Ladies and gentlemen, good day and welcome to Lemon Tree Hotels Limited Investor and Analyst Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Pujari from CDR India. Thank you, and over to you, Mr. Pujari. Thank you. Good evening, everyone, and thank you for joining us on Lemon Tree Hotels' Conference Call to discuss the announced composite scheme of arrangements. We have with us Mr. Patanjali Keswani, Executive Chairman, Mr. Kapil Sharma, Executive Director and CFO, Mr. Vikramjit Singh, Managing Director and CEO, and Mr. Saurabh Sarkar, CEO, Fleur Hotels. 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 presentation that was shared with you earlier. I would now request Mr. Keswani to make his opening remarks. Thank you. Good afternoon, everybody, and welcome to this conference call. Thank you for joining us, and I wish you all a belated Happy New Year. The purpose of this call is really to explain our rationale on the timing and logic for this composite scheme of arrangement, which has just been announced. To begin with, I would like to give some context, so please bear with me. As you know, the hospitality sector in India is currently at the start of a structural upcycle, which has been marked by sustained demand, healthy repricing, and a favorable long-term travel outlook. On the supply side, over the last two years, we have attempted to position ourselves to capitalize on this by commissioning the Aurika Mumbai, securing a marquee 500-plus room hotel, Aurika Hotel at Nehru Place in New Delhi, and signing about 7,000 rooms under third-party management contracts. Today, we operate about 130 hotels with approximately 11,700 rooms, with another 130 hotels and about 10,000 rooms in the pipeline. In addition, over these past two years, we have also undertaken other initiatives, including very significant investments in extensive renovations across our own portfolio, as well as digital and technology capability building. These will have an enormous impact on our pricing, revenue, and margins going forward. Alongside our network expansion, product improvement, and digital initiatives, we have also strengthened our organizational foundation by transitioning to independent professionally led management teams for both Lemon Tree Hotels and Fleur Hotels, including separate managing directors for the two entities. This structure will provide clarity on accountability and sharper strategic focus as both these entities scale going forward. Against this backdrop, the corporate scheme of arrangement represents a logical and value-creative next step. The proposed reorganization will result in two distinct, well-capitalized businesses: Lemon Tree Hotels as a pure-play asset-light company focused on offering hotel management, brand and loyalty distribution, and digital services. Fleur Hotels will operate as a large-scale growth-oriented hotel ownership/leasing platform with end-to-end in-house development capabilities and potentially a very large pipeline with a significant pool of available capital. Each entity will have its own management team, capital structure, and growth priorities while continuing to benefit from long-term operating arrangements and strategic alignment. Post the reorganization, in about 12 - 15 months, Lemon Tree will emerge as a debt-free, high-margin, high-ROCE company, generating strong free cash flows from fees and brand-related income. Fleur Hotels will consolidate ownership of our group's existing hotels, all of which will be fully renovated, including critical assets like airport hotels in Mumbai and Delhi, flagship resorts like Aurika Udaipur, and premium urban hotels in high-growth key Indian markets. Its growth will be driven by completing ongoing construction of three hotels with 750-plus rooms, acquiring much of the current 2,500-plus rooms, which are under active discussions, and pursuing other selective acquisitions/portfolio opportunities, which come up over time, as well as actively enhancing asset-level performance. From a shareholder perspective, the scheme is designed to unlock value while preserving continuity. Post the reorganization, Lemon Tree shareholders will effectively own close to 74% of Fleur Hotels, 33% directly, and about 41% indirectly through Lemon Tree. This is, of course, before any primary infusion by Warburg Pincus. This is versus the 59% which Lemon Tree directly owns in Fleur today. In addition, the primary capital commitment of about INR 960 crores by Warburg significantly strengthens Fleur's balance sheet and provides flexibility to pursue growth at scale. This structure allows each business to access capital aligned with its risk-return profile while remaining tax-efficient and operationally integrated. As Executive Chairman, I will continue to chair both companies with direct ownership in each. Our core values, including our commitment to being an employer of choice and fostering an inclusive, diverse culture, will remain central to how both platforms operate as we enter this next phase of accelerating growth. With this, I come to the end of my opening remarks and would ask the moderator to open the forum for any questions you may have. