Ladies and gentlemen, good day, and welcome to the Lemon Tree Hotels Limited Earnings Conference Call. As a reminder, all participants 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you, and over to you, Mr. Poojari. Thank you. Good evening, everyone, and thank you for joining us on Lemon Tree Hotels Q4 and FY 2024 earnings conference call. We have with us Mr. Patanjali Keswani, Chairman and Managing Director, and Mr. Kapil Sharma, Chief Financial Officer of the company. We would like to begin the call with opening remarks from the management, following which we'll have the forum open for an interactive question and answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation that was shared with you earlier. I would now request Mr. Keswani to make his opening remarks. Good afternoon, everyone, and thank you for joining us on the call. I will be covering the business highlights and the financial performance for Q4 with FY 2024, and for the full year, after which we'll open the forum for your questions and suggestions. In Q4, Lemon Tree Hotels continued its growth momentum from the previous year. Q4 2024 has been the best ever Q4 performance in terms of ARR, revenue, EBITDA, EBT, and PAT. Q4 2024 recorded a gross ARR of INR 6,605, which increased by 13.4% year-on-year and 4.3% quarter-on-quarter. Occupancy for the quarter stood at 72%, which decreased by 163 basis points year-on-year and increased by 605 basis points quarter-on-quarter. This translated into a RevPAR of INR 4,754, which increased by 10.9% year-on-year and 13.9% quarter-on-quarter. Total revenue for the company in Q4 was INR 331.2 crore, which was higher by 30% year-on-year and 13.9% quarter-on-quarter. The total revenue for the full year was INR 1,076.7 crore for the company, which increased by 23% over FY 2023. The net EBITDA margin for the company in Q4 FY 2024 stood at 52.9%, which decreased by 278 basis points year-on-year and increased 415 basis points quarter-on-quarter. The decrease in EBITDA margin year-on-year was mainly owing to planned increase in renovation expenses above that spent in Q4 2023, as well as expansion of our business development team and overall payroll increases due to inflation. The Keys portfolio EBITDA margin percentage decreased by 16 percentage points year-on-year due to a big increase in renovation expenses over Q4 2023. The investment in renovation has allowed us to position the Keys brand to capture better pricing and demand. Please refer to slide 40 in the annexures, which showcases a case study on how renovation of the Keys Pimpri, Pune, which is the first Keys hotel to be more than 50% renovated, translated into an EBITDA ARR of 4,577, which was an increase of INR 800 over Q4 2023. The net EBITDA margin for the full year stood at 49.1%, which reduced by 278 basis points over FY 2023. Fees for management and franchise contracts from third-party owned hotels stood at INR 14.4 crores in Q4, up 34% from INR 10.7 crores in Q4 previous year. Total management fees for Lemon Tree in Q4 were up 84.8% year-on-year at INR 41.2 crores compared to INR 27.8 crores in Q4 2023. The total management fee for the full year stood at INR 134.3 crores, which is up 30% over FY 2023. Owned hotel level revenue for the quarter from the owned portfolio increased by 28% year-on-year, and network revenue for Lemon Tree, which is the total system revenue of owned, including Aurika Mumbai and third-party management franchise hotels, increased by 31% year-on-year. Total network revenue for the full year stood at INR 1,621 crores for FY 2024, as compared to INR 1,330 crores in FY 2023, which translates to an increase of 32%. The debt for the company increased by INR 143.3 crores, or about 8% from INR 174.57 crores in FY 2023, which was owing to borrowing against Aurika, Mumbai Sky City. The cash profit for the company increased 24% year-on-year from INR 237.1 crore in FY 2023 to INR 293.8 crore in FY 2024. During Q4, we signed 12 new management and franchise contracts, which will add 667 rooms to our pipeline and operationalize 4 hotels, which added 176 rooms to our portfolio. As of March 31, 2024, the inventory for the group stands at 104 hotels, operational with 9,863 rooms, and our pipeline comprises an additional 4,000 rooms. In fact, as of today, we are pleased to announce that our operational inventory has crossed 10,000 rooms. We expect our operational inventory to be about 120+ hotels, with over 11,000 rooms by end FY 2025. With this, I come to the end of my opening remarks and would ask moderator to open the forum for any questions you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants, I request you to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is? Some sort of a downtrading overall in the industry, where people are now pressing, perhaps, you know, from a luxury or upscale, going to a mid-scale, or, and how should we read FY 2025? What kind of expectations do you have on overall FY growth for the industry and for yourselves? That there is a base effect coming into play. So after COVID, in the first year, there was a fairly significant hike by nearly every player in the hotel industry in pricing. So this was exceptional because normally pricing hikes occur after demand improvements, but this was a counterintuitive call, which amazingly happened in a very fragmented market like ours, which is the hotel industry. So that led to, if you look back on FY 2023, there were large price hikes, us included, across the industry in India. So obviously, in FY 2024, while there was some improvement in pricing, it is higher base, and there is after all