Ladies, and gentlemen, good day and welcome to the Indian Hotels Company Limited Earnings Conference Call for the Quarter-Ended 30th September 2024. On the call, we have with us Mr. Puneet Chhatwal, Managing Director and CEO IHCL, and Mr. Ankur Dalwani, EVP and CFO IHCL. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone 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, Mr. Chhatwal. Good evening, everyone, and thank you for joining our global conference call for Q2 FY 2025. We are pleased to inform you that we have continued our record performance for the 10th consecutive quarter on the back of continued growth momentum and key strategic initiatives which have been yielding results. I'll now outline the 10 key highlights of the quarter. Number one, hospitality sector continues to be in an up cycle. Driven by strong domestic demand, limited supply addition, and favorable demographics, the hospitality sector continues to be in an up cycle. In Q2, demand grew 7%, and supply growing only at 2% versus Q2 of last year. This trend is expected to sustain in the mid to long term with rise in disposable incomes, addition of new tourist destinations, and evolving traveler behaviors. Number two, robust performance in Q2 beats Q1 in seasonally weak quarter. Ladies and gentlemen, for the first time, our enterprise revenue has crossed INR 3,000 crores for the quarter and INR 6,000 crores for the first half of the year. On a consolidated basis, IHCL delivered record performance in Q2 with 28% revenue growth and 270 points margin expansion over the same period last year. Our consolidated revenue and EBITDA for the quarter, considering consolidation of TajSATS, stood at INR 1,890 crores and INR 565 crores respectively, with an expanded EBITDA margin of 29.9%. Our reported profit after tax stood at INR 555 crores, which was also bolstered by an exceptional accounting gain. I repeat, which was bolstered by an exceptional accounting gain of INR 307 crores on the consolidation of TajSATS. Excluding this exceptional item, our PAT still grew by 48% to INR 247 crores. IHCL's hotel segment showcased 16% revenue growth in Q2, taking the H1 revenue growth to 11%, which, ladies and gentlemen, is very much in line with our guidance for double-digit growth, which we also expect to accelerate further in the second half of the year, to which I'll come a little later towards this presentation. Our standalone performance in Q2 was also the best ever, with 19% growth in revenue to INR 1,125 crores and EBITDA margin expansion by 390 basis points to 38.6%. Standalone PAT grew 62% to INR 254 crores, taking PAT margin to 22.6%. Number three, double-digit revenue growth across all brands. All our hotel brands showcased double-digit revenue growth on like-for-like basis, with the iconic Taj brand delivering 13% revenue growth. Taj achieved double-digit growth in average room rates. I repeat, Taj achieved double-digit growth in average room rates, highlighting the strong demand witnessed in domestic luxury travel. This strong performance helped IHCL command a revenue premium of 66% over the industry in the Indian market, thus maintaining the premium positioning in each of the segments we operate in. Number four, on track for yet another record year of portfolio growth. In the period of April to October 2024, we have signed 42 hotels and opened 14 hotels. As guided earlier, we have accelerated our pace of growth, with our monthly run rate increasing to six hotels signed and two hotels opened till date in the current financial year. We achieved the milestone of 350 hotels portfolio, with more than 230 hotels operational, and continue to expand our market share of both operational and active supply inventory. Number five, one of our key pillars of growth, which is Capital Light growth that has been a key margin driver. On the back of our Capital Light growth strategy, our management fees in Q2 have touched INR 100 crores for the first time. This indicated an increase of 15% over the same period last year on the back of 11% net unit growth of managed hotel rooms. Management fee income has a high flow-through, thus helping enhance the overall margin profile. Number six, new businesses shine with 47% growth in Q2. Our new businesses vertical comprising Ginger, Qmin, amã Stays & Trails delivered a 47% growth in Q2 consolidated revenue. This year marks the achievement of a key milestone, with Ginger achieving 100 hotels portfolio with 70 hotels operational. Ginger's consolidated revenue grew 55% year-on-year to over INR 130 crores, while expanding EBITDA margin, EBITDA with the R in the end, margins to 42%. Qmin has now grown to 52 outlets, and in addition to being the F&B brand for Ginger Hotels, Qmin is now expanding to Westside stores in a shop-in-shop format and to airports in collaboration with TFS. Amã Stays & Trails continues to scale and has a portfolio of 227 bungalows today, with 116 in operations. Number seven, completion of the consolidation of TajSATS. In line with our strategy of simplifying the holding structure, TajSATS is fully consolidated in IHCL, just like a few years ago we consolidated Roots Corporation, which has the Ginger brand, and this has happened for over two months now in the Q2, in all three months and two months of Q2. TajSATS clocked a revenue of INR 254 crores, growing 19% over the previous year, with the EBITDA margin at an industry-leading 24%. TajSATS continues to lead the market with 59% share of meals served in the skies. Number eight, brandscape expansion continues as we have done in the past. We have relaunched our Gateway brand in a fresh new avatar. Gateway is our full-service hotel brand in the upscale segment, designed to be the gateway to each destination and equipped with quality accommodations and large banqueting facilities. Gateway will help us capture the immense growth opportunities in emerging CBDs in metro cities, as well as in tier two and tier three locations of India. The Gateway brand has a portfolio of 22 hotels today, and we expect to scale this brand to 100 hotels by 2030. IHCL has also entered into a contract with Claridges Hotels Private Limited to license the brands Claridges and Claridges Collection for India and Nepal. The Claridges has a strong luxury position with marquee presence in New Delhi. Starting 1st April 2025, IHCL will manage the Claridges New Delhi as a part of this arrangement. This gives IHCL an opportunity to grow in luxury space with a differentiated offering distinct from the Taj's. Further expanding our brandscape to boutique experiential stays, IHCL has entered into a shareholders' and a share purchase agreement to acquire 55% in Rajscape Hotels Private Limited for an