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Jinesh Joshi with Prabhudas Lilladher. Please go ahead. Yeah. Thanks for the opportunity. Sir, my first question is on the ownership structure of Lemon Tree in Fleur. Now, any specific reason to design the structure in a way whereby Lemon Tree continues to own an indirect stake in Fleur? I mean, was it not possible to design the structure whereby shareholders of Lemon Tree directly get shares in Fleur as a consideration for the transfer of rooms? So let me explain this in a slightly different way. Currently, there's obviously a case to be made that all 74% of Lemon Tree shareholding in Fleur should be distributed to all shareholders of Lemon Tree. When the board debated this, and so did, I think, Warburg, the conversation was along, how does Lemon Tree show its skill at skin in the game when it manages hotels for Fleur? So we felt it was prudent to have significant skin in the game at this stage, which means that going forward, it is very possible that Lemon Tree may dilute its stake or may increase its stake. I have no idea because this is obviously going to be a board decision. But the intent is to show skin in the game. And going forward, as Fleur keeps raising capital, Lemon Tree would naturally get progressively diluted. Understood. In fact, secondly, I think what we have also mentioned. Sorry. Sorry. I would like to explain one thing. Since you asked this question, there is an interesting, now look, this sounds a little bit like guidance, but let me give some idea of what dilution means when Fleur gets diluted. I mean, Lemon Tree gets diluted in Fleur. Let's assume Fleur raises, just as a number, 1,000 crores of capital after listing in some form, say, at QIP. If this 1,000 crores is deployed, it should typically lead on stability to an asset turn of about 30%-35% of the capital deployed, which means that 1,000 crore deployment of capital will lead to roughly 350 crores, this is through development, 350 crores of turnover, which means, based on our performance, about 170-180 crores of EBITDA, which means that Lemon Tree will also get fees of about 30 crores. So just to put it in perspective, 1,000 crore deployment with Fleur in development will lead to a 30-crore fee stream for Lemon Tree. Now, this is. You can put your multiples on it, but let me put it this way. This value alone, if it is deployed at scale, this kind of capital in a structural upcycle, which I think will continue for the next 10- 20 years, means enormous fee streams for Lemon Tree. So I'm just giving you some rationale on how we thought about this. Sir, the reason I asked this question is because an indirect stake warrants a physical discount, whereas a direct stake in Fleur does not. So I was just kind of intrigued as to why we kind of devised this structure. Yeah, so that was the reason. And secondly, I think the hotel assets that are going to be transferred to Fleur, all of these assets, basically what we have stated in the PPT is that new hotel operating agreements will be signed from 1st of April. So just wanted to check whether Lemon Tree will get a higher fee income from Fleur, given the fact that there is a transfer of development capability that happens from Lemon Tree to Fleur. If you can just clarify on that part. Okay. So the fees that we charge, rest assured, are completely transparent and completely in keeping with norms of other management companies of our size. So there is no, it is not that Lemon Tree, being now a 40% shareholder of Fleur, will take out a disproportionate share of money as fees because that would be very unfair to the shareholders of Fleur and long-term to the value that Fleur will unlock for the Fleur shareholders. So that is an assurance and a commitment by me as actually the chairman of Fleur. Number two, the transfer of assets and development capabilities have been, the valuation has been done by a credible third-party BDO. It is roughly along the lines of what we expected. It is obviously based on, I think, what was it, Kapil? Discounted cash flows, so on and so forth. So it was done as it would have been done even if this was two separate companies with no ties with each other. And I'm in this amusing situation where I'm chairman of both companies, and I was certainly very interested that it should be completely transparent and not open