Ladies and gentlemen, the conference of Lemon Tree Hotels Limited will begin shortly. Please stay connected. Thank you. Ladies and gentlemen, good day and welcome to the Lemon Tree Hotels Limited all-inclusive conference call. As a reminder, all participant lines will remain 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 the operator by pressing star, then zero on your touchstone telephone. Please note that this conference is being recorded. I would now like to hand the call over to Mr. Anup Pujari from CDR India for opening remarks. Thank you, and over to you. Thank you. Good afternoon, everyone, and thank you for joining us on Lemon Tree Hotels Q4 and FY25 all-inclusive conference call. We have with us Mr. Patanjali Keswani, Chairman and Managing Director; Mr. Kapil Sharma, Chief Financial Officer; Mr. Sanjay Rai, Chief Revenue Officer; Mr. Mayank Sharma, CFO, Fleur Hotels; Mr. Prashanth Malhotra, Chief Operating Officer, North & East; and Mr. Nikhil Sood, Vice President, Commercial Strategy 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 earnings presentation shared with you earlier. I would now request Mr. Keswani to make his opening remarks. Thank you, Anup. Good afternoon, everyone, and thank you for joining us on this call. I will be covering the business highlights and the financial performance for Q4 and for the full year FY25. Post which, we'll open the forum for your questions and suggestions. In Q4 this year, Lemon Tree recorded its highest-ever fourth-quarter revenue, as INR 379.4 crores. Our revenue grew 15% compared to Q4 last year, while net EBITDA grew 17% year-on-year to INR 205 crores, translating into a net EBITDA margin of 54%, which increased 109 basis points year-on-year. Q4 FY25 recorded a gross average growth rate of INR 7,042, which increased by 7% year-on-year. The occupancy for the quarter stood at 77.6%, which increased 557 basis points year-on-year. This translated into a RevPAR of INR 5,462, which increased 15% year-on-year. The total revenue for the year stood at INR 1,288 crores, which was an increase of 20% over FY 2024, and the EBITDA stood at INR 637 crores for the full year, which also increased by 20% over FY 2024. Fees from management and franchise contracts for third-party-owned hotels stood at INR 16 crores in Q4, an increase of 11% year-on-year. Fees from Fleur Hotels stood at INR 28.3 crores in Q4 2025, an increase of 19% year-on-year. Total management fees for Lemon Tree stood at INR 44.4 crores in Q4, an increase of 16% year-on-year, and INR 149 crores for the full year, an increase of 22% over FY 2024. The company's profit after tax stood at INR 108.1 crores in Q4 FY 2025, an increase of 29% year-on-year. Cash profit for the company stood at INR 143 crores in Q4, an increase of 22% year-on-year. Total cash profit generated by the company during 2025 FY25 was INR 382.4 crores, an increase of 20% over FY24. The debt of the company decreased by about INR 190 crores during the year, from INR 1,889 crores to INR 1,699 crores this year. Debt-to-EBITDA ratio in FY25 for the company stood at 2.67x, which is a 25% reduction over 3.57x in 2024. On the asset-light side, in Q4, we signed 15 new management and franchise contracts, adding 833 new rooms to our pipeline, and operationalized two hotels, adding 121 rooms to our operational portfolio. As of 31st March this year, the total inventory for the group stands at 212 hotels and 17,116 rooms, divided into 10,269 rooms and 111 hotels being operational, and the rest in pipeline. Going forward, we are confident in the company's ability to meet the objectives set forth in our five-year plan ending calendar year 2028. As of 31st March 2025, the current total inventory for Lemon Tree stands at 85% of the five-year target. In fact, we are also confident that we will add at least 3,000 rooms to our pipeline this financial year, taking the total inventory this year above the 20,000 number. That is three years in advance of calendar 2028. EBITDA margin for FY25 stood at 49.4%, which is 60 basis points less than the stable EBITDA margin of 50% highlighted in the five-year plan. Renovation expenses stood at 2.7% of revenue in FY25, an increase of 30 basis points over FY24. This increase in investment and renovation expenses will continue into this year and a much lesser amount in 2027, so that the entire portfolio of owned hotels has been fully renovated and refreshed, post which renovation expenses will close at 1.2%-1.3% of revenue on an ongoing basis, which will help stabilize EBITDA margin over 50%. We recently also relaunched our loyalty program, Infinity 2, along with technology upgrades to our website. With this, we should start seeing an uptick in the retail demand share, which stood at 45% in FY2025, to achieve the target of 66% by calendar 2028. With this, I will come to the end of my opening remarks and would ask you, Moderator, to open the forum for any questions you may have. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sameer from Macquarie. Please go ahead. Thank you. First question about Aurika, Mumbai. Can you talk about the development there? It seems like the ARR, at least the retail ARR for retail pricing, continues to stay below about INR 7,000, as you've seen in our spot checks. Where do we stand there? What gives you confidence that you'll be able to bring it back up to the INR 11,000-INR 12,000 range, and do we need to wait for a seasonally strong period of the year? If you can talk about, within the same context, what's the gating factor and a couple of other examples of maybe other brands that have succeeded in that kind of price range? Thank you. I'll come back for a follow-up. Okay. Sameer, let's start with retail pricing. Retail pricing varies from bottom to top by 250%. What do you see today? It's 6,000. In winter on a Tuesday, it will be 20,000. When we talk ARR, we do not talk ARR of a date. We talk about ARR for the year. Typically, retail ARR in high season, which is H2, is 1.2, maybe even 1.3 of H1, because in H1, you are driving occupancy. In H2, you're driving rate. If you do a retail spot check, six months from now, you will have a very different number, and then the possible question will be, "Why is your ARR so low and your retail rate so high?" What is the business? Our business is roughly 55% what is called negotiated business and 45% which is non-negotiated, or what we would broadly call retail, which is fundamentally business direct to customer or through an intermediary. The negotiated business is normally with an intermediary like a corporate and so on. How did we do? Aurika, as you know, is the largest inventory hotel in India. For the