investment of INR 18 crores, which owns the brand Tree of Life and currently operates 17 hotels with two in pipeline. Number nine, our key enablers. Our Tata Neu Loyalty Program now has almost seven million members, with loyalty-led contribution rising to 42% of our enterprise revenue. This number of loyalty members stood at 6.5 at the end of Q2, but is rising by leaps and bounds every day. The unwavering loyalty of our customers is visible in our increasing enterprise NPS scores, which stood at 74.9 for H1, up from 73 in the last financial year 2023-2024. We continue to stay focused on achieving our stated goals under Paathya. IHCL now uses 38% energy from renewable sources and recycles 45% of water. IHCL also partners and operates 37 skill centers today across 15 states in India, and this number is rising every month. Lastly, I come to our confidence of delivering double-digit revenue growth. Some of you were skeptical in last quarter and thought that we might change the double-digit growth guidance, but if you look at the numbers, you will see in the first half, which is the weaker half, we've already achieved 11% and hope to deliver on the double-digit promise on a much higher base going forward in Q3 and Q4. With 30% higher wedding dates and increase in foreign tourist arrivals expected in H2, we remain confident of comfortably delivering double-digit revenue growth, even excluding the positive impact of TajSATS. I repeat, by excluding TajSATS, we still will do definitely more than 10% top-line growth, whether it's 12% or 14% or 15%, that the second half month by month we can tell, but this is our belief and confidence, and this is further bolstered by the sustained momentum we have witnessed in October. Some of you will recall at the call or during the call for Q1, I had mentioned a robust July growth, which could be almost 20%, which was the case, and October figures we already have, which is behind us, and we have had a 16.5% hotel segment revenue growth. In summary, we expect to deliver strong revenue growth with sustained margins and continued portfolio growth, with a target to open 25 hotels in this financial year, going up to 30 in the next financial year, and a higher number in the years that follow with a pipeline of almost 120 hotels. Our focus also remains on scaling our new businesses, evolving our brandscape, and strengthening our competitive advantages with prudent capital allocation and strategic opportunities. Thank you so much for your attention. We now open the floor for questions. Thank you very much. We'll now begin with the question and answer session. Anyone wishes to ask a question may press star and one on the touch-tone telephone. 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. Participants, you may press star and one to ask a question. The first question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi team, congratulations on a very good set of numbers. Thank you, Binay. I just started this October, as we recall, last October. We are losing your audio. Can you speak through the handset, please? Yeah. Yeah. I think this should be much better. So as we look at this October, very good to hear that commentary, but as I recall, last October, we had the World Cup in the base. And in fact, even when we look at the wedding calendar, we understand it's more November and December heavy versus last year. So could you share a little bit about what is driving this October performance? So that is the first question. The second one is on other expenses. Anything to call out over there? We typically see them rise in Q2, but anything else to call off which is more specific to this Q2? And the third question is on pipeline. This time, again, we've seen that the pipeline has increased. So with that, any revision you would like to make in terms of your annual CapEx number? Anything on that? These three questions. Thanks. Yeah. Hi, Binay. This is Ankur Dalwani. So firstly, thanks for your comments. I think on Q2, you were on October, you were right. We did have a World Cup in the base. So to that extent, the performance is on top of that. If we actually did not have the World Cup event, and roughly that would have contributed about INR 10-odd crores to our previous year's number, INR 10 crore-INR 12 crore number. I don't have the exact number. So that would have added another, I would think, 1.5-odd% to the growth. I think the outlook for November, December continues to be strong, and with the points you mentioned about the wedding season coming up in November, and currently, the business on books also looks to be quite reasonably strong for us. Keep in mind, we are going this is sort of a big base we are sort of working off, but overall, I think the momentum in October should continue as we head into November and December. I think that was your question on outlook for this quarter. What was your question on other expenditure, Binay? If you could repeat that. So we saw other expenses rise in quarter two, which we have seen in the past also, but any one-off you would like to call out? Anything specific to Q2? No, I think if you're looking at, I mean, if you're looking at along with TajSATS consolidated numbers, that would have the impact of that coming in. But if you look at our segment report, which we give, if you look at the presentation slide number 26, you will see that as a percentage of revenue, this has actually come down from 27 odd% to 26%, and that is a scale which is at work. There's actually some saving on stores and supplies for TajSATS. So nothing extraordinary in this. This is in line with the business growth, and overall, the cost control and cost focus continues to be very strong at our end. And finally, I'd ask a question on the pipeline. We maintain that healthy balance of capitalizing on strategic opportunities where we can use capital, and otherwise, our focus remains on capital light growth, especially for our new businesses and younger brands. There is no change on that, but whatever other company-owned projects are there, we are funding it from our own internal cash generation. For example, next year, we will be opening two hotels in Ekta Nagar, Kevadia, which is one Vivanta, one Ginger, or the recently opened Ginger in Santac ruz, Mumbai. They're all from internal accruals. There is no debt, and we will continue to do that where it makes sense that it's a brand-enhancing opportunity. It comes at a compelling price or is with a very good partner, then we will do that and push, especially our new and reimagined businesses, forward so that they become significant contributors in the times to come. Right. Right. No, no, that is very helpful. Any number we should build for