to any debate. And I think I can commit that it has been done from that perspective. Development capability was an issue which was raised. In order to maximize Fleur's growth, we didn't want shareholders of Fleur to ever feel that Lemon Tree, when it recommends any assets, was cherry-picking, which means Lemon Tree would say, "I've got this very nice asset in Delhi. Why should I offer it to Fleur? It has a very assured return." So we will develop it ourselves. So in order to have Chinese walls, we said development capability and exclusive right to develop hotels would be Fleur's mandate. And it made sense from even an earlier commitment we have been making that we want to transform ourselves into an asset-light, high-growth, high-ROCE business with a focus on brand management and digital. So I think from every perspective, we looked at all the pros and cons and tried to make it transparent, fair to both shareholders, with, as far as possible, zero conflict of interest. Yeah. Sure. One last question from my side. I mean, do we expect to renew the lease of 202 rooms that are not getting transferred to Fleur, or will it be that these rooms will no longer be a part of our portfolio once the lease expires? See, the deal was for, I think, a certain number of years. This was signed very early in Lemon Tree's life and these will, I think, the leases get over in the next five, six years, Kapil, so in which case, I cannot comment whether the owners will be okay to extend the lease, in which case they may ask for different terms, or whether it will simply morph into a management contract for Lemon Tree, or simply the owners take the assets back and run it themselves or give it to some other brand. Keeping in view this uncertainty, we decided not to transfer it. It was very difficult to value these two assets. Got it, sir. Thank you so much and all the best. Thank you. Thank you. Next question comes from the line of Abhay Khaitan with Axis Capital. Please go ahead. Yeah. Hi. Thank you for the opportunity. So my question is more on how will both Fleur and Lemon Tree look like after the transaction is completed? And, firstly, for Fleur, I know that you mentioned that there's INR 960 crore of capital that is committed from Warburg's side. So just wanted to understand how will this be expanded? And in future, will we see Fleur also going for other brands apart from Lemon Tree as well, or will it now continue to be an exclusive tie-up? And how will the future of Fleur look like after this is completed? So let's put it first is how did we look at this capital raise with Warburg? Warburg has made close to INR 1,000 crores available to Fleur. Obviously, this will be leading to some level of, how do I say, dilution for, say, Lemon Tree and Fleur. What we understand is Fleur itself will have a few hundred crores of cash available, maybe INR 300-350 crores of equity cash available in the next one and a half years, one and a quarter years to deploy. So obviously, our first choice is to deploy Fleur's free cash into acquisition/development. Warburg will also, I mean, Warburg's INR 1,000 crores is also available. So we will look at what makes best sense for Fleur in terms of how much capital we deploy internally and from Warburg, how much debt we take in order to grow this portfolio. If I look at all the negotiations and discussions we are having, and I think I mentioned it in my talk that we are in active conversations for 2,500 rooms, a lot of them are operating assets, and a lot of them are going to be future, that is, development assets. It depends on what fructifies now and what fructifies in the next 12 months. But this is the kind of capital we have available, which means if we go for a prudent 1:1 debt equity, we have potentially about INR 3,000 crores available to deploy in this growth before we list. And of course, after we list, then we have an ability to access public markets. How will Fleur operate? Our hope is that, speaking from the Lemon Tree operating company perspective, if we continue to develop, if we continue to generate very good ROCEs for the mid-market segment and for the upscale segment, then we see no reason why we should not continue to be the preferred operator of choice for Fleur. However, if there are assets available which have a different operator, and the operator is doing a good job, and the assets are available for a good price, and we feel that bringing it into Lemon Tree will improve its performance, then obviously, we will keep that operator. So it could be a multi-brand platform. We are not saying it is exclusively for Lemon Tree, but that depends on availability and opportunity. Got it. That is very useful. My second again, on the Lemon Tree side, now that given that it will be a