a limit to how much you can increase pricing, you know, on an ongoing basis. That is the first point. So my forward view is, now I think the whole industry will wait for the upcycle, which is imminent in my opinion, at which point you will see further significant hikes. Otherwise, typically, the hikes you will see will be in the... Depending on the market and depending on the quality of hotel, it will be anywhere from 5%-12%. So that is the kind of price hikes you will see going forward. Now, coming to Lemon Tree and down trading. See, I think what you have seen is early stages of a structural shift in demand by consumers in India as the GDP moves from this current place. So if you look at India's GDP today, it is like, well, I know today people don't like these comparisons, but it is the same as China in 2006 and Indonesia in 2007. So let me give you a very interesting example. There are six high-frequency indicators which demonstrated a real structural shift in discretionary consumption moving towards non-discretionary for very large cohorts of consumers there. Both these countries were at India's GDP per capita then, and had a very small base of what I would call wealthy, which is, say, households earning over, you know, $100,000 per household. If I remember right, India itself has, from the last study I read a few years ago, 3-4 years ago, India had only 1 million such households, which are real consumers of luxury. And then there were about 4 million, 3.5-4 million households, which earned more than INR 30 lakh, going up to INR 85 lakh. So this was the situation in India 3-4 years ago, and this was identical to what China had in 2006 and Indonesia in 2007. Now, what happened after that was 5 high-frequency indicators were first, that the number, the air traffic started taking off, and that you can see in India. In fact, I think some very encouraging signs are coming from the airport, airline industry, because they've ordered capacity, which is roughly 3x of their current capacity, which will be operationalized in the next five years. So that should tell you how we are looking at air travel demand in the next half decade. Number of airports. India has 150 airports. That should increase to 250, but the number of runways are going to double to 3x, to double from the current level. Four-lane highways have doubled in the last five years, and I expect it to double in the next five years. SUV demand has increased enormously in India, identical to what happened in China and Indonesia. When you look at these high-frequency indicators and the current income, GDP per capita, and then household income... We are at that cusp where we will start following those trend lines with China and Indonesia, which were roughly 22% CAGR growth in branded hotel rooms for six years. That was the boom in the hotel industry that these two countries saw at this point in the GDP with these kind of high frequency indicators. The first point is that the segment that took off first, because it had the lowest base, was luxury, and two years lag, then mid-market took off. I think we are seeing the same thing in India. You will notice luxury operators are showing a much higher growth in ARR than the mid-market, but this, to me, is a precursor to the mid-market. So to answer your point in a very, I guess, in a long way, I do think that there will be a big growth in mid-market, but that won't necessarily be at the cost of luxury, because both these consuming segments or cohorts of Indian customer are going to increase enormously in the next five years. Sure. Thanks, Patanjali, just as a follow-up to this, so is it safe to assume that, FY 2025, possibly because we've seen a fairly high growth in FY 2023 and FY 2024 ARRs, we could see some moderation in terms of the overall growth till FY 2026, 2027, as demand picks up, potentially rate growth cycle good further pick up in that period? Well, I would say that rate growth this year should not be less than last year. Okay. Okay. Despite the fact that in first quarter, I think we've seen some election and heat waves and all other aspects, and likewise, the second quarter itself used traditionally a soft quarter. We're confident about fairly robust rate growth in FY 2025 versus FY 2024 as well. Yes. I think, it's fairly safe to say that. Sure. My second question on the Aurika Mumbai, if you can talk more about how the ARRs, occupancies, and customer mix have trended for Aurika during fourth quarter, and what's your expectation for FY 25? So fourth quarter, we did, I think, about 66%. Yeah, we did about 66%. ARRs were above INR 9,000. This was because, as I said, we still have a large-- We had a large base of crew rooms, which we had taken opportunistically. Going forward, Aurika did well in April. I think May has been same as... Well, excluding Aurika, it has been same as last year in terms of occupancies and ARRs, because, it was a very, very soft month because of this extreme heat wave and this, what is called this, election. You know, this election also had a deflationary impact on demand for hotel rooms. But I see June is showing a significant pickup. So on a quarter basis, I think, Aurika will do as we expected. I don't want to give any specific guidance on it, but it is doing as well as we expected, and we are gradually taking out the crew base. So, you know, we replace it with the segments that we really want to target, which is corporate, retail, and meetings and incentives. Sure. As far as for the whole company goes, I think Q4 will. We certainly, at least, Q1 will certainly be much better than Q1 last year. Sure. And