first year, year and a half, our focus has been to fill the hotel. Typically, once you fill the hotel and there is enough demand generated and awareness of the hotel, both in retail and in non-negotiated, you start repricing once you have the base of demand. Aurika was on that path. If I look at Aurika in Q4, it did over 80% occupancy versus 65-odd percent in the similar period last year. We effectively increased the occupancy. Actually, as an exact number, we increased it by 18.2% of inventory. For the full year, therefore, Aurika last year did 63% versus 53% in its first year of operation. Now we are at a point when we will start looking at price rise. You cannot really increase your price if you are doing subpar occupancy. I hope that answered the first question. We are pretty confident that Aurika's ARR will hit. I mean, if you look this winter, it will nearly certainly be over INR 11,000-INR 12,000, and then that becomes the run rate. What is it going forward? In Q4 alone, Aurika gave a return of, I think, an EBITDA of about INR 42 crores at about 67% EBITDA margin. Considering that we invested finally about INR 880 crore in that hotel, I think to say that it got nearly 5% return in one quarter, one year after, one and a half years after opening, I think is a very satisfactory outcome. Got it. Thank you. Second, if you can talk about the retail share that you've spoken about, what gets you from 45% to 65%? What all do you need to do along the way, apart from the program that you just spoke about, additional steps from here on to get it there? What sort of efficiencies? How does it reflect in your income statement if that were to happen? See, retail is a function of underlying demand of what you would fundamentally call individual travelers. When we look at a business, here is how at least Lemon Tree looks at business. We look at fundamentally trends to decide strategy. After that, what we are very focused on is basically the execution and the cost. We really are very focused on frugality. The trend line is quite clear. India is at a kind of an inflection point. I think the number of customers who will start using mid-market hotels, which typically starts at INR 3,600,000 per household, which was on the total base of 330 million-odd households in India, was a very small number, is poised for a big increase. Now, this big increase is based on a very small base. When that starts happening, as has happened in every other country in the world that is moving from lower income towards middle income, the consumption, the discretionary consumption of items becomes non-discretionary. Hotels is in the, I would say, the 70 percentile, which means after a bunch of other discretionary items like athletic wear, footwear, all these become non-discretionary, then hotels and travel come in. Retail naturally will pick up for all hotels in India in the next five to six years. That's a given. Now, we need to capture our fair share of it. That is why when I gave these opening comments of mine, I specifically spoke about the loyalty program, the relaunch of it, and the juicing of it. Let me give you an interesting number. Hilton has, with the largest hotel chain in the world, is Marriott. It has 210 million, last I saw, 210 million loyalty members and 2.1 million rooms. Here is a rule of thumb. For every room, they have 100 loyalty members. On average, loyalty members, I would say, should give them a few room nights a year. Here is the second proxy or second statistic. I think two-thirds of Marriott's demand comes from its loyalty program and mostly through its own website. Advantage is stickiness and higher price because they do not have to, they have no cost of sales through their own website. Take Lemon Tree. Lemon Tree has about 1.5 million members, and it has 11,000 rooms, but our rate of growth is obviously on a small base, much larger. Really, we think in another three years, we will be operating 20,000 rooms or maybe four years. We have 2 million members by, say, in the next few months, we will have also 100 members per room. We do not juice them the way we should. Firstly, our penetration is, our loyalty membership generates only 25-30% of the business, not 65% as in Hilton, as in Marriott. Number two, and I think this is even more important for us, they come more through OTAs than through our own website. The advantage of this loyalty program, Infinity 2, will be that we will be able to capture more through the cheaper direct channels using loyalty and an upgraded website. Let's combine it. We think there are going to be tailwinds. This is the inflection point. We think we are going to significantly improve our own offerings and the reward we offer to members. As a combination, I am reasonably sure that we will achieve this two-thirds target of our customers as retail in the next three or four years. Got it. Thank you. Thank you. The next question comes from the line of Archana Gude from IDBI Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Sir, maybe we'll explain that loyalty program thing. Maybe one small follow-up on that. Now, considering that Hilton and River Park Road to continue as it is in my business and the renovation cost behind us by FY2028, is it fair to assume that fully our EBITDA margin would be at least 200-300, which is higher than our current EBITDA margin for, let's say, FY2028? What would be our internal target, sir? Net of all expenses, net EBITDA, I do not think it will be 200. Our internal expectation is at least 55%. That becomes then from 50%, you are saying 55% by FY 2028? What I promised is 50% based on Mr. Narayana Murthy's principles, which is under promise, over deliver. Since you are asking, I think it will be closer to 55%. Sir, that's a pretty optimistic guidance, sir. Secondly, on this. Archana, our revenue grows now. You have to keep in mind last two years a very interesting number. I want to explain it actually generally as an industry number. Here is Lemon Tree that does 50%. Various chains do from 30-50% also. How does this 50% get realized? Let me explain. If we do, like last quarter, we did 54%. 23% was fixed. 