pure, pure brand manager, what different would it do now compared to what it had been doing for the past few years? And in terms of, will we be looking more acceleration in terms of managed contracts, or will we be looking at expansion of number of brands that we have? So what is the sort of vision there once it transitions into a pure, pure brand company? So we currently have about nearly 12,000 rooms and 130 hotels. In the next three, four years, it will be, as of today, 260 hotels, about 22,000 rooms. We typically add 4,000, 5,000 rooms a year. And Fleur, I hope, will add 1,000 or 2,000 rooms a year, of which we will get a share. So we think if I did some crystal gazing, and this is not guidance, I'm making guesses. In the next three, four years, we would certainly like to be 30,000, 40,000 rooms, in fact, the largest operator in this space with very significant fee income. And in fact, internally in the board, the question then was, what do we do with this cash flow? Because we are going to be nearly 100% asset-light. And that would require, in fact, the board to define a dividend policy or a shareholder reward policy, which I have no doubt we will be coming out with in the next few months. And therefore, Lemon Tree will morph into a rewarding shareholders' company. And Fleur will continue to be an asset-heavy, asset-owning company with its own risk-reward profile. Got it. And in terms of brands, are we looking at expansion onto further brands, or are we? No. We don't want to confuse our customers. We feel Lemon Tree is very, very widely recognized. In fact, once upon a time, Nikhil, MakeMyTrip CEO, told me that the minute you open a hotel with a Lemon Tree brand, 20%, 25% of the occupancy comes from us straight away, and we would like to therefore continue building our brands rather than adding more and more brands. We feel we have more than enough brands. Got it. That's very useful. I will get back to that. Thank you. Next question comes from the line of Tejasvi Bhargava with ICICI Direct. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. So my first question is on debt. So now, on Fleur's balance sheet, there will be around INR 1,300 crores of debt. So as you said, that you are expecting 1:1 debt-to-equity ratio. So we should be compatible with debt remaining at this level, and there should not be any other significant increase unless there is any good acquisition potential for you. Is it the right understanding? No. So see, debt, here is my thought. The way we look at risk mitigation and management on the asset-heavy side of the business, so I'm talking now about Fleur, firstly, when this demerger happens, all the debt, including Lemon Tree's debt, after adjustment, is being transferred to Fleur. So Fleur will have 100% of our debt, and Lemon Tree will have zero debt. Okay? So what will Fleur's debt be on an ongoing basis by the end of next year, by the time of this demerger, would be what? About INR 1,300 crores? Around INR 1,300 crores. Okay. Including Lemon Tree's debt, which will be transferred. What will Fleur's EBITDA be after paying all fees and expenses? It would be $100 million next year. So what are we talking? We are talking that you have a INR 900 crore EBITDA and a INR 1,300 crore debt. So this is now the question for debate that if we are going to deploy another up to INR 1,300, INR 1,400 crores, maybe more of equity, then I think in order to maximize return for Fleur shareholders within acceptable risk levels, we should be able to borrow another INR 1,300 crores, which is what? Which means that with a INR 900 crore EBITDA, net EBITDA, and a debt of maybe INR 2,500 crores, we should be quite safe because this deployment of capital will lead to acquisition of some EBITDA because we will acquire hotels and some future EBITDA, which is the pipeline. So this is the mix and match we are looking at. I think our EBITDA levels, at least in our modeling, look so sustainable and large that I think it will be a little bit of a surprise to the market when you look at the net EBITDA of Fleur one year from now. Excellent. So is it fair to assume that 2,500 to 2,600 kind of a funds which you will be having that will suffice for the expansion of rooms? What you have given in the presentation, there are 756 rooms which you are adding on your books, plus the acquisition what you are planning to do in terms of properties you are looking at? So let's go back for a minute, Tejasvi. We have 750 rooms where Shimla will be ready this coming year, which is about 100 rooms. Another 160 rooms from Shillong will be ready the following year. These two hotels will 100% be ready in the next by the time this company lists. We will have effectively these 250 rooms definitely. Aurika, the Nehru Place, will take