then the last question, Parthu, you know, given the success you've seen at Keys Select post-renovation in Pune, do you believe you can replicate the similar, sort of a success in the rest of your Keys portfolio? And what's your expectation for overall RevPAR growth for your Keys portfolio in FY 2025 and FY 2026? So FY 25 is still a work in progress because the only Keys hotel that went through... See, we did a bunch of renovation in Keys, but it is early stages because that's not visible in the sense that it is parts of the hotel. So I was very specific when I said that you can look at Keys Pimpri, because that is one hotel we have renovated a- Ladies and gentlemen, the line for the management has been disconnected. Kindly stay connected while we try to reconnect. Ladies and gentlemen, thank you for patiently holding. The line for the management has been reconnected. Over to you, sir... Sir, you may proceed, you're audible now. Okay. Yeah. Can you give us 10 seconds? No, phone is connected. Sure, sir. Battery high. Battery high. No phone is connected. Hello? Sir, you may proceed now. Hello? Yes, sir, please proceed. Yeah, actually, where were we actually? Keys good for you. Yeah, Keys. So my view is that, I just, I think we gave you an illustration of what happens when we renovate a hotel more than 50%. So Keys, Pune was renovated first. This year we are going to now start renovating all of them, and I think the full impact will be visible only from October the following year, but you will see early signs of it from this October, this coming October. What do I expect? Very simple. Our target EBITDA for Keys would be INR 60 crore a year minimum, and I think we will be getting there certainly by next October, and some signs of it will be visible from this October. Great. That's helpful. Thank you, Partho. I'll come back in the queue. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Hello? Mr. Kumar, I have unmuted your line. Kindly proceed. Mm-hmm. Mr. Achal Kumar? As the current participant was not answering, we'll move on to the next question, which is from the line of Chetan Sharma from Systematix Shares and Stocks Limited. Please go ahead. Hello? Hello. Please proceed. Am I audible? Yes. Yes, that you had mentioned that, on industry-wide in coming quarter, the price hike of 5%-10% can be seen. Okay. So my question is: What will be the focus area of Lemon Tree in terms of ARR and occupancy for FY 2025 and 2026? What will be the strategy for it? As we can see, ARR are growing on a single digit and double digit on YOY basis, but, occupancy is falling down. So what will be the, our focus area? Well, occupancy is not falling down. You are seeing the weighted average impact- Okay. -of Aurika, Mumbai, because that is obviously not at the levels of the rest of the company. So Aurika without Lemon Tree as a group may have done 72%, but it is three parts. There is Aurika, which did 66%, there is Keys, which did 56%, and then there is Lemon Tree, which without Keys and without Aurika, which did over 75%. And I certainly don't feel this occupancy will reduce. If you look at, I'm talking Q4, if you look at next year and so on, or this coming year. What I think will happen is that depending on micromarkets and each, you know, hotels across India, demand in each of those micromarkets. My view is that there will be different mixes of occupancy hikes and ARR hikes. What I can say is, for Lemon Tree, certainly, we will see at least a 15% increase in revenue every year for the next three years. And this will partly be led by ARR increase, partly by occupancy, and partly by management contract business increasing. So the minimum we expect is 15% increases. Okay, sir. Thank you. Thank you. The next question is from the line of Kunal Lakhan from CLSA. Please go ahead. Yeah, hi, good evening, sir. Am I audible? Good evening. Yeah. Yes. Yeah. Just, just want to understand, what will be the... What would have been the same store ARR growth, excluding, you know, Aurika? So, you are saying quarter-on-quarter or? YOY, YOY. YOY, if I look at Lemon Tree, without Keys, grew by north of 10%. Keys grew north of 5%, and the company as a whole grew by roughly INR 800 on 58, which is about 13, 14. Sorry, I could not catch the number. There's some network issue there, if you don't mind repeating it. ARR for, on a year-on-year basis, as a group, if you notice, went up from INR 5,800 roughly to INR 6,600. Correct. Now, if I take out Keys, then Lemon Tree with Aurika grew by over 10%. Okay. Keys grew by 5%, and therefore, that gives you an idea, without MIAL the ARR grew by 8%. Okay, so without meal, the ARR, but excluding Keys, yeah?...%. But what would be your assumption on this same store ARR growth for Lemon Tree? See, Kunal, this is, how do I say this? You are talking revenue management. So while I understand the higher the ARR growth, the more the operational leverage. But the fact is that I cannot give you an indicator of what will grow more. It is completely a function of how the market is behaving. I, what I said was that I would expect the revenue to grow 15%. This could be a 10% growth in ARR and a 5% growth in occupancy or the other way around. It is entirely a function of the market, and how it operates from H1 this year. Understood. Understood. My second question was on the debt side, and, I think this will be the peak debt levels. I think you, you had mentioned that in the- That's right. So debt reduction will start from this year, and there are two views. I have, as I said earlier, we are very confident that our debt will be zero within the next four