23% was variable. One of the benefits of COVID was variabilization of plenty of fixed costs or at least making them semi-fixed or semi-variable. Now, for the last two years, our floats, so when we say our revenue grew 20%, it means 100 went to 120, and expenses grew 20%, which means 50 went to 60. That means when revenue grew $20, our expenses grew $10, whereas what I broadly said was that the variable component, which should have been half of that, it should have only grown by $5. Am I making sense to you? Yes, sir. Why did it grow by an additional 5? It was renovation, tech investments, which we are OPEXing. All this will become stable and not increase. It will effectively become a, once we make these investments, which we are showing as OPEX, but some of them are investments which can be actually, other than financially treated as a CAPEX, they will all disappear. The flow-through that you will, think of it this way. We spent, I think, about INR 100 crores couple last year in renovation, 9,500. We normally spent 25-30. We spent INR 100 crores last year. This year, we will spend INR 130 crores. What we are trying to do in order to not give shocks to people like you is we are trying to make sure the rate of growth of these extraordinary investments are such that they are equal to the rate of growth of revenue. EBITDA margins are maintained. This year, we will invest INR 130 crores in renovation, at the end of which we will drop from 2. In fact, this year it will be 3% of revenue, but then suddenly we will drop to 1.2. That 2% will come back as EBITDA margin. Similarly, tech investments are 1.4% of revenue, will become 0.2. Of course, there will be the natural growth or non-growth of our fixed costs because we were doing a catch-up post-COVID for the last two years where payroll went up significantly. Now going forward, these three main contributors to an increase in fixed and variable costs will all start trending to what I would call norm, which means EBITDA margin automatically will be up by over 3%. Thank you. I don't need a very high revenue hike. I mean, if we grow at 15%-20% a year, which we will, we will automatically trend to 54, 55. Sure, sir. In case we are given this debt to be debt-free next four years, should we consider this rent rate of INR 400 crores repayment every year? Maybe some guidance on CapEx, such as Aurika Shillong? No, it doesn't work like that. Firstly, Aurika Shillong is not a very large investment. The government has been very kind in the option. They have given us a subvention on interest rate of 5%. When we look at debt to equity of, say, 1:1, here we can get away with loan-to-value of 75%. That too, the interest cost will be at 3%-3.5%. There is a GST refund for 10 years. Effectively, what it means is our income will be 18% higher because of GST, and our interest will be 50% lower. We don't think we require much equity in this project as it happens, number one, because even the lease rent is very low. If I look at our repayment of debt, this year we generated, I mean, this year, I think we generated INR 350 crore-INR 380 crore of revenue. Okay. We invested in CapEx and this and that, maybe, I think about INR 100 crore-INR 120 crore. Then we repaid INR 200 crore, and there is a bit of cash on our books, about INR 60 crore of cash on our books. Okay. Next year, this will increase by another INR 120 crore-INR 150 crore. We will start then investing that money, I mean, repaying debt at a higher rate. The following year, when CapEx or renovation also drops by INR 100 crores, the repayment is not INR 400 crores a year. It will be, say, INR 300 crore this year, INR 400 crore next year. Yeah, exactly, increase. Right. Yeah. Sure, sir. I get it. Thank you and all the best, sir. Thank you. Thank you. The next question comes from the line of Samarth Agarwal from Abbott Capital. Please go ahead. Hi, sir. Am I audible? Yes, you are, Samarth. Sir, just following up on your point on renovation, what would be the current renovation status in terms of number of rooms completed and how many rooms do you expect to renovate in 2026 and 2027? Okay. So the renovation is on two bases, and it is at two extremes. We are renovating high-value, high-demand hotels like our Premiers, wherever we can reprice them significantly. That is one extreme end of renovation. The other is we are renovating all Keys hotels because they were in a very, very shabby state. Every year, if we spend INR 100 crore-INR 130 crore, you can assume we are renovating anything from 1,000 to 1,500 rooms. We are also renovating public areas. Our entire owned portfolio is 6,000 rooms, of which about 1,000 do not need renovation. They just need minor refurbishment. Another 1,500 need lower-level interventions because they are not in markets where we can reprice significantly, but we need to maintain brand standards. The balance will be renovated between INR 500,000-INR 1,000,000 a room. At present, I think we have renovated about 70% of the portfolio and the higher-value renovation. We'll do another 30% this year and knock it off. That will be done. Some of the renovation, which is the smaller refurbs and so on and so forth, will continue into the next year, but will be, in terms of investment, significantly smaller. The view was very simple. As a risk mitigation strategy, even when we take new debt, we try and fund it through old EBITDA. We do not take debt on an asset, assuming the asset will cover the debt. We want stable EBITDA to mitigate risk. Similarly, renovation investments are made that anything we invest should be in high-value, generating EBITDA and cash, which can then go into the other area, other hotels, which may not be generating that level of return. It's a front-end investment, so to speak. Understood. Thank you so much for that. Just a question on the recent geopolitical developments that we are seeing. What would be our indication to Northern India? Was that being affected? What would be the impact? Have you seen any impact in terms of any cancellations or any bookings getting deferred to a couple of months after from now? Yes, there was a significant impact in May due to COVID also. That Hawa came, that, of course, the media reported 1,000 cases from 20 cases suddenly went up 50x. It is quite scary hearing that. Of course, the war. Fortunately, we are not, while we have multiple hotels in the north and in Srinagar, these are managed hotels, so capital at risk or EBITDA at risk was very low for us. If I look at it, I think we did about 20% revenue growth in March, right? We grew about 20% in March. 21 in April. Or 22. 