four years. Okay? It will require maximum cash in the last year. So we take care of it with free cash flow in, say, FY 2029 or FY 2030. Now we come to these 2,500 rooms we are talking about. Let's assume it costs 1 crore a room. Okay? That's 2,500 crores, which is roughly what I'm seeing. So it all depends what we acquire, which is operating EBITDA, where we can take debt, what we acquire as development assets where we look at cash required to build that asset out, and therefore, when do we take debt? So debt to EBITDA will be a moving number. But rest assured, it will be highly risk mitigated. My second question is on the portfolio mix. Under Fleur, will it be more towards Aurika and Lemon Tree as we are tapping to the premium and mid-premium kind of a segment, or it will be a mix of everything? It will be more Lemon Tree and Aurika. The asset-light side of our business, especially in the economy and lower middle segments, lower mid segments, will be driven by Keys or Red Fox. And so my last question is on the margin plans. So Fleur, we have seen that margins over the past two years have reduced mainly because of the fact that a lot of renovation has happened. Now we are at the end of that renovation phase, and from here, we should start seeing benefits of those renovations coming in. So should we expect Fleur to achieve EBITDA margins of around 44%- 45% over the next two years and with a scope of further improvement considering the fact that you are focusing on the premium end of the segment? Okay, so let me start first by actually adding to explain. These 2,500 rooms we are under active discussion. I think we'll make some very interesting announcements of a very large portion of this in the next three months. Would you agree, Kunal? Yeah. And Saurabh? Yeah. Okay. So that will be something interesting for the market to see, and it will be significant. Let me assure you. Now we come back to short-term pain and long-term gain. The Indian stock markets with you for a quarter performance without seeing the upside on the long term, so let me actually just put this on the table. In this year, besides everything you mentioned, what other hit Lemon Tree and Fleur? There were two regulatory interventions in GST and Code on Wages. GST meant that any hotel where we do not charge INR 7,500, we no longer were entitled to input tax credit. And that would hurt us fairly significantly. So we were starting to focus on taking more and more rooms at a price above INR 7,500, obviously subject to market accepting it. Code on Wages will hit us one-off quite significantly. I think it will be close to INR 16-20 crores this quarter. Is that correct? Then if I put everything together, what you said and what I'm seeing, which is what are the one-offs? The one-offs are the massive full-scale renovations we have undertaken last year, this year, and next year. The impact of Code on Wages one time and the impact on an ongoing basis going forward, the expenditure of about INR 20 crores that we have paid this year, which is OPEX, the technology and digital investments which we are making, the one-time property tax that we were asked to pay at Delhi Airport suddenly, which is close to INR 8-10 crores. If you put all this together, the incremental impact on our EBITDA margins will be 5% of revenue for FY 26 and FY 27. And then it will revert to norm by FY 28. So let me explain this. All these costs, excluding the one-offs, put together should be 3%-4% of revenue, but this year it will be 9% of revenue. So obviously, the EBITDA margins will be 5% below what they should be this year and next year. The renovations will only be over by H1 next year, after which the EBITDA margins of Fleur will be north of 48%. Okay. Thank you so much. Thanks for the answer. All the best from your part. Thank you. Thank you. Thank you. Next question comes from the line of Sumit Sinha with Macquarie. Please go ahead. Yes. Thank you very much. A couple of questions here. So Kunal, you said about back in when three, four years, 30,000-40,000 rooms, are we talking these 30,000-40,000 rooms will be operational, or they'll be operational plus pipeline? It will be, well then, it would be 40,000 rooms including pipeline. I'm not able to. The point is, Sumit, that we signed 5,000 rooms, but they will open three years later. It depends on how many operating assets we sign, how many green fields, how many brown fields. I'm saying 40,000 will definitely be including pipeline. How many are operating? Difficult to say, but I would say it should be north of 20-25,000. Got it. Okay. Perfect. Second question is, with these transfer of these rooms from Lemon Tree to Fleur, I think it was 1,565 rooms or so. What was the implied valuation that you used to get at to issue those 5 crore on shares? So there were two valuations. One was discounted cash flow, which was done by a third-party valuer. And one was the giving up of development capability and transfer of two hotels, which is Shillong and Shimla. So I would say if you look at it, it was roughly for every 100 shares of Fleur, 58 new shares were issued. Would that be correct? Yes. Which is how the new share capital of Fleur would be 158 shares, of which Lemon Tree has 59, plus Summit is getting due to that merger of some smaller hotel company. Warburg is buying APG's 41. 