our investment for CapEx into FY 2025, looking at the pipeline? Binay, no change. It stays at 4%-5% of the revenue is typically capital expenditure. Whatever one-offs we have been doing, at some point, either we will keep them or we might do a sale and manage back or a sale and lease back and recirculate. So there are some one-offs which might increase the total CapEx to 7% if we don't sell, but if we sell, then it will create extraordinary gain or capital gain. So that all depends where the markets are, what kind of yields are expected, where the interest rates are. These are for us. There is no debt on these projects, so we are in a good position and not forced to take any kind of decision, which is not the most prudent one for the company. Yeah. For this quarter, we've said the CapEx is about INR 344 crores. This is actually for H1, right? INR 344 crores for H1, I think, and we're overall guided for something like INR 700 crores-INR 800 crores for the year. I think that is pretty much on track for this year, and I think longer term, when we do our Capital Market Day, we'll give you more color on that. Perfect. Great. Thanks, team, and best wishes for the coming quarter. Thank you. Next question is from the line of Shalini from UBS Group. Please go ahead. Yeah. Hi. Thanks for the opportunity, and congrats on a good set of numbers. So, Ankur, you just mentioned about October that there was roughly an impact of around INR 10 crore-INR 11 crore from, I think, World Cup. Is it possible to substantiate what would be the impact of G20? I think there's not much World Cup in 2Q. Yeah. G20 in Q2. I think it would not be. G20 was last year. No, sorry. So you're saying if you were to adjust it. Yes. So I think don't go back and adjust. I think it's a good base. Hotel industry is on an up cycle, as I said, and without G20, without World Cup, we are still showing a double-digit growth. Last year, the questions were, "Well, this year is G20, World Cup. What will you do next year?" Now, this year, the question is, "What if we remove it from the base?" I think important is the fundamentals of the demand and supply is in favor of the sector. The fundamentals of India becoming fifth largest economy is in favor of the sector. The fundamentals of India moving towards third largest economy is in favor of the sector. And finally, we are benefiting from strong domestic spend on leisure and on business with the FTA, which is the foreign tourist arrivals, yet to reach the pre-COVID level, and ideally, it's pre-COVID plus another 20% after so many years, would be the right level. So we have some way to go, and we remain fairly, not cautiously, but fairly optimistic that we are getting there on a month-by-month basis, and by the time we finish this year, we should get very close to the pre-COVID foreign tourist arrivals, and next year, that number will be overtaken and we'll be ahead, which will especially benefit our hotels in strategic or our strategic assets, especially our palace portfolio, which is experiential for foreign tourists and obviously for all the business events that come with it in the key metros. Just one point to add to what Puneet just said. I mean, if you look at the citywide statistics which we put out in the presentation, it will show you that New Delhi, for example, the RevPAR is grown only by 2%. That is where the base, the G20 base has actually had an impact, and I think that's where if we had kind of normalized that, this would have also been pretty healthy, close to double-digit, and from what we showed in Q2, which was a 16-odd% growth, this could have been a higher double-digit growth, essentially high teens rather than mid-teens. Got it, sir. Got it. Got it. So, also possible that 16.5% number which you have given for October, any sense what is the contribution from ARR increase here? ARR increase is the. If you get to 16%+ number, then your majority has to come from ARR because if you really look at occupancies, if your domestic occupancy is between 75%-80%, and in key metros like Mumbai, Delhi, where it exceeds 80, like Mumbai at 83, New Delhi at 84, as we have shared, and Chennai also beyond 80, then the majority of the increase will come through rate, and more than that, the occupancy is very difficult to achieve. Then that means at least close to double-digit, if not more, right? 110, 110 in June. We would like to say it's definitely slightly or marginally higher than double-digit. Okay. That's great. That's great. And obviously, there is a World Cup in the base. Now, and you said there are higher wedding seasons in November and December days in November, December month. So there is a possible acceleration from what you have seen in October, but my point is, how should we think about margin then? Then your margin expansion should be much stronger in the third quarter, given that it's largely driven by ARR. I would like to agree with you, but it makes me smile a bit. When you first did six and a half years ago, the first Capital Market Day, when we announced Aspiration 2022, and we said we will go to 25% margin, then there were a lot of skeptical people who thought 25%. Now, then we guided in Ahvaan 2025, then people said, "No, no, no, you should do more." And now we are going maybe beyond 33% mathematically. So I think there comes a feeling that these other brands, our businesses, we look at it in perpetuity for the next 25, 30, 50 years. And more important is that even if we have the margins, the ability to invest in our businesses, new businesses, so they become significant contributors is very important. But yes, we are looking at really industry-leading margins, not only on a domestic basis, but on a global basis today. Yeah. If you deliver a high teens growth driven by ARR, your margin will expand unless there is a big investment you're doing, right? So I mean, obviously, it's not so much that your ARR is double-digit and. I knew at some point you will answer it yourself, so why should I? I mean, the trend of operating leverage continues. I think that's something which we can see continuing. Understood. Understood. Great. Great, guys. Thank you so much. That's it from my side. Thank you so much. Appreciate it. Thank you, Shalini. Thank you. Thank you. Next question is from the line of Prateek Kumar from Jefferies India. Please go ahead. Yeah. Good evening, sir, and congrats for the excellent first question on management fees income, which has grown only 15% in first half year- on- year. Do you see this number going at much faster rate next year and year after because of much faster growth in rooms, maybe at 20%+ kind of number? Yeah, that is the first question. I think in a high-growth business, you