years, which we make debt zero. But, should we get Fleur before that? Which is something we are thinking about, then obviously we will be debt free much earlier because Fleur has roughly 75% of the total debt of the company. And while it is consolidated, you know, we own 60% of that company. So we are looking at various options, and it is at the very least that we will go debt free in four years, but we could very well go debt free in the next financial condition. Any timeline on this restructure? No, it is, we are really discussing it. There is no specific timeline. Sure. Understood. Thank you so much, Patanjali, and all the best. Thank you, Kunal. Thank you. The next question is from the line of Jinesh Joshi from Prabhudas Lilladher Private Limited. Please go ahead. Yeah, thanks for the opportunity. Sir, I just need one clarification on the debt level. We have stated that the debt increased by about INR 140 crore, pertains to Aurika. But I believe this was the second quarter of operations, and the Capex would have already been incurred, and only after that the inauguration is possible. So if you can just clarify what led to this increase of INR 140 crore? Well, we don't pay everything up front. So there are, we have lines of credit from our contractors and so on. So in many cases, you see, expenditure in a pre-opening hotel, and while you may build the hotel over three years, four years, 60%-70% of your Capex really occurs in the last one year. Okay? And, more than half of that is in the last, between the last quarter. So we have what is called lines of credit. We have also guarantees, and so on. So some of, you know, we paid advance, paid advance payments, but the balance was made after the hotel was operationalized. So that's very common practice. Sure. So any balance which is pending as of now? No. Sure. And sir, secondly, if I look at your pipeline of managed room inventory over the next three years, I see a fall in the number of signings which we have given in the PPT. So are we facing any fresh challenges in new signing? Any comments on that? On the contrary, I don't... What you are referring to, there is no fall. If I look at, let me just tell you. If I look at this year in quarter four, we signed 667 rooms, and we opened 176 rooms. Quarter and quarter, the preceding quarter, we signed another nine hotels with 690 rooms and opened about 300 rooms and five hotels. If I look at year-over-year, previous year, quarter four, we signed nine hotels with 538 rooms and opened only one small hotel. So the trend line is positive. I don't think this is guidance when I say that we are very confident that we add 3,000 more rooms to our pipeline, this year. And our endeavor is very simple, which is that we open any... See, I can't give a clear line on how many hotels will open this year. I can say it will be between 1,200-2,000. Those are the rooms we should open this year, because there are delays which are outside our control. But if we open up to 2,000 rooms, what I can guarantee is that we will have signed more than 2,000 rooms. So what you will constantly see is more openings, more signings, and in each case, the signings will be more than the openings, so that we keep building the pipeline. Okay, sir. One last question from my side. I mean, if I look at our airline share, it is at about 13% in this quarter. And if I remember right, in the last earnings call, you had highlighted that roughly about 100 rooms will be reserved for the crew business. But if I look at the total airline share, it is up from about 8% to 13%. So is it that the crew business at Aurika has increased from the last quarter? ... Not particularly. See, we had about INR 200-INR 250 crore rooms in the second quarter, in the fourth quarter. That accounts, if I just take it over the base of say 6,000 rooms, it is about 4%, which is most of the high category in the airline. But going forward, we will, once we have built demand from the other segments, we will automatically reduce to that historic levels of 8%-10%. Because it's, it's a good business, it's a business that covers your weekends, which is traditionally very low demand. And, the bottom line, sorry? Yeah. So, that is, that is very specific to that quarter. But going forward, I think you will see airline demand at about, well, it will probably drop to 10% for all countries. Sure, sir. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Yeah, hi, thanks. Am I audible now? Yes, you are very audible, Achal. Yeah, perfect. Thank you. So, first of all, I just want to understand about the tables on slide 15, where you've shown the city-wise ARRs occupancy and by the way, and the brand-wise. I'm so sorry if you already discussed it, because my line was pretty bad. So first of all, on Aurika, what happened? I mean, why your ARRs are down 35%? And then, on the city side, if I see, I think there was sort of quite a sharp decline, particularly in Bangalore, occupancy rates. And otherwise, like Mumbai and Pune also, the ARRs were, sorry, Mumbai mainly, the ARR was flat. So what's happening in the different markets? I mean, if you could please highlight about your brand and the city-wise, please. Okay. First point, let me talk Aurika. What you are seeing in Aurika in this slide is for the full inventory of Aurika, which includes Aurika, Mumbai. So if I look at Aurika, Mumbai, which did about 65%-66% occupancy this year, and then I overlay it with Aurika Udaipur, the fact is that the occupancy from Q4 last year to Q4 this year has hardly fallen, if you notice that number. Now, Aurika Udaipur has a much higher average rate than