21 in April as well. Sorry, 21% in April. Sorry. Then in March, it crashed to, sorry, I'm so sorry. May, it crashed to 14%. We went this quarter, maybe in the mid to high teens. That is the effect. Our profit margins in this quarter will surprise Q4, Q1. Understood. Understood. Just looking at the managed rooms that we are adding, if I just go through the last four or five presentations, I think last year we were expecting to add around 1,700 keys under the managed model. If I just sum up the total number of openings over the last four quarters, it was around 680-700 keys. The total number of managed rooms increased just north of 400, I think, from 4,100 to 4,500 plus. Firstly, could we help reconcile this difference? What is preventing us from sticking to our expansion plans in terms of the managed rooms? I wish I am the owner of these hotels, obvious cause. See, it's not in my hands. What we do is we give you a best guess estimate. Let me tell you how I try to mitigate it because I used to be asked these questions ever since we listed and we started focusing on asset light. Who owns the hotels we are talking about, which we are going to manage? What is our intent and who owns this? This is not asset light growth is not to get some EBITDA. Everybody in India is announcing asset light. First is rate of growth of asset light does not equal to rate of growth of EBITDA. In fact, I am a little worried that these heavy announcements imply very fast growth, but the growth in EBITDA will be 10% of the announced months. You must understand that because most of the EBITDA remains with the owner. Only the managed income comes to us. Now, when you—so let me give you an example. If we hit 20,000 rooms and we open all of them in the next three years and 6,000 are owned, the other 14,000 will give me EBITDA equal to only 2-2.5 thousand owned rooms. Even at 70% managed portfolio, my own EBITDA will be 3x of the managed EBITDA. That is the first point, which I know you did not ask, but I want to just set expectations here. Number two, when we sign these contracts, you will notice the average size of the hotel is 60. These are not institutional owners. These are individuals, very high-net-worth individuals in different cities. It is our best—and since they build the hotels, we do not build the hotels for them. They tell us a date that we will open it by this date. Earlier, pre-COVID, I was reporting it that if they said we'll open it in March of this year, we used to say March we'll open these many rooms. We realized quickly that this was not working because they were not adhering to their timelines, and it was our credibility. We made it quarter. That did not work. We made it half year. That did not work. We report fully out. We are hoping that when they say they will deliver their hotel then, they actually do. There have been multiple delays, and each person who builds a hotel has his or her own cash flows, which they allocate to the project. Sometimes they put it in their main business. To ask me this question, what I can say is whatever we signed, assuming there is a 5%-10% drop-off because ultimately those hotels may actually not get built or get sold, they will all open. When they open is our best guess. Am I making sense to you, Samarth? We are just conveying what the owner tells us on an aggregate basis. We do not—actually, maybe we should not even announce when these hotels are opening. I know it makes it difficult to assess management fee growth, but that is the hard reality. Understood. Thank you so much. Just the last, I think, clarification. Were there some hotels that managed hotels that closed down during the quarter or the year? Yes. Because I think the number of rooms here. If you look at worldwide franchise, on an average, everybody talks net additions. In India, so far, we have not been talking net additions. We just announce what comes, we deduct what goes. Maybe we should, going forward, tell you what is net. The net we do is at the aggregate, not specifically defining what we added and what we removed. This happens for multiple reasons. The most common reason is a disagreement on quality. Let me leave it at that. Understood, sir. Thank you so much for this. Thank you. The next question comes from the line of Sumant Kumar from Motilal Oswal Financial Services Limited. Please go ahead. Yeah, hi, sir. This is regarding Keys Hotels. In this quarter also, we have seen the margin is under pressure. I guess the increase in your renovation cost. Okay. Can we expect, you are also talking about Q1 FY2026, we are going to have a better profitability. Can we expect FY2026 onwards, we can see an improvement in Keys Hotels performance? Firstly, hi, Sumant. Number two, about Keys. Keys is a work in progress. I would urge you not to look at Keys while the EBITDA margin grew from 38% to 40%. If you remember about a year ago or maybe more, you asked me a similar question on Keys. I said our current intent is to take it to about 40% EBITDA margins, which we did in Q4. The reality is in Keys, every single room and every public area needs renovation. It has not been touched. When we acquired it, it had not been touched for 10 years. It was in criminally bad shape. What I have said to you is that when it is fully renovated, and it will continue throughout this year also, what we are targeting is roughly 50%-60% crores, note of INR 60 crores million net EBITDA from this portfolio. I would therefore like to just give this guidance. That is in FY 2027, it will be north of INR 60 crore. In between, what we spend, what we shut down, we shut down 50-100 rooms in one hotel sometimes. Because if we feel there is slight, if there are cribs and so on, we just shut that hotel or shut half that hotel and renovate it. Okay. When we talk about the Q1, profitability is going to be better. We are talking in these things kind of RevPAR growth. The profitability improvement, why can we assume the ARR growth in Aurika is going to drive? No, Aurika, the ARR will not grow because in summer, again, as I said, as a policy, all hotels across India focus on occupancies because summer is much lower demand than winter. So ARR. I'm talking about OYO. I'm talking about OYO. I'm sorry, you're talking? YOY basis then, not on QOQ. ARR. Yeah, but Aurika, I do not recollect offhand what it did in Q1, but the occupancy will be much better in Q2. What I said is Aurika is stabilizing. One would like to see a summer occupancy north of 70-75% and a winter occupancy north of 85% to average 280. We are well on track there. Once that is stable, then yes, you will see some level of repricing. Remember, most repricing, Sumant, is a function of retail day-to-day dynamic repricing. That really does not work in summer. I do not know, unless it is very specific leisure destinations where demand in summer is very high and you can reprice in summer. For large business or multi-purpose hotels like in the metros like Aurika and so on, ARR hikes, I would not bank on. I would bank on occupancy hike, driving EBITDA. In winter, high occupancies and high ARRs, which would drive a much higher flow-through. Thank you, sir. We take the next question from the line of Vaibhav Muley from Yes Securities, please go ahead. Hi, sir. Congratulations on the