, destinations outside India are attractive, for some people, there is still enough, demand in the country, and whether that's business demand or leisure demand, which is kind of, you know, catering to our, our hotels. And, you know, a couple of things which are hidden or which are potential upside is that we still are not back to our foreign, inbound tourists, right? We are still, I mean, the statistics is about 85% of what was pre-COVID, but that also includes the push we got from G20. If you were to adjust it for non, that is probably down to, you know, 75% of the pre-COVID levels. So there is, you know, and that should actually pick up. I think if you look at, again, various forecasts of that, they say still there should be pick up, and then, you know, over the next, few years, we expect that to actually get to, almost like a 27-28 million tourists coming to India. And that is a big push from... a big factor, which has helped us in sort of fill in some of our leisure properties. It's already doing well, but can obviously do better. So I think those are some of the other factors we should just think about, you know, as we, as we think about ARR growth. Because it's not, it's not about just one quarter or, you know, the full year, but I think also long-term trajectory. Just building on what, just building on what Ankur said. See, we have always said that from a business ARR perspective, there's enough scope, enough scope, because really speaking, if you travel abroad, you see for the same kind of rooms and kind of quality, I think our pricing is much lower. So I think with the growth in business, I think the potential to increase business term, business ARRs is definitely there. On the leisure side, you know, it represents the long-term opportunity in terms of growth. See, the domestic resilience, as Ankur pointed out, is very real, actually, which means that people are taking more trips, they're taking shorter trips, and many times when people take these holidays, they're not thinking of a destination. They have team build, and they want to go to some place, actually, whether driving to destinations or what. When you look at these 2- or 3-day trips, especially what happens is that people have a wallet in mind, saying that I will spend about INR 100,000 for this trip, as an example. Then it doesn't matter, Karan, in terms of whether the ARR is 10,000 or 12,000, actually, as long as the wallet is maintained, actually. Hence, I think, you know, I think... And remember one thing, you know, the ARR is really all about the part of the business. 47% of our business is room revenue. There's everything else in terms of F&B, in terms of all the satellite businesses, The Chambers and a whole bunch of other things, actually. And hence, I think, don't look at it narrowly in terms of just ARR and RevPAR, actually. I think there are multiple factors, and this is where I think the diversified network, the size of the network, is going to matter. If you are a two-hotel chain, then I think some of these factors, what you asked, are very real, actually. But when you have 125 cities operating with 200 hotels, actually, I think there's a whole bunch of network effects, actually. I think these are all one, one of those factors, but eventually there are a number of, what do you say, factors which complement and supplement, actually. Then you need to look at it much more holistically, actually. Sure. Then, Giri, lastly, if you think of, you know, your strategy to reintroduce the Gateway brand, do you reckon, given the, sort of, INR 20 thousand gross cash on the balance sheet and the kind of free cash flow that you're projected to generate, perhaps thinking about acquiring a hotel chain operating in tier two and tier three cities would have been a better strategy? Or you think that, building a brand or reimagining Gateway is the right way to go forward? I think we have just begun with 15 hotels, and Gateway, as we have announced. Organic opportunities is something that we'll always be looking at for the right price and value. This one thing does not exclude the other. Yes. So the evolution of our brandscape is ongoing, and, what was only known as Taj Group, see how it has evolved, and, we will continue to evaluate as and when opportunities arise. Now, we have launched Gateway, but I think you're saying it's acquiring tier two, tier three cities brand. There are not many. Mm. There are not many available for sale. So if there is one, then when it's on the market, then you can be sure that we will be a candidate which will go for it. Sure. Fair point. The other thing, Karan, is that, you know, I think with our size now, I think to some extent, we can start talking ourselves as a consumer business, actually. Which means that. And the reason I'm saying that, is that ultimately India is a heterogeneous country with different requirements. An Air India flight caters to a certain segment, a Gateway caters to a certain segment, which we are hitherto not able to service. And then I think what we're doing actually is expanding the pie, and that's the only way to