Aurika, Mumbai, because Aurika, Mumbai is, say, INR 9,000, and Aurika Udaipur is, which is one-fourth its inventory or one-fifth its inventory, actually, has a much higher rate. So what you are seeing is a weighted average, average rate of INR 10,500, which really tells you that if you go by the ratio of one is to four, Aurika Udaipur did about INR 15,000-16,000, and Aurika, Mumbai did about INR 9,000, and the weighted average came to INR 10,500. Then you take the INR 10,500, multiply it by the occupancy, and that's your RevPAR. Does that make sense to you? Yeah. Yeah. Yeah, so this is a weighted average thing, because Aurika Mumbai is five times the inventory of Aurika Udaipur. Now, coming to city specifics. You are asking for Bangalore. Bangalore is still going through... You see, what we have a very large inventory in Bangalore in the IT-heavy markets, which is Electronic City and Whitefield. So that impact you are seeing still, which is a lot of our business used to be new joinees, you know, the mid-level managers and so on. And tech companies, as you must have read in the papers, and I'm sure you cover, you will see their hirings have slowed down significantly, and that is the impact you are seeing in our occupancy there. Right. As far as Mumbai goes, Yeah. Mumbai, our Lemon Tree Premier, in fact, did better this year than the previous year. But what you are seeing is the weighted average impact again, of Aurika Bombay, which is, you know, a new hotel and at 66%. So when you see that, keep in mind that Aurika Bombay is 2.2 times the inventory of Lemon Tree Premier Bombay, which is 300 rooms, which is why you're seeing a weighted average here, occupancy of 73% and ARR of about INR 9,000, which tells you that actually Lemon Tree Premier was close to INR 9,000 also. Right. Right. Okay. No, I get that. Thanks for the clarity. My next question is about the ARRs. I think recently, you know, I think market was a bit surprised in terms of the slowing down ARRs. Of course, we understand that I mean, there is a limit to which we can increase the prices. But I mean, if you talk about the bottom end of the category, like Keys and Red Fox, I guess if you look at the ARRs, I think pretty much INR 3,600, INR 3,000, or INR 4,500, which you reported. I mean... Given that, given the strong demand, given how the GDP is growing, how the per capita is growing, you know, and the preference for the travel leisure is growing, don't you think there is a significant, there's a significant potential, especially in the bottom category of the rooms? I mean, how do you see the potential increase in the ARR going forward, especially in the bottom category? Of course, I can understand Aurika is already INR 10,000, but they are also, again, it's a mixed impact. But otherwise, on the bottom side of this, don't you think there is a huge potential? How do you see the market? How do you see your potential for yourselves and the rate hike? So I actually feel that price sensitivity as you go down the pyramid is more and more. So the person who stays in a Keys is far, far more price sensitive than a person who stays in an LT, Lemon Tree Premier, and similarly, a person who stays in Aurika. See, if I look at Aurika Bombay, Aurika Bombay's ARR net of crew is about INR 11,500. It is the weighted average of the two that brings you to nine thousand, INR 9,100, whatever it is. But Aurika's ability to reprice is much higher, and so is Lemon Tree Premier than Keys. And overlay this with the fact that Keys is not a renovated product. You see, we bought it just a few months before COVID, and we are now renovating it. So, while I agree with you, there is enormous ability to reprice Keys, it is only when we renovate it, and it won't be at the rate at which we can reprice the higher categories. As far as our long-term view goes, here is what I have said earlier, that once Keys is renovated, its average rate will move to INR 4,500, which was what roughly Red Fox's rate is. So within the next two rate cycles, that is by October next year, you will see Keys becoming gradually moving up to INR 4,500. Red Fox, in my opinion, will move to north of INR 5,000, and Lemon Tree and Lemon Tree Premier and all, each of them will be north of INR 7,000. So that is roughly the trend lines that we see. These will not be dramatic price hikes every, you know, every quarter, but there will be two more price hikes, three more. One will be in October, one will be in January for different segments, and one will be in October the following year, at which point I'm reasonably sure that, if you look at, the slide 15, what, Keys by Lemon Tree will move towards Red Fox. Red Fox will move towards, Lemon Tree Hotels ARR, and Lemon Tree will move towards Premier, and Premier and Aurika will be, significantly north of what you see. Right. Right. I think that's quite an interesting point you just said. I mean, so but, but then that means you're talking about 15%-20% increase in the rates. But I mean, do you see that's the only juice left out in the system, and then that's the maximum potential? Or do you see that apart from that, there are some other opportunities for you to increase the rates or maybe the better traffic mix, you know. So I mean, how should we look at, you know, the maximum potential here from here on? Let me give you a number, Achal. Yeah. In 2006, 2007, 2008, and 2009, till the global financial crisis, the average rate of Lemon Tree, which did not have a Lemon Tree Premier, it only had Lemon Trees and Red Foxes, the ARR was INR 9,000. So actually, we are below what was there 15-18 years ago. And that is