41 on 158 is 26%. And the balance, 52 out of 158 is going to Lemon Tree shareholders, including me. And that will be how Fleur will automatically be a listed entity. Got it. And in terms of, as you were doing the due diligence on this event, what sort of Lemon Tree becomes a unique asset, right, with really high margins, high growth rate, high ROCE, which is probably not seen in the hospitality industry globally. So what sort of comparable company analysis did you undertake to kind of arrive at a valuation for that? Very good question. I was hoping you would answer it, Sumit, or our transaction advisor, Morgan Stanley. But here is what we see. Typically, obviously, asset-light capital non-intensive businesses with high growth have much higher multiples than asset-heavy. But asset-heavy businesses with high growth also command higher multiples, as you can see in the Indian asset companies, than those asset companies that are not growing quite so fast. So basically, the difference in multiple is the implied growth premium. What I see happening is Fleur will 100% have a net EBITDA north of INR 1,000 crores by FY 2028, without doubt. Okay? Now the question is, how many of these 2,500 rooms we get? How many more do we add on? So what will the EBITDA of Fleur look like in FY 2028, which is, by the way, what will be valued when we list next year? And what will it look like going forward, which is the pipeline, which will derive the multiple? I do not know. Obviously, we are hopeful it will be something quite large. As far as Lemon Tree goes, whenever we look at the numbers, we are talking about EBITDAs, which are very, very significant purely from fee income without our 41% share of Fleur Hotels back and the implied Holdco discount. After all, I do not feel there should be a significant Holdco discount like HDFC with its subsidiaries because this is a concentrated portfolio. We are not a conglomerate. It is our business. So whatever the value of this 41% is in Fleur, I hope it will not be a large discount. Yes, there will be some Holdco discount, but not a very significant discount. So when we looked at this and we looked at our likely fee stream and our likely EBITDA, the numbers look fantastic for FY 28. Okay? And we have used comparables here. We have used Indian comparables. So now getting into specifics means guidance, but let me just say it is enormously value accretive to where we are today. Got it. Okay. One final question. Just want to understand how the GST, ITC dynamics work. So in the case, if the hotel room is less than 7,500, you don't get the credit? Now, if in a hotel, which is, let's say, your rooms which are different parts of the spectrum, is it proportionate in some way, or do you have to? I'm just trying to understand the dynamics of the proportionate. So it's proportionate. Let me give you an example. If I take last year, roughly half-half is above 7,500 and below 7,500. But if you take our rate increase that happened now, it may be 60, 40, which means that if 40% of our rooms, 40% of our revenue, is that correct? Yeah. For rooms which are selling at below 7,500, then the GST input credit we get is only 60% of the total, which means we lose 40%, which has an impact. It can be a significant impact. Last year, if we work backwards, it would have been about INR 35-40 crores. Is that correct, Kunal? Roughly 3%-3.5%. But this is going to reduce, actually. So this will be going to be in the range of 1.5%-2%. But 2% of, let's say, 18, 19, 100 crores is still 36 crores. Yes. Yes. So it will have an impact. So when I gave that, which I shouldn't have, given that guidance of Fleur Hotels at 48%, it was after adjusting, by the way, this. I think I had said earlier, our expectation is Fleur on a gross EBITDA before fees and everything else would have an EBITDA margin of 60%. This is what our expectation is for FY 2028. And then there are these incremental impacts, but the very large impacts, one-offs will obviously not apply, which is property tax at Delhi Airport, ex-gratia, and Code on Wages put together, that was what? 60 crores. That will not apply. The incremental spend on renovation, which is another 60 crores a year, will no longer