fabulous set of numbers. My first question was on your expansion pipeline. Majority of our pipeline is now into Lemon Tree Hotels and Keys portfolio, while Lemon Tree Premier seems to have limited additions, especially post FY2026. Any particular reason for a lower addition in an upscale or upper mid-scale segment? Can we expect more additions going forward in Lemon Tree Premier and Aurika? Let me answer this in a kind of a slightly. Let me talk strategy for you, Vaibhav, for a minute. See, we are focused on getting to about 200 cities in India. Our view is that if we get into all the cities in India which have 500,000 population or more today or in the next three years, so some are growing in population, and those cities also have decent degrees of connectivity through highways, through Vande Bharat, through current or future airports, and are in states where the state GDP is rising faster than the national notional average of 10%. These are markets we prioritize to get into earlier and then ultimately into all these 200 cities. Unfortunately, in most of these tier two, maybe even tier three cities, the product is such that it does not have five-star hotels. It does not even have four-star hotels. They basically have decent three-star hotels. Okay. And in some cases, I would say they have hotels which are like two and a half to three and a half stars. When you look at our and the size of the inventory is also small. These are not 200-room hotels because the demand in that city is not so large yet. Most of our growth, and if you see our pipeline, did you report those three pages? If you look at it, they are in tier two, tier three cities. This is deliberate. It is strategic. We want to increase network. We want every Indian in every urban area to basically be aware of Lemon Tree literally, physically. We think that will ultimately drive growth. We have generally found whenever we put up a hotel in a new market, the demand from that market goes up by an exponential amount. Today, if I get two rooms from Bukhara across our network, if I put up a hotel in Bukhara, this is just illustrative and anecdotal, it will become 50 rooms a day. It feeds the entire network. To answer your question, if you see the hotels we signed in this pipeline last year, Q4, it's in places like Nimman in Madhya Pradesh, Garoth in Madhya Pradesh, Moga in Punjab, Chittorgarh, Pali in Maharashtra. Look at where they are, and those can't support Lemon Tree Premier, let alone an Aurika. They are small inventory. This is network strategy. I think when this gets done, we will see a surge in demand and in our loyalty membership, which will be pan-India. The way we look at it is very simple. 1%—top 1% of India is 23% of GDP. Bottom 45% is 15% of GDP. The middle 50% is 60% of GDP. We are focused on that middle. Understood. Regarding your Red Fox properties, there I am seeing limited expansion in Red Fox as well. Is it because the brand positioning of Red Fox is similar to that of Keys, Prima, or Keys Select? You are preferring maybe higher addition in Keys Select over Red Fox? Yes. So actually, that's a very correct question. See, when we set up Lemon Tree, there was Lemon Tree, then Lemon Tree Premier one up, Keys one down. Sorry, Red Fox one down. And Aurika came up because we wanted to expand share of wallet of customers who were migrating out. We acquired Keys, and suddenly Keys had an overlap of what's supposed to be positioned as an overlap with Lemon Tree. But the reality is the product was much, much inferior. And therefore, when we acquired Keys, we said we would have to actually review our entire portfolio of brands. So if you ask me to do some crystal gazing, Keys Prima Select, and Keys Select and Keys Lite will become the vehicles for franchise for really small hotels supported by tech and distribution from Lemon Tree. Lemon Tree and Lemon Tree Premier and Aurika will be the managed part of the brands, which will grow in future. Yes, we will have to look at all the Red Foxes once we finish this renovation and ask ourselves whether we should reposition them as, leave them as they are, or reposition them as Lemon Tree or an equivalent in the Keys portfolio. Understood, sir. Just last bit on the Fleur Hotels. Any update on the potential listing and asset recycling of stand-alone entry to owned rooms to Fleur books? See, this is all under informal discussions. I think what we will do is, I think by the next board meeting, we will try and come out with a very definite what we are going to do with the listing of Fleur and how Fleur will be the vehicle that does asset development. Assets, well, let's put it this way. Where to go, what to develop, how to finance it, and they will own all the assets. There will be a development asset-owning company with a large pipeline, which we have, by the way, already identified. And Lemon Tree will become more asset-light and will be a brand/technology/management platform. Right. Understood, sir. Thank you and all the best. Thank you. Thank you. We take the next question from the line of Ganesh Joshi from PL Capital. Please go ahead. Yeah. Thanks for the opportunity. Sir, I just have one bookkeeping question on debt reduction, which was at about INR 190 crore in this year. However, if I look at our stand-alone debt, the reduction is about INR 70-odd crore, whereas our stand-alone tax number is relatively flat on a year-on-year basis. Just wanted to understand how the apportionment of repayments happens between the stand-alone and the consolidated entity. Given the fact that Aurika resides in Fleeur and considerable cash flow generation will happen at the consolidated level, just wanted some clarity on this. Let me summarize this. Most of our old hotels are in Lemon Tree, then newer hotels are in Fleur. Therefore, old hotels which had ballooned repayment are, so suppose there is INR 300 crore-INR 350 crore of debt in Lemon Tree. I'm giving you very illustratively, it's around that number. We would be repaying INR 70 crore-INR 80 crore of that because the old hotels are typical debt is we take 15-year debt. First three years is a moratorium. Next four years is like 15% repayment of principal. Next four years is like 35%. And the last four years, that is year 11 onwards, is the last 50%. Are you with me so far? It is ballooned out. The reason we do this is one is we want a long tenure because these are capital-heavy projects. Number two is the asset inflation of a hotel after 11 years is significant enough to drive a much higher repayment by generating much higher free cash, assuming you are repricing at the rate of inflationary growth. So Lemon Tree has a much higher