should not only look at the percentage amount, but the absolute amount, because when you open so many hotels and they are in their initial startup phase, and you keep adding more and more in the startup, they are not all stabilized. So I think you have to look at the balance of the percentage growth with the absolute amount. What we used to do six years ago in a full year, now we are doing as a management fee income in a quarter. That's the way to look at it, and not just the percentage, but you can look at both. I'm not saying don't exclude one or only look at it from this point of view. From our point of view, it is that this management fee income has grown 4X, and it could grow further if there was at a faster rate, if there was some kind of inorganic opportunity that came up. And we had a bunch of hotels which come, not the ones which are just projected, which are already established in the market, and it's like a going concern, then the growth rate could be faster. But otherwise, if you keep adding new hotels which start at like 35%, 40%, 50% occupancy and at a lower rate and take three years to stabilize, then to get that percentage level higher is very difficult. Sure. Another question is on, say, some of the other results in other sectors, including consumer and distribution sectors. There's some undercurrent of some kind of slowdown in consumer spending which has been observed, which is clearly not appearing like the case in the case of hotels. So do you see any sort of sense of? I mean, it's clearly not seen in hotels. So why is it like there is a disconnect versus some of the other sectors like sort of supporting? Or is this really supply-demand mismatch which you talked about that is helping the hotel sector in terms of pricing? I think you said it yourself because at the end of the day, hotels is a real estate business. It's all about location and I think the fact that supply is lagging, demand is clearly evident from data you see Q1, Q2, even in a muted quarter as Q1, supply was far behind demand, so I think the ability to sort of pass on inflation and something beyond inflation exists in the sector, and that cycle is now not coming to an end in a hurry, so I think that trend is also holding up, so what you see in other consumer sectors is typically not necessarily which can be applicable to a hotel industry because it does have its own cycle, and the visibility of that remains quite good for the near term. If I may add to just what has been said, if ultimately, even if there is a slowdown, stronger brands are able to absorb it better. So we remain confident that firstly, we don't see any slowdown in our sector because of the demand-supply. But even if there should be one, all our brands are perceived as premium and from a very reliable and very old institution. So I think we would always have that competitive advantage over other brands. So our market share would help us get through those situations. And the last question on your Goa region trend, it is like sort of negative number for past two quarters. Is this related to high base again and tourists choosing foreign locations versus Goa in this case and leisure segment? No, we are investing in the low season in Goa. We have renovated Holiday Village to a great extent. We have done the same in Fort Aguada. So there is a lot of investment that has gone in because Goa was, if you remember, during the last phase of COVID and coming out of COVID, it was the first destination and was like a cash cow. It had a high usage, and it was time to back your winners. Goa has been a winner for us. Together with amã Stays, we have crossed 50 units in Goa, more than 16 hotels. The latest we opened today under IHCL SeleQtions. So I think all in all, we are very pleased with Goa, which has a RevPAR for us north of INR 11,000-INR 12,000 and maybe INR 14,000 for the year. So I think this is the good time period, and you will see when we announce Q3 results, you will see a different Goa number. Goa, as was pointed out, has a very high base. It came out of the recovery COVID first. So I think it's actually consolidating. It's good it is consolidating at this level, and we only see that it will kind of bounce back in Q3, Q4. Thank you, sir, and all the best. Thank you. Next question is from the line of Achal Kumar from HSBC. Please go ahead. Yeah. Hi. Thanks for taking my question, and congratulations on the great set of numbers. I have three questions, if I may, please. First of all, going back to the RevPAR number for the quarter, so just want to understand, and as Puneet mentioned, a very interesting point that you had a higher share at luxury hotels or high-end of the hotels. So is that a I mean, so do you see a bit of a switch in the consumer's behavior, like they are opting more for the higher end of the hotels, or do you see the allocation to the public in that category, that brand? And on the underlying basis, if you remove that impact of the better mix, on the underlying like-for-like basis, how should we look at the ARR growth? And in line with this, going forward, how do you see any squeeze in the ARR numbers between the quarters? So quarter- to- quarter, you have different variations, right? In one quarter, you have very high ARR when you have a lot of FTAs, foreign tourist arrivals, and all. But so now, do you see a bit of a, I mean, the lower variation between the quarters in ARR? So that is my first question. Secondly. I mean, so you just answered question by question because. Sure. Sure. Sure. So there is no squeeze. There will be a further increase in rates in all our brands, and you should not underestimate, as I said earlier to Prateek from Jefferies, the power of a brand. Today, Taj brand is a portfolio of more than 100 hotels, and it is in the key destinations outside of India as well as within India. And nobody covers like Taj does the Indian domestic front. And with all other tools that we have in place with the new loyalty program with Tata Neu to our world's strongest hotel brand, to India's strongest brand across sectors, our ability to charge is higher. Our ability to attract people is higher because we provide that circuit and network. So you not only provide the typical Delhi, Agra, Jaipur. You're also in Banaras, and you're also in Rishikesh, and you're also in different kinds of locations from Kurseong to Gangtok to we cover Taj in a very, very strong or Taj covers India in a very strong way in more than 50 spiritual destinations. So I think it's the strength of the brand, and we are still, although we have all these brands which have come up, the majority of a portfolio, or I would say 60%+, is still very Taj-centric. 