true, by the way, for every hotel company that had hotels there. So there is an ability to reprice. I am talking about, you know, pari passu, everything being equal, we will continue on this price line. But if the demand parameters change, then every number I have given you is too low. Okay. Okay, understood. Fair enough. Finally, my last question is about the competitive landscape. How do you see the competitive landscape for the whole industry and for Lemon Tree, basically? See, I think. Well, I do not see much competition, very frankly, because of a very basic reason, it is that demand is growing. So when demand grows, then, you know, everybody runs like horses. It doesn't matter what you were in your previous avatar, but everybody becomes a racehorse. So, I mean, obviously, there is competition in terms of, you know, similar hotels going after similar accounts and retail customers, but there is. I can sense the early tide of a rising wave of demand, and I think that's going to quite distinctly get demonstrated in the next 15 months, at which point, the question will be: How much can you reprice? Why have you not repriced more? And, so I don't know if I'm answering your question. I don't see competition as the issue. I just see this enormous opportunity of rising demand. Sure, sure. Perfect. Thank you so much. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. ... Yeah, I done. Is there any event scheduled to Q2 FY 25 due to general election in Q1 FY 25? So have you seen demand spill over from Q1 to Q2? What do you say, Avi? Have you seen any? I don't see any demand spilling over from Q1 to Q2. I think that there was a slowdown in demand in May, partly due to weather, partly due to elections, and that is galloping back actually in June. But Q2, which is—no, to answer your point, Q2 is traditionally weaker than Q1, but last year, too, and the previous year, too, Lemon Tree did better in Q2 than Q1, and I think that trend is very clear this year, too. Okay. So there is no indication of any event resulting from Q1 to Q2? No. No. Okay. Thank you so much. Thank you, Sumant. Thank you. The next question is from the line of Hardik Doshi from White Whale Partners. Please go ahead. Yeah, I just wanted to ask a bit more about the renovation cost. I don't know if I missed this, but can you break out, like, you know, how much was the renovation cost in the fourth quarter? And how much of it was to CapEx versus OpEx, and also what are you expecting for the first quarter and second quarter? So renovation is ongoing, so it is higher every quarter, frankly, than the preceding year same quarter. And it will be the numbers. But, bottom line is that this year, I have said this earlier, we will spend INR 100 crore on renovation, and next year, too. And at the end of it, by October 2025, the entire company will be new hotels. And, as a percentage of revenue, this year, quarter four, it was about 2%. And last year, quarter four, it was 0.6%. Okay. So it's about 1.4% impact on overall EBITDA. That is correct. Yeah, I'm using INR 100 crore for FY 2025 and then another INR 100 crore for FY 2026. Is that correct? More or less. A part of it will be CapEx. So, I think, what will be the OpEx? Normally, OpEx is about 70%. 60. 60, 65, that's it. Yeah. So the numbers you see as a percentage of company revenue are about 2/3 of the actual renovation spend. Wow. Because one-third is CapEx. So when I say INR 100 crore, it means that the hit to the EBITDA will be at, I think, maybe INR 65 crore. Okay, got it. And, you know, at INR 100 crore a year in FY 2025 and 2026, is that fairly even through the quarters, or is it like, you know, more first half phase? We average it out. Basically, we spend more in H1 than in H2. Okay. because, that's the low season, and we can shut more rooms off. The ratio is what, about 50/40 or 70/30? It depends, because, you know, the question is, how are you financially accounting for it? Is it equalized or is it an allocation? It's an allocation. It's an allocation, so assume it's equalized, though cash flow, it may be different. Okay, understood. Then just a follow-up on, you know, the Hyderabad and Bangalore markets. I think you mentioned a bit about the IT slowdown kind of impacting you. The impact has been pretty stark on Bangalore in particular, where, you know, your occupancy has fallen by, you know, almost 500 basis points, and then your EBITDA margin has fallen by 15%. So how much of that is related to renovations, and how much of it is just pure weak demand and- So we've shut 100 rooms of Keys in Whitefield for renovation. So of the total, Whitefield inventory, which is 350 rooms, operating was only about 250. So 58% is on the full inventory. So it is true that there was some opportunity cost to this, but I think it will be more than compensated by the average rate hikes we'll be able to get. Similarly, so that's the largest micro market where we, for us, in terms of rooms in Bangalore. Then we have another 325 rooms in Electronic City and Hosur, of which I think about 30, 40 rooms were shut, so about 10%. And that too is a very IT-dependent market. So you are seeing the impact of both. Not nothing to worry about because we have been given early indications that IT hiring should start in quarter three onwards. So I guess we are quite dependent on that. That's a very large segment for us. Quarter three onwards. I guess 1 quarter and 2 quarter, these kind of trends would continue in Bangalore at least before it, Yeah. And we are also quite clear that that's an opportunity for us in that adversity to renovate as many rooms as we can. Got