look at it. And then we, we have a slide also in the presentation about, not just about the number of hotels, it's not just about serving different customers, but also different price points. That also matters. That also matters, because the beauty of the price point thing is that it is not margin dilutive. If you go to Ginger, well, ARRs may be lower, but it is margin accretive, actually. So I think, I think you need to look at all of these factors. I think, I think almost, it's almost becoming like a consumer business at this point in time. Sure. Very helpful. Thank you, and all the best. Thank you. We will take maybe one last question at the most, and if there is none, then we would like to close this call. Sure. The last question is from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah, thanks for the opportunity. Sir, between business and leisure, where do you see more scope of improvement in occupancy? I mean, if you see the structural trend, and we pointed out, the demand slide, that the long-term growth driver is there for both, but leisure should outstrip, business side, if you look at the—if you look at that slide, which basically, you know, kind of gives you a sort of a clue as to where the long-term demand is going to be from, from the various segments. I think if you look at our own hotels, you can see that there is, an occupancy for various cards. So there is room for improvement, I guess, in both, but leisure probably can do a little bit better in terms of occupancy in the long term. No, I agree. In fact, I think, I think if you look at leisure, I think if you go in the month of June, as an example, to a Lake Palace, earlier, a June month would be a low month, actually, but now domestic consumers are going. And many of these destinations are now becoming all round year destinations, actually. So leisure does... And also look at our mix of business. Today, 75% of our business is still in the business segment and 25% in leisure. Therefore, I would imagine that with the long-term opportunity and our presence in different leisure destinations, and we have the widest presence in the leisure destinations, actually, I think therefore, the opportunity in leisure structurally is much better. Right. And, sir, in the next 3-5 years, which of your hotels can become as big as the big five machines of slide 32? Slide 32. These are the big machines there. I think which additional hotels will come into this kind of a top 5 bucket? Many. Many. Yeah, exactly. So I think, we are opening many big machines. If you look at the development with Bangalore International Airport, which is not owned, it's a management contract, but we have a combo development of Vivanta and Ginger totaling 750 rooms. We are doing almost 300 rooms in Ekta Nagar, which is owned. We're doing a big one in Cochin Airport. Ginger. We are doing, just now signed and announced, the Ginger Mopa Airport in Goa, 300 rooms. So we are doing big boxes. We are very much looking forward to, as nobody asked this question today, so I will mention it as it's the last one, to the redevelopment of Sea Rock, which would be, at least two of these big boxes on slide 32 alone. So you know, these kind of boxes, they take time, and, that's why Sea Rock will take a bit of time, but it will happen. Maybe some of our existing hotels which are currently loss-making potentially have an opportunity to come into this, you know, big box. And, you know, basically, which are currently not on the slide, but could come on the slide, if we're able to turn around some of those hotels. Right. I mean, sir, just extending this, more—all of these are basically in large cities and owned by us? So except for Sea Rock, are we looking at adding any new large hotel owned by us at a city location in the Taj or, yeah, mainly in Taj? Yes, we are working on it. Maybe we have an answer in the next quarter or so. We are working on a very large opportunity in leisure segment, and actually not one, we are working on two. And let's see which one as a company owned, so where we have the land already for almost 30 years with us. There are some planning issues, just like the Sea Rock. We have two such large projects, and we have to just do the building, so it's not acquisition of land, and so it will be like a Ginger Mumbai Airport, where we had the land. So it's a part of our asset management initiative. So let's see where it gets to. We are putting in a lot of effort there, and hopefully at least one of those two, if not both, works out in the next quarter. Sure. That's it from my side. Thanks. Thank you. Thank you. Thank you. I'd like to thank everyone who joined the call today. Should you be, should we have more questions or other people who didn't have a chance, please feel free to reach out to Giridhar Sanjeevi, Ankur Dalwani, or myself, in the next days. We'll be happy to take any questions that you might have. Thank you for joining in, and, thank you for, listening and for all your support. Have a wonderful evening. Thank you. On behalf of The Indian Hotels Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.