40% would be the rest. So within that rest, Ginger is growing very rapidly. And so on both ends, on the top of the pyramid and at a mid-market level like Ginger, which we call the lean luxe, both is helping us to grow in a strong way, and that is helping us expand our rate. So if you look at Ginger, also had a growth of double-digit, which was not the case before, and it is going to grow faster than what you're seeing today. So Taj obviously leads with 13%, but every other brand, every brand that we have in our brandscape is showing a double-digit growth. Right. Sorry, Puneet. I think I was not very clear. What I'm trying to understand is that for IHCL itself, what I'm trying to understand is that if the ARR difference between the Q2 and Q3 was, say, 25% historically, is that 25% number squeezing? I mean, do you think or is that number maintained, right? I mean, now also we expect Q3 to be like 20% higher than Q2 or whatever. So I'm just trying to understand within the quarter for IHCL itself, do you see that the variation is narrowing? That's what I wanted to understand. Sorry, I was not clear. It's a very smart question. So you could have a point, but on the quarter-on-quarter basis, there is an increase. What has changed in the hotel landscape in the Indian subcontinent is that you also make money in Q1 and Q2. If you were to go back 10 years ago or 15 years ago, one waited for Q3 and Q4 to make money. But now I think everybody, every brand, every company from first April starts making money. So I think that change is definitely there. So if you were to do a mathematical thing, what you just now said, that is that gap narrowing between the performance of Q1, Q2 versus Q3, the answer is probably yes. But does that mean it is coming at the expense of Q3? The answer is no. Okay. Perfect. Got the answer. Thank you so much. My second question was about operational efficiencies. So you mentioned operational efficiencies. Just want to understand, of course, previously we used to look at employee per room and all. So now, I mean, just want to understand that how much operational efficiencies we still have in the system, or do you think you have already reached at the very optimal level and we should not expect significant efficiencies going forward? I mean, you've been talking about that you're not hiring the employees while hotels are increasing and you're having one manager for, say, two hotels or three hotels in the area, something like that. So now, if you could give a bit of a color on the operational efficiencies, that would be helpful, please. So firstly, I don't know who said this. We have not said we have one manager for three hotels. You have a general manager who may be looking after three as his own property, and there may be two GMs which report into cluster. And several cluster general managers could be reporting into an area director, and several area directors could be reporting into the head of operations. So that's one. Hiring had increased. It's gone very high as the business needed that. If the business comes back in certain markets where you are driving more than 80% occupancy, that's rooms only. And then we talk about all the wedding, conference, MICE, incentives, all this kind of business. Then in order to protect your brand, you have to provide the corresponding levels of service. And so I think more than hiring, what we have also been very focused on is spending a lot of money at all levels of the organization in learning and development, in the exposure of our people to best practices across the globe, higher education, training. So actually, we are spending more money, but because the revenues have increased so much, as a percentage, it's not showing. Again, the same thing. You have to look at the absolute numbers. So if you look at our presentation slide 26, you will see on each of the metrics, as a percentage of total revenue, it is showing less, but the absolute amount is always higher. So as the system has grown, there is one CFO, Ankur Dalwani, and there is still one CEO, myself. So whether we were for 150 hotels or for 350, that efficiency comes in for various levels and positions. But otherwise, the number of employees in the hotel level is obviously growing as the business is growing. Okay. Okay. It's only in the corporate overhead. Yeah. Sorry. Sorry. It's only in the corporate overhead and also in the hotels. As the revenue increases, the percentage decreases. But the absolute amount, if you see on slide 26, later or after this call, you can check, all the absolute amounts are on the up. This is a high operating leverage business as we know. So effectively, you do get the benefit of that. And the point being made on corporate overhead applies to some other parts of these cost structures also, particularly payroll costs and some parts of other expenditures. Right. That's not fair enough. My last question is about the Tree of Life. So basically, what I wanted to understand is that these guys made a loss in a year when everybody made money. It was such a strong year, and they still made losses. I mean, what is your thoughts on that? I mean, what they managed or how it is and how quickly you can turn it around? Thank you. So let me clarify. What you're seeing is actually the LRD funding, which is basically INR 1 crore negative of PAT. But this was taken over by Mr. Neotia. Neotia's company only last year. So it was towards November, December that he took it over. So effectively, the management and our being part of our network only came towards the beginning of this year. And now with the ownership also, which will come to us after the deal closes, I think this is a completely new sort of drive on this brand and in terms of expanding the portfolio of this segment. If you look at the EBITDA numbers, which we put out for last year, it's about INR 4 crore. And of course, once we sort of get into running the business, it can only go up from there. Of course, when we integrate it, Achal, we don't need all that structure that a standalone Tree of Life has, right? So we will have great opportunities for the people who have been running that business. They will get larger role responsibility. So as I said, you don't need a new Managing Director. You don't need a new CFO. You don't need so many others. The efficiencies of scale come in, and big opportunities come in for all the people who are there who become a part of a larger system. As a startup company, we don't go and announce job cuts. This is not our thing. And as a high-growth company, we have so many jobs available that we are very pleased to have this brand. We are very pleased to have this as a part of our brand scape. That somebody had put in so much