it. What about Hyderabad? Is that a similar impact because of IT and- Yeah, we have shut, we have shut in Hyderabad, out of the 663 rooms, we have shut about 80-90 rooms. So, and that happened in summer, in winter, too, by the way. We are. It's ongoing renovation. Hyderabad is a very high-demand market, but we've taken a conscious call that we want the entire company to be completely new and renovated by October next year, which means that we will continue to renovate through winter and summer. So about 12%-15% of Hyderabad will be shut at any given time. ... Okay, understood. Last question from me is on Aurika Mumbai. I guess in a few quarters out, Fairmont's also gonna open up in the same region. I know it's, that is a bit more premium, but you know, how are you looking at that from an occupancy and ARR perspective? So let me give you an anecdotal information. When we built our hotel in Delhi, which is where I'm sitting, everybody told me at least, that, "Listen, 5,000 rooms are gonna come up in 3 years, and how is this market going to absorb this amount of inventory?" If I include the hotels that came up in Dwarka, in this micro market, 6,000 rooms opened over the space of 3.5 years, and all the supply was absorbed. Because the rate of growth of airline traffic more than matched the rate of growth of supply for the whole city. The same thing is happening in Bombay. Bombay is a larger demand market than Delhi. When I look at it from that perspective, why is an Aurika, why is the Lemon Tree Premier doing 90% occupancy in INR 9,000, even in a relatively subdued, you know, when all India occupancies are in the mid-sixties? It's because it's a very deep micro market, and I have some experience of Bombay. Whenever new supply has come, it has always gotten absorbed. So I'm not really bothered about the supply that is coming up, because I have this, I have this confidence that the city will be able to absorb that supply. Yeah, just a follow-up on that is, I guess, like, what is different from Delhi is, you know, the Bombay Airport already is running chock-a-block full, right? And if the traffic is going to be, at least from an airline perspective, is going to be from New Bombay when that opens up, that airport. So as more and more supply comes around, don't you think, you know, there could actually be a very different dynamic playing out versus what happened in Delhi? Not at all. In Delhi, that Jewar Airport in Greater Noida is coming up. And, if you look at, you see, you look at growth in capacity of each airport, I would not look at you know what is happening elsewhere. I would say simply, they are renovating another runway in the Bombay Airport. How much supply is growing? How many new aircraft are coming? And I would look at it from that perspective and just simply extrapolate and say, if they are saying capacity is going to increase 100%, but the number of rooms in Bombay is growing 25%-30%, then I think it's fairly safe to say there will continue to be demand. Because Bombay and Delhi airports attract every single segment. It's not segment specific. There is business travel, there's leisure travel, there's meetings, incentives, conferences. There are so many levers of demand. I mean, think of it, Reliance Jio, that center, it will have so many events of such a scale that forget, Bandra Kurla Complex, the whole of Andheri hotels will get full every time they have a big event. It's happened, I have seen it myself in Aerocity. Okay, got it. Thanks. I'll come back for more questions. Thank you. The next question is from the line of Sakshi from Sakshi Chhabra from Swan Investments. Please go ahead. Yeah. Hi, sir. So actually wanted to understand that on your key portfolio, because of the renovations, the EBITDA margin has gone down. But post-renovation, what sort of, you know, sustainable EBITDA margin can be maintained on a hotel level? Post-EBITDA or post-renovation, what will it do? Yes, I wanted to understand that. It will do INR 6 lakh a year per room. Okay. And, my second question was... Okay, no, I didn't have my second question. Thank you so much. Thank you. The next question is from the line of Ashok Kumar Daga, an individual investor. Please go ahead. Yes. You are able to listen me? Yes, I can hear you. Yes, sir. So my basic question is that when I'm going through your report, I have noticed that the promoter's holding is reducing from every quarter. In March 2023, your holding was 23.62. In June 2023, it was 23.60. In September, 23.28. In December, 23.21. In, again, March 2024, 22.87. So you are regularly- Write down my pledge. That is your? I want to write down my pledge. My pledge is zero now. So your pledge is zero, means your holding has been sold out? No, my pledge was to be written off, now, so obviously I'll sell some shares to, to pay off the debt. Okay. So now means, your holding has been reduced continuously. So is that trend going on, or now that will be stopped? More or less stopped. I cannot comment due to any emergency requirement, but it is more or less stopped. Because your holding has been reduced drastically. And the second thing is that, your, that sales figure, which when I have gone through your sales figure, in March 2021, the sales was INR 252 crore. In March 2022, INR 402 crore, so that is nearly double.... Again, in March 2023, INR 875 crore, but in March 2024, the sales, the sales figure was INR 1,071 crore. So near about some 20% or 25% increase is there. But the earlier three years, the sales was more or less, 100% increase. So then how we have- The reason is COVID. No, the reason is COVID, because the figures you are referring to, you know, when you look at 2021, I mean, you look at our sales pre-COVID. So if you look at pre-COVID, I think we did about INR 675 crores in the year pre-COVID. When COVID, obviously, there was hardly any sales. So then it started picking up on a new base. So I would urge you to look at, the figures of INR 675 crores pre-COVID and then INR 800 and, which, go to the slide. 