repayment. Fleur has a relative to capital deployed or loan taken much lower because those loans are all newer. Are you getting me? Yes. Yeah. So think of it this way. If we did nothing between Lemon Tree and Fleur, Lemon Tree would get debt-free much before Fleur would. Number one. Number two is that the I think Vaibhav or Sumant asked this, I think Vaibhav asked this question on the listing of Fleur. Once Fleur lists, basically we will have zero to very limited gross debt. In fact, one of the questions the board will ask is, what is an ideal debt-to-EBITDA ratio to carry forward to optimize return on equity? And that could be 2:1. We are already at 2.57. I think this is an inflection point for our company, both from tailwinds, which is structural change, from asset deployment, asset upgrade, technology upgrade, so on and so forth. The way the balance sheet looks will start looking substantially different and better year by year in the next two years. Sir, just to clarify this a bit better, I mean, I just wanted to know whether the cash flow generated from old hotels in Lemon Tree is that only used to repay the debt at the stand-alone level or whatever we generate at the console level is fungible and can be used to make payment at the stand-alone level. Absolutely not fungible. At Fleur, the shareholders of Lemon Tree only own 60%. Forty is with the Dutch pension fund. So there is no question of moving money from Lemon Tree to Fleur. Understood. Understood. Sir, secondly, on the Hyderabad market, I think the RevPAR growth in this quarter is at about 9%. Some of your peers in this market have done well. Any specific reason you would want to call out for a slightly lower RevPAR growth number? Also, if you can just clarify why the tax rate was a bit low this time around. Firstly, who is up here according to you? We have up here all five-star hotels. I think you are talking of different segments. It's like comparing the growth of economy pricing and business class pricing in a sector. First thing, please don't do that. Number two is you can use five-star hotels' performance as a general proxy. Now, the reality is that I think 20% of our inventory or 18% of our inventory in Hyderabad was shut for renovation. It is precisely what you are saying. It's a very high-demand market. We shut the inventory, so we were constrained in terms of supply. That is number one. Number two, if you look at on a total growth basis, we really shut a lot of inventory in Banjara Hills, which is our hotel in the city center, to renovate. As a result, the gross ARR in Q4 2025 dropped by about 10% or 8%. Revenue also dropped by 20% in that market because occupancy was down and rate was down because there was noise and renovation and so on. Similarly, Lemon Tree Premier Hyderabad, about 5% of the inventory was shut. When you look at it from that perspective, you're not comparing apples to apples. Overall, I'm actually not very dissatisfied with the growth in Hyderabad because while the occupancy hardly changed because of inventory shutdown, I'm quite pleased that as an average market, our ARR there was INR 7,700, which is 10% over our national average. Understood. Sir, and the tax rate part, if you can clarify. Lastly, if I can chip in just one last question because we are targeting to take our retail share to about 65%, a rough ballpark number, if you can share what is the pricing differential between, say, the negotiated business and the non-negotiated business? Even a rough indication would help. In good times, the non-negotiated business pricing is much, I'm just giving you a rule of thumb, it's much higher than negotiated. In bad times, negotiated and non-negotiated becomes the same. In summer, the non-negotiated, which is the retail pricing, becomes much lower. It is entirely, just think of it very simply, Ganesh, as the following. High-demand period, non-negotiated or retail pricing is like airline pricing. It can be very high, and in low demand, it can be very low. Contracted business or negotiated business is the same round the year. One actually offsets the other. Am I making sense to you? Yes. Yes. The ARR we report is a combination of the two. Understood. Sir, only on the tax rate part, if you can clarify, then I'm done. Thank you. Thank you. Yeah. On the tax rate, actually, you are right that this time the rate is coming lower, and that is primarily due to the deferred tax adjustment, that is, identification of the deferred tax assets. As we explained earlier also, due to conservative accounting, we deferred the recognition of assets till there is a taxable profit available. Now we have started recognizing, that's why the effective tax is coming lower. Thank you. Thank you, sir. All the best. I think in Q4 last year also, there was a lot of. Yes. There was one coming in. There was one coming in. Yeah. So it's an annual excel in Q4. Is that correct? Even last year, Ganesh, in Q4, the tax for the quarter was lower than the year average. Is that correct? Yes. Short, sir. Thank you. Thank you so much. Thank you. The next question comes from the line of Prashant Kothari from Stock Market Read. Please go ahead. Hello. Good afternoon, everyone. Am I audible? Yes, you're audible. Just wanted to ask about the IPO for Fleur Hotels. We are retaining a majority. We are intending to retain a majority even after post-listing, right, for Fleur. So right now, what are the plans to deploy the unlocked capital that we will be having from the listing? I'm not sure we'll have a majority or not, firstly. That is a function of board and discussion. We may de-consolidate to show a very high management fee income growth in that portfolio. Let me talk about see, there is a midpoint and two extremes of return in the hotel industry. If I do pure franchise, any income I earn is 99% flow-through. If I do management contract, income flow-through is 80-85%. Here, the deployment of capital is practically zero. This is one extreme. That is, say, one sigma. Franchise is two sigma. At the other end is, and there is zero risk other than reputational risk if you don't perform. At the other extreme is asset ownership, where the EBITDA is very chunky. Risk is 100%. Capital deployed is 100%. Risk is 100%. In a JV, like ours with APG, we own 60% of the company, but our effective economic share is 60%, which is ours, plus we take 15% of the revenue as between 10%-15% of the revenue as management fee. So effectively, our economic interest is 65%-70%. Am I making sense to you? Yes. As you go, suppose hypothetically, we owned only 20% of Fleur. Our economic interest would be we would get 30% of the EBITDA. Suppose the EBITDA was INR 100, and we