effort building this brand single-handedly over a decade, that we have a lot of respect for it. That is how it caught our attention in how we can scale it to more than 100 properties by 2030, as these are small experiential boutique properties in all kinds of destinations which can provide that experiential stay. Perfect. Thank you so much. Thank you. Thank you. Next question is from the line of Karan Khanna from Ambit Capital Private Limited. Please go ahead. Thank you, Puneet, and congrats on a record Q2 performance. I have three questions. Yeah. Firstly, Puneet, if you can talk a bit more about your brand licensing arrangement with Claridges. As part of the arrangement, what sort of payouts do you expect for every property under this arrangement? And secondly, a bit more insights on the nature of agreement for managing their Delhi property. And do you also eventually see the Mussoorie and Haridwar properties falling under your management purview? And just commenting on licensing versus buying out these brands, how would the economics be different for you? It's very much in line with our philosophy or our aspiration, ambition of being the most iconic and most profitable company from South Asia. So most iconic means you should have the most iconic assets. And nothing gets more iconic than being in Lutyens' Delhi, which is the capital of India. And Claridges just one roundabout away, or Mans ingh being one roundabout away from Claridges, is as good as it gets from a location point of view. Then from a history point of view, it's a very well-established brand, very well-established hotel. And thankfully, the owners and us, we have a working relationship over 15, 20 years now. We are very successful with them with Taj in Dubai, the Vivanta that is getting upgraded to Taj in Surajkund. And now the Claridges, and some of you would remember, we bought them out and took over 100% of Sea Rock. It's a good existing partnership. Now comes number third is the management contract as of April 1 for Claridges, which is a normal arm's-length, simple terms for management that we have in other contracts also. We cannot, for confidentiality reasons, we cannot give away the terms in a call like this. When we grow the brand together, those kind of details will either be able to communicate in Capital Market Day or shortly thereafter because we need to take that to the next level. First level was to get the Claridges under management agreement and get the rights to it. Now that we have rights to it, we'll work together with the ownership group and create the entire framework on how we are going to grow and what will be each party's obligations. We will communicate that in the right time. But at the end of the day, the terms of the agreement we will not disclose. But all I can say is it is in line with any other professional managed agreement or a franchise agreement for the brand name that we would do. The new thing here is this is not a name that we own today or will own tomorrow. The name may be in long term, you never know. But as things stand today, the name will continue to be with the current ownership. That means the marks and the rights will be with them. And we will be in the asset-light growth model of getting a fee for running this business, and it will be complementary to Taj and not a little bit of Taj. That's not what we're going to do. Claridges by Taj or something like this, we don't do that. It will be Claridges. Great. Thanks for this, Puneet. Just to follow up, you spoke about Sea Rock briefly as well. So are you seeing any update here moving forward because it's been some time since you last spoke on redevelopment of Sea Rock? Rock, sorry, I couldn't get the, is there any update on Sea Rock? Yeah. Sea Rock, we are making very good progress since I last told you also. We will also give more guidance on that. But we remain fairly optimistic that over the next 100 days, we should make a lot of progress. Not a little bit of progress, a lot of progress that we can also communicate with all of you. Great to hear that. Secondly, if I talk about. There are things that are happening which are not under our control. There is the government. You need them. You need the political will. Many things are needed. We are in the code of conduct period. There's a lot of things. Once all that is over, we'll be able to communicate. Great. Secondly, if you talk about the corporate travel, this continues to remain at 12% this quarter as well. So how are you seeing this evolving? And as you must be in the negotiations with these corporates, what sort of a rate growth are you witnessing in these negotiations? It's different for different markets. I mean, it's not that you do one contract and it's applicable to all markets, all brands. There is an ability to charge in certain markets, and there is certain give and take that happens in other markets. So all in all, it's fair to assume, minus the corporate contracts, in general speaking, that expectation of a double-digit growth is a fair estimate, let's say, in the rolling 12 months going forward. Sure, and my last question for you, Puneet and Ankur, you have about INR 2,500 crores of net cash on the balance sheet, and you mentioned you will capitalize on strategic opportunities. Can you elaborate a bit more in terms of whether you'd be looking at, say, a chain of hotels or a strategic property at a marquee location if you were to do a greenfield acquisition, and whether you'll look at opportunities in India or abroad or both? So I think we've articulated this in the past. Essentially, the way we think about capital allocation is that, firstly, of course, the money will go back into asset management and CapEx of our own properties. And then there our own side, the greenfield assets, which are under construction. And the three sort of assets which will potentially get into a sort of construction phase, if I can say that they're right now under approval or development phase. This is the Kadamba Plateau in Goa, the Shiroda land parcel. There will also be made good progress in Maharashtra. And potentially, if Sea Rock also makes good progress, that could also see money being used up in the near term. Plus, that will still leave us with good enough cash to look at the equity opportunities on the M&A side. And I think on the M&A side, we will be constructive. For example, what we have just done on the Tree of Life, which is to add a brand and also sort of a white space in our brandscape, which is the experiential sort of hospitality experience that we didn't have. Like that, there are other white spaces out there which we could potentially look at bringing it under our fold. One thing we will probably