apply from FY 2028. So all these costs will go out. The only incremental cost that will come will be the ongoing Labor Code, which is just a couple of crores, and the GST impact, and put together, it will be about 2% of revenue. Got it. Thank you very much. Thank you. Next question comes from the line of Dipak Saha with Nirmal Bang Institutional Equities. Please go ahead. My first question is, with the 202 rooms that we have checked with after, just from the timeline of these leases remaining, if you can share what are these two properties and what is the remaining timeline for these leases? These two properties, one is a 100-room hotel in Indore, and one is a 102-room hotel in Aurangabad. These are both Lemon Trees. They are with common owners. And this lease was signed, I think, what? 2008. Yeah. It was signed 17 years ago. One lease was for 24 years. So that will get over in six years, and one will get over in eight years, I think, broadly. Got it. And one last question on this context, just is there any divergence in the business strength of these two properties compared to, say, what we have in overall business scenario, or is it just because of what you alluded earlier that is the reason we have not transferred? Just trying to understand from this context. No, there was also a lease signed date, a transfer restriction that it should not be transferred out of Lemon Tree. So since normally, if there was 15 years left in the lease, you would have still gone to the owner and said, "Please permit this." But since there was not much time left and there is a transfer restriction, we said, "Forget it. Let it remain in Lemon Tree's balance sheet. Got it. Thank you. Thank you. Next question comes from the line of Samarth Agarwal with Ambit Capital. Please go ahead. Yes. Thank you for this opportunity. Mr. Keswani, I just wanted to understand on the Lemon Tree standalone side, what kind of profitability for the underlying hotels would you expect in the next couple of years? Because right now, at least from the industry reports, it is that your RevPAR, though, like-for-like is not exceeding that inflation rate that we have seen for the past few years. So just wanted, even for fees, it will make a difference. So just wanted to understand how the profitability for the underlying asset-light hotels would look like in the next couple of years. For the asset-light? Yes, yes. Not for equity, but the management and franchise contracts that you are signing right now. No, I'm a little confused. Sorry, Sumant. Are you asking about the hotels, or are you asking about our fee income growth? So my understanding is that as long as the asset-light hotels do well because you get a certain percentage of the GOP and the profit, so your fees will continue to grow at a good rate. But if the profitability itself of those underlying assets tends to shrink down, then perhaps the fee flow-through might be lower. I'm just trying to understand that. Okay. So typically, for every $100 in fees that we charge, about 65, two-thirds, maybe 70% is fixed, and 30% is variable. Okay? The variable is a function of whether we cross a certain EBITDA threshold in percentage terms and so on and so forth. So in the worst case, I would charge out of that 30, 0. If I perform, I'd say, 40% EBITDA levels for that hotel, I would charge 10%-15%. And if I get over 50% EBITDA levels in those hotels, then I charge the full 30%. So are you with me so far? Yes. Yeah? So is that clear? Yes. Okay. Now, in some markets, multiple things happen. We manage hotels which are inefficiently designed. Therefore, our ability to get to 50% EBITDA is itself compromised. In other markets, the hotel has got massive F&B, and the way to maximize EBITDA is actually through room income and not so much through F&B income. If you look at the weighted average flow-through, the highest flow-through is through room and then any other fee stream or income stream in a hotel. So there is a hotel which has a lot of banquets, a lot of restaurants. It is very difficult for us to hit an EBITDA of even 40%-45% because the flow-through of the F&B side of the business is much lower. So there are multiple reasons. Then it could be that a certain market is not doing as well as we thought over the next three, four years. Broadly, we take management contracts opportunistically, which means wherever there is a contract that comes up, we are happy to take it and run it. If left to us, where would we deploy capital is a completely different story. So when you see the fee income not growing so fast, it could be that in some new hotels we've opened, it's just not taken off yet for multiple reasons. What you should see is a secular trend. And I think if I look at our fee income growth, can you show that