took 20% of it as fees. Our economic interest would be 30% of the balance 80, which is 24, plus 20, which is our fees. Our economic interest is 44, but the investment is 50 or 30. The lower the ownership and skin in the game, and it should ideally be at least 25% in my opinion, but this is, as I said, subject to discussion. The much higher return on capital in equity we give to the shareholders of Lemon Tree. The other funny thing is that the multiple on management fee income is a higher multiple than on asset, if you look at the Indian market. It is literally double. If I take an asset which gives me INR 100 crore EBITDA and Fleur, and let me assume the multiple is, I'm just taking it illustratively, is 18. The valuation is INR 1,800 crore of enterprise. Suppose out of that 100, 20 is management fee. That is multiplied at 2x, and the balance is multiplied at, you see, so it's really, this is a global standard and average. Of course, it varies from country to country, but broadly, these are the rules. For the shareholders of Lemon Tree, we want to give very, very high growth in profit. We want the market to value it. We want high growth. We don't want asset heaviness. We just want skin in the game. The other advantage of that is that if we create Fleur as a growth vehicle, then every asset it adds, we will have a good shot to get it to manage. From every perspective, segregation of risk, segregation of return, it makes sense for us to list Fleur. That I understood. Whatever money we will be getting from the IPO, what Lemon Tree will be getting from the IPO, is there any plan for that, how that will be utilized? How would we utilize? It doesn't make sense for us to get money. It makes sense for us, A, to go debt-free. If you ask me, and this is not discussed with the board, I would expect Lemon Tree to become very asset-light, very high in profit, and a dividend-distributing company within the next year or two. It would need no capital. The only capital it would need would be perhaps in marketing spend and in technology investments and in distribution to very rapidly expand the network. Fleur would need capital for growth, for strategic growth, and for growing that portfolio, which would be, by the way, from a governance perspective, we are very clear. It will be completely firewalled from Lemon Tree. Okay. Second question. Infinity 2.4 and tech upgrades that were expected to boost the retail demand share from around 45% to 66% by CY 2028. What measurable changes have you seen in the customer acquisition or repeat bookings or direct channel since the relaunch? We had shut down our website or half shut it down for upgrades. In fact, it dropped, to be very specific. The loyalty program was also launched very recently. It went through multiple iterations. We wanted to be best in class. These are work in progress. I think the way to look at it is what happens by the end of this financial year will be the final platform for me to give you a definitive answer of how this is changing. The intent is very simple, Prashant. It is that we make it easy, two clicks preferably, it is super high in reward. It also offers multiple choices and the best possible rates to any customer in India. Okay. Understood. Just one more question. Beyond rooms revenues, are there any strategic priorities for expanding on the non-rooms revenue side, like banquets, F&B, co-working spaces, or branding experiences? If you look at global companies, I think one interesting thing, again, speaking as a proud Indian, is that there are finally companies in this country which can operate on a global scale. As India's economy grows and relative share of the economy increases in the global economy because we are growing at 3x of the global economy, we are going to see some wonderful changes in this country, both in terms of domestic consumption, private capital expenses, and in terms of our impact on the soft impact and economic impact in the rest of the world. Where should Lemon Tree be? Let me take you through the growth of normal large hotel companies. They all start with one brand like we did in one city like we did. If the brand does well, they start expanding that brand across a geography which is normally their home country. The brand does better, and their customers start traveling to other countries. They expand the brand to that country in order to follow the customer and offer them a brand they are familiar with and like. Over time, these brands go up and down. From, say, a three-star brand, which Marriott launched at, they went into four and five and two and one, but not one, but two. They start offering multiple price points to multiple customers who have now become familiar with their brand. First expansion is one brand, then all brands in their home country, then markets where their customers go, and ultimately, they become global players. There is an XY axis pricing, which is brands and geographies. Over time, they start following customers into what I would loosely call adjacencies: timeshare, holiday, resorts. They go into casinos. They go into cruise liners. They go into service departments and so on. Lemon Tree, I have no doubt, in due time, will follow a similar strategy. I think we need to juice our brand where it is still under-penetrated, and we want it to be dominant in its space. That is our focus. It is a singular focus. Adjacencies and monetizing it will come alongside. Okay. For now, I can say we are focusing on the hotel part only, not on the adjacent side. Yes. Okay. Last question about the international survey. The Dubai property, Marriott Forte International survey, right, there is limited communication there. Are there any concrete plans for further international expansion? Not strategic, but opportunistic and fundamentally asset-light. Wherever Indians go, I think I gave this example a year ago. I think 18 million foreign arrivals come to India, of which I think 7-8 million are Indians only, and the other 10-11 are foreigners. 