not do is buy something just to add rooms to our portfolio. And of course, these have to be hotels that are managed by us and not by any other operator. So I think we are open to having discussions. And there are a lot of people who keep approaching us. Our development team is quite busy on that front. But also, the other thing we would like to just say is that our efforts are mostly concentrated on India and not really on overseas. Our strategy for overseas is more capital-light or asset-light approach, which will be a combination of management contracts or lease contracts, where a sliver of equity goes in and not really a large part of capital gets committed. So we continue to evaluate. And as and when there is something meaningful to update, we'll update you guys. But I think there's enough on the plate right now on our own projects which we want to chew and make it to the sort of next level in terms of actual progress on the ground. Great. Thank you, team, and all the best. Thank you. Thank you. Next question is from the line of Meet Jain, from Motilal as well. Please go ahead. Hi, sir. Thank you for talking to me. I wanted to ask regarding our international hotels. So how has been the performance this quarter? Last quarter, we saw some dip in the ARRs and other benefits. Can we say something like this quarter? So international hotels have done well. If you see the slide we put out in the deck, it shows that the red bars for international hotels have grown by 10%. And this is really on the back of very strong performance in The Pierre, which has done exceedingly well. And so that's a market which is a hotel which has actually performed very well for us. U.K. continues to do well in line with what it was doing earlier. So I think international assets is turning out to be a big positive for this quarter and for the first half. And I think that momentum is continuing in October as well. So we are hopeful that for the full year, we will do much better than last year. Thank you. And any update on the renovations? How much CapEx are we spending on renovations? What is the status on some of the hotels? So we've done about INR 350 crores of CapEx for the year, and out of which, I would think, let's say about two-thirds or let's say about INR 200+ crores would be on CapEx for renovating. So let's say that's typically how we end up spending about 60% of the CapEx goes on renovation. And that trend should continue, at least for this year. So in terms of operational rooms, how much operational rooms did we have in current quarter overall on a standalone basis? What is the question? Number of operational rooms this quarter? We can give you all that detail. I think that we can, if you follow with the IR team, Rupesh or Jain. Sure. Sure. Sure. Sure. I just wanted to clarify. You said you already did a CapEx of INR 350 crores. Another INR 200 crores is there for the pipeline. So overall, of 2025, we can assume a CapEx of around, let's say, INR 500 crores or? No, I said INR 350 crores is done. Out of which, INR 200 crores-INR 225 crores is towards renovation. For the full year, we had guided earlier a CapEx of roughly around INR 750 crores-INR 800 crores. I think we will pretty much be around that number, give and take INR 50 crores here and there, depending on the actual timing of money being spent and some of the money being spent on the newer projects, which are our own greenfield projects. Understood. Understood. Thank you very much. Thank you. Next question is from the line of Rahul Jain for PhillipCapital. Please go ahead. Good evening, sir. Just wanted to get a broad understanding on how the Ginger Santac ruz performance has fared and how do you see it performing in the next stage too? Ginger Santac ruz is performing in an outstanding fashion. We expect definitely north of 85% occupancy for the year and a rate that we have guided of INR 6,500 with a decent amount of food and beverage and also meeting room business. All in all, we are very pleased for the very first year of operation for it to do that. It is also a part of our presentation on slide 11 that already in the first half, it has done a revenue of INR 44 crores and an EBITDA margin of 55%. The first half, as we say, is the weaker half, so you can extrapolate what it could be for the year. Got it. And it. And sir, secondly, on a broader level, when we look at emerging markets, how do you see the demand and supply mismatch in emerging markets versus your key markets? And what sort of an opportunity is there in these markets for IHCL going forward? I think we gave the cut-off for tier one, tier two, tier three cities in one of our presentations, earlier presentations, which I think was in the April deck. But basically, a lot of the new supply is actually going to come outside the top 10 markets, and this is also going to create its own demand. Let me give you an example. Several cities have branded hotels or branded hotel chains do not exist, so there's only one hotel. But there is still hospitality service being consumed there in the sort of local hotel, which is unbranded or maybe a local brand which is well-known there. That is the shift which will happen when you have branded chains going to tier two, tier three cities. I think that growth actually is going to be much higher than the growth in, let's say, the metros or in terms of percentage. Although in terms of size, it will be smaller because these are very nascent markets. In terms of percentage, those will be probably double-digit kind of growth in terms of demand. Understood. That was all from my side. Congratulations on a good set of numbers. Thanks. Thank you. Thank you. Next question is from the line of Anuj Upadhyay from Investec. Please go ahead. Yeah. Hi. Thanks for the opportunity and congratulations on the set of numbers. So two questions. One is, what actually driven the 25% kind of an ARR hike at your Mumbai circle? We also saw that Ginger you especially mentioned the Santac ruz one performed significantly well, both in terms of margin as well as the ARR growth. So what actually is driving the growth in Mumbai area, especially in a lean period? Very good question. I think very important here is that one of the main drivers of all this growth is our flagship property. It's the Taj Mahal Palace and Tower. And possibly, it had that potential to grow because for whatever reason, it is now beginning to achieve what it should have always achieved. And this has really been a very strong first half for the Taj Mahal Palace and Tower. And the outlook is even stronger as we expect a lot of senior dignitaries to come and stay. Like recently, we even had the President of Spain. Similarly, many other