8:25 in March 2023. That is right. So look at it, in your mind, just delete the two years of FY. Twenty-one, twenty-two. 21 and FY 2022. Yeah. Okay. So then after the March 2019, then March 2023 onwards, it will be just, sales some 20% or near about that growth will be there? No, I want to be very clear, Mr. Daga. I said that we will continue to grow at least 15% a year. And obviously, we would like to grow more than that, but 15 is a soft promise. The benchmark, minimum benchmark. That's correct. Okay. One more thing is there, that your operating profit percentage, although in amount terms it has been increased, but March 2023 to March 2024, March 2023 it was 51%, and March 2024 it was 49%, so it shows some decline in the percentage figure. Well, I think, as a company, I am told we are the first in the world to show over 50% net EBITDA, so I would not worry about 1% or 2%. I think the important thing is that, that part, most of the difference was on account of renovation, a big increase in renovation, and, that will pay rich dividends after two years. You see, what I have to look at is try and take advantage of, what I think will be structural shifts in demand two years out. And therefore, while there is some short-term pain in terms of, you know, potentially an INR 200 crore expenditure, of which INR 130 crore will be directly on the P&L. Looking forward, I think, our view has been very simple, that the total renovation expenditure that we are incurring, we should earn back in two years in incremental EBITDA. So I'm giving you a number, that if we have spent, you know, INR 250 crore in three years, then in the following two years, we expect to recover it in incremental EBITDA beyond what we would have otherwise achieved. Okay. So means whatever expenditure you have already incurred, so your view is that in the next two years you are going to recover that one, and then later on, the benefits will start continuously and your renovation work has been already, will be completed by that time? That is correct. Okay. Thank you. Thank you. Thank you. The next question is from the line of Hardik Doshi from White Whale Partners. Please go ahead. Yeah, just a quick follow-up on, in terms of, you know, you mentioned that 15 months out, if there is a significant demand cycle, then you could see, you know, much higher ARRs. But then what about from a supply side? Because every day in the paper we've been reading about like, you know, new inventory coming up, new plans by so many chains, and, you know, this... I know there's a lag that happens in terms of when supply comes through, post-announcement, but, you know, that will start catching up 15-18 months out as well, right? So let me answer this in three points. Point one, as you said yourself, supply takes time to operationalize. So when I sign, typically, there are three. When we sign management contracts, there are three types. One is a conversion, which means it's existing supply being rebranded. So it comes from some other brand to us as Lemon Tree. It is rebranded, so it's no increase in supply. And this happens typically within 6-9 months of signing. It becomes operational. Then there is brownfield, which means there is some kind of a structure up, but you have to finish it. That normally takes 18 months to 3 years, and it is new supply addition. Then there is greenfield, which means it's ground up, and that takes 3-5 years. So when we give our signings, we make take care to mention: this is a conversion, this is a brownfield, this is a greenfield. Now, what supply additions are happening in India, second point, is that a lot of it is in tier two, tier three, tier four cities, where, interestingly, we are only in 64 cities, and we want to go to 150 cities in India, where there is, there are going to be airports, if they are not already there, and where there is at least a population of half a million. And this is going to happen by us through an asset-light route, which means we'll go for management/franchise in these locations. Where we have capital invested is basically in the big cities, the five million-plus populations. So, if you go to slide 15, you will notice in our case... Go to slide 15. In our case, out of the 5,800 rooms we have, outside of the six big, I would say, metros, we have 25% of our supply, less than 30% of our supply, outside these cities, which is where more supply is coming up. So I wouldn't personally worry too much about that. I would say, how are these six cities where we have, you know, 80% of our capital deployed, how are they going to perform? And I'm quite sanguine about supply and demand growth in these markets. Okay, got it. All right, thanks so much. Thank you. Ladies and gentlemen, as there are no further questions, I would like to hand the conference over to the management for closing comments. Over to you, sir. Thank you once again for your interest and support. We'll continue to stay engaged. Please be in touch with our investor relations team for any further details or discussions, and I look forward to interacting with all of you soon. Thank you, members of the management. On behalf of Lemon Tree Hotels, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.