26 million Indians go out. We expect that by 2030, it will become 100 million. We have a good loyalty program. We have captured a large share of these customers. They are familiar with our brands. We have a positive outcome to offer to owners of hotels outside India, where these Indians go. I have absolutely zero doubt that we will be in all these places in the next three to five years. Thank you. We take the next question from the line of Rohan John from Quantum AM C. Please go ahead. Yeah. Hi. Thanks for the opportunity. Just a couple of questions. On the Aurika Mumbai Hotel. Rohan, I do apologize to interrupt you. Could you please speak up? Thank you. Yes. Hello. Am I audible now? Yes, please. Yes. So yeah, firstly, on the Aurika Mumbai Hotel, how much of the business is currently coming from the cruise segment? The current business is I think about yeah, about 25%. I would say 25-27%. Yeah, the follow-up question on this is with the T1 renovation, which is going to be happening. Do you expect any impact on your occupancies in the next two to three years, maybe on your Aurika Mumbai portfolio and even the Lemon Tree Premier Hotel, given this renovation you're going to take over two to three years? No, firstly, Aurika is not undergoing renovation. It's a brand new hotel. No, no. I'm not talking about the T1, the terminal one, airport renovation. Oh, sorry. It is not visible because Aurika Mumbai is doing better than our portfolio in Q1. If I remember right, the portfolio is doing north of 70%. Aurika is closer to 80%. No, there is no impact. In fact, the outcome is positive. Generally, renovations, we are a little, by and large, the trade-off is we try and renovate at a time where demand is low. Given the fact that during renovation, rooms are shut for up to three months, we try and time it with where we think the displacement or the loss of the opportunity cost is low. If we shut 25% of, say, inventory, we expect the impact would be only on those days where demand is more than 75% or the balance inventory. We do displacement analysis. It is tech-driven. I think by and large, if you ask me for a flat number, it would not be a material number of loss of revenue, maybe INR 10 crore, INR 15 crore, maybe INR 20 crore, but not much. Yes, sir. Sorry. I think I wasn't clear with my question. The thing is that the T1, the terminal one, airport is going through renovation starting November. I was asking whether that will have any impact on your Aurika Mumbai or the Lemon Tree Premier app. I have no idea, but I can tell you when they shut, I think it happened in Delhi and demand didn't go down. Okay. Thank you. Thank you. We take the next question from the line of Prateek Kumar from Jefferies. Please go ahead. Your region-wide. Okay. I do apologize to interrupt you, Prateek, but your audio is not clear. Could you please use your handset to ask your questions? Yeah. Am I audible now? Yes, please go ahead. My first question is on your region-wide mix of operating inventory today and how does it look when it goes to 20,000 rooms? As far as asset heaviness goes, where we have 5,760 keys, we are opening a 90-key Aurika in Shimla and a 160-key Aurika in Shillong, which are two nice markets. These are resort markets. Our asset base is currently still about 6,000. Where are we going elsewhere? It is a mix of opportunistic and strategic. Opportunistic is wherever we get within these 200 cities, wherever we get opportunities, we just sign it and we add it to our network. As far as strategic goes, we have identified about 15 cities where we think we should be present because currently and going forward, because of connectivity, they are close to an airport. Either the airport is in the city or within a two-hour drive. Highways are coming up or have come up. When we can identify using multiple data sets, cities where there is a population, there is consumption, there is high demand of outbound travel, that is, people traveling from that city to the rest of India, we want a strategic presence there, which means we would look then at acquiring a hotel to manage or even lease because if we do that, then the benefit to the network is a very high one. Think of it this way that if we have a hotel in, I'm using this example loosely, in Ranchi, and we discover that there are about 1,000 people from Ranchi who visit the rest of India every year, and right now we are getting only five of them. With the presence, it will become 100. We would strategically go into that city as quickly as possible. When you look at this growth, I would say 90% or 95% of these 101 rooms we had is 113 rooms. As of today, there are another 12-13 rooms we have hotels we signed. If you look at our pipeline, which is a little larger than our operational hotels now in terms of number of hotels, I would say about seven or eight are in cities which we have hunted out, and the rest are all over the place, all the 200 cities we want to be in. Regarding recent announcements by some of the global companies that you would have seen, how do you see this having an impact on industry supply maybe a few years down the line? I think it's a good thing, personally. I'm not talking only from a Lemon Tree perspective. When a market gets more organized, pricing becomes rational. Customers get used to better quality. And then the high performers are the ones who are delivering that. Unfortunately, in India, 90% of the hotel rooms are not branded. In Europe, it's 30%. In America, it's 70% branded. This is a part of the natural evolution. I think what is unusual in India is such a large part of 15 or 1 lakh rooms is small hotels of 30-40 rooms, which are really subscale. It does not make sense to manage it. To just give you a number, if we charge, say, 10%-15% of the revenue of a hotel as fees, in our minds, 10% is for the brand and 5% is for management. If two-thirds of the fees are for franchise and these are very small hotels, why target that remaining one-third when the effective cost of delivering management is more than the revenue we earn from it? Going forward, all these international companies who are trying to announce or trying to get in or have announced growth in India, they are all equally foxed as to how to reach out to these small hotels. It will happen, I have no doubt. Somebody will crack it. I think we are also fairly strongly positioned to crack it using technology and our Keys brands. Those who do will be the big winners of the future because they will basically consolidate supply, which is unconsolidated, very fragmented, and very poor in quality. If they can manage to solve for that, it's a massive opportunity. Sir, thank you. These are my questions. Yeah. Thank you. We take the next question from the line of Vikram Shah from Vikram Securities. Please go ahead. The call co-holder is on hold. [Foreign language]. The person you are speaking with has Ladies and gentlemen, if you wish to ask a question, please press star and one. As there are no further questions, I will now hand the conference over to the management for their closing comments. Thank you. Thank you all 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 we look forward to interacting with you soon. Thank you. On behalf of Lemon Tree Hotels Limited, this conference, thank you for joining us, and you may now disconnect your line.