dignitaries are booked for this quarter also. So I think the performance is really driven by Taj Mahal Palace and Tower, followed by Taj Lands End. The rate increase in Taj Mahal Palace and Tower or the RevPAR increase is almost 32%, of which the rate increase is more than 30%. Got it. And secondly, on the wedding season, so as you know, there's 30% more auspicious day in the second half compared to what we had in the last year. So any rough figure which you would like to contribute that wedding seasons could add in terms of incremental revenue for the second half of the year? Or generally a basic guideline on that each wedding contribution on the revenue. So basically, how much would that contribute, per se? No, I don't think each wedding we cannot look at it that micro-level approach, but weddings was, is, and remains a very important part of hospitality business for Asia in general and India in particular, and we see only more spend on weddings and not less, and we are very pleased as a sector, firstly, and then also as a company because we have all these iconic locations and maybe wonderful Instagrammable moments for any kind of wedding in any kind of setting over 125 locations that we have to offer in India, so we are very pleased with that, and each wedding increases the total revenue expectation. Okay. So fair to assume that majority of the wedding dates are largely being booked across our properties? We have our fair share of bookings. I would not say all weddings are booked with us only. We don't have so many halls. So let's put it this way that everybody is benefiting. And because we have more hotels, so we should benefit a bit more. That's helpful, sir. Thanks for this. Thank you. Thank you. Next question is from the line of Shalini from UBS Group. Please go ahead. Yeah. Thanks again for the opportunity. Just one question is a bit of a clarification on Achal's question, which is Q2- Q3. So your Q2 growth is like 16%, and very likely we do better in Q3. Then the step-up, which we typically see from Q2- Q3, shouldn't be materially different, right? Because your Q3 is also growing very strongly year- on- year. So I think we said in October, we did ARRs of slightly above double digit. This is obviously YOY. And I think, as you said, Q3 is typically stronger than Q2, and that trend will continue. I mean, you also should keep in mind that last year, Q3 was coming from a very smaller base. So to that extent, it may not be as high as last year, but it will definitely be an uptrend from Q2. Yeah, a substantial uptrend. I don't know because year-on-year growth are similar for both or higher effect for the Q2? So you said Q2 growth? That's right. Right. So yeah, that's part one. So I got dropped off for like two minutes in between. Did we talk about how the international has done in a month of October, et cetera? Any color on that? The U.S. specifically. The U.S. was very strong for us in New York. San Francisco remains challenging, so it's neutral, as good or as bad as last year. London is same level as last year. Cape Town continues to grow. Dubai is being strong. Maldives is soft and Sri Lanka is soft. But I think for us, it's very important is the positive shift, especially in New York, which has been a drain for a very long time. Right, so New York is strong. That's pretty critical for us. New York is strong. Got it. Great. I'm tempted to ask one philosophical question based on the answer you were giving to the previous participants, right? Given that Taj Mahal Palace is such an iconic, again, it's a philosophical question, right? So do you think that have you ever contemplated of charging substantially higher for Taj Mahal Palace, something like Ritz of Singapore or Claridges of London to that extent? I mean, has there ever been a debate over that kind of thought process? Again, a philosophical question. Not yet, but thank you for planting that idea. All right. Thank you so much. That's it from my side. It's definitely there. Okay. Thank you, guys. Thank you very much. Ladies and gentlemen, we'll take the last question from the line of Prateek Kumar from Jefferies India. Please go ahead. Yeah. Thanks for the opportunity again. I have just one follow-up question on new businesses. Talked about Ginger, ãma, Qmin. We talked about new scopes of business for Qmin, like opening airports, hotels with TFS. Can you just elaborate a bit whether the move out from Qmin-isation of Ginger to new initiatives? Also, the growth in overall new businesses at 47% this quarter seems very high. I would imagine there's given by across these segments. But is there general acceleration from that 25%-30% number that we used to talk about earlier to now this 40%+ number? So you're right that there has been acceleration from the previous number. And so two or three reasons because one is, of course, the new openings which have happened in Ginger, which is driving a lot of the growth here. The Ginger Mumbai Airport, we mentioned about that, contributing INR 44 crores in H1. And that was not there in the base to the extent they benefited. But I think in general, even on the same store growth, there is a double-digit RevPAR growth which we talked about as well for Ginger. So I think the momentum for Ginger continues to be strong. We've opened the maximum number of Gingers in H1. So we've seen that data as well. As far as Qmin's new initiatives go, those are I think right now we are just very early days. This is in a capital light model for us. We really don't want to take on the obligation of putting out fixed rentals, et cetera. So we're doing a revenue share model, which is where we've had one good success with Westside, and now we're expanding that partnership to other formats with Westside and outside of Westside with TFS. So I think that's something which we will probably be able to give you more color as this model matures over the next few quarters. But again, sort of the brand recall and the brand sort of affinity for Qmin is very strong. And that is also benefiting Ginger, and Ginger is also benefiting because of that. Thank you, sir. This was my only question and otherwise. Okay. Thank you very much. And I'll hand the conference. Thank you. Thank you all for joining this call. Thank you all for joining this call and for your questions. And thank you for your support. And we look forward to interacting with you. This time before the next quarter call during our Capital Market Day, and we will inform you and send you the invites by Monday next week. Thank you very much, and have a wonderful evening. Thank you. Thank you very much. Thank you very much. On behalf of the Indian Hotels Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.