to me last three years? Yeah. So every year, it is about 20%. But I am hopeful now. You see, the problem was that we were opening far fewer hotels than we were signing. But going forward, now we'll be doing the catch-up, and I think you will see fee income grow proportionately. Understood. Yes, very clear. I just have one question on the profitability front. So we are looking at different operators around the world, and what I understand is you are doing higher margins than most of them at around 65%-70% EBITDA margin. So firstly, despite the scale of operations or returns, what is that difference through which you are able to drive the superior margin, and what would the EBITDA margin look like for the Lemon Tree standalone entity ex any contribution from its holding in Fleur? So let's work backwards for a minute. Our expectation is in our underwriting is that within two years, that is, by FY 2028, our EBITDA margin should be north of 80%. If it is 80% and there is hardly any depreciation. There's no finance cost, there is some small depreciation because of the lease of those two hotels. So if I take 80% and take out 25% as my tax because there is no write-off on tax, then frankly, my PAT should be 60% of my revenue. Simple. If margin is the case, then perhaps a given name like a Marriott is not able to even reach a 50% par margin. We are still at around 40% last year, right? You should ask them what they are doing. Understood. Thank you for your time. Thank you. Thank you. Next question comes from the line of Kunal Lakhan with CLSA. Please go ahead. Yeah. Hi. Thank you. Just taking a step back, just trying to understand the rationale for this transaction, right? Just trying to understand what were the challenges you were facing in the earlier structure versus today in this new structure, right? Because it's essentially that the shareholding of the Fleur remained the same, right, essentially, in terms of the shareholders remained the same, except for the change of hands between APG and Warburg Pincus. So that remained the same. So just trying to understand what were the challenges you were facing earlier in the earlier structure versus the new structure? So as you know, Kunal, we have multiple types of investors. The hotel business is two very clear subsets. Who designs, develops, finances, and owns hotels? Those kinds of investors want chunky returns, are willing to take development risk, and are looking at yield income. So these are normally who invests here? These are like pension funds, insurance companies. They are betting on inflation, repricing of these assets due to inflation, and a long annuity kind of return. Those who want to bet in the asset-light business are betting on brand management capabilities, betting on how you grow an asset-light business with very, very low, hardly any capital intensiveness. Lemon Tree was a combination of both, and that is our history. Because when we started this company, I still remember in 2004, 2005, 2006, 2007, when we had built only four or five hotels, whenever I went to a guy and I said, "Listen, let me run your hotel," he'd say, "Who are you?" So we were forced to build hotels in order to build our brand. But once we built our brand, technically, we don't need hotels because now it is time for Lemon Tree to monetize its brand, which has enormous recall. I mean, it is amazing when we open a new hotel, when I see the number of repeat guests or members of our loyalty program, it is actually, frankly, amazing for such a new company. Remember, we are less than 20 years old. Every other operating company is 75- 125 years old. So we are very well recognized. Why should we not monetize it? So we have actually separated two types of businesses. One is asset-heavy, long-term, appreciating asset, capital-intensive. It has a different kind of investor. And this business has a very different kind of investor, and we wanted to actually attract both types of investors. Sure. Sure. Understood. My second question, Kunal Lakhan, what were the valuations of the four entities that we transferred in absolute terms? I'm just in terms of shares, not things, but just the absolute terms, the valuations of Oriole, Sixstarr, Manakin, and Canary? I give it to you, you can work backwards. We own 59 today, and APG owns 41. We issued 58 new shares for every 100 shares, which means in that 58, Lemon Tree got, I think, five or six more for this, which is how it went up to 41% of 158. Who am I kidding? 41 into 158 means it was five and a half shares more, roughly. So out of the 58, 10%, that is 5.5 shares, went to Lemon Tree because of those four companies' merger. And the rest, which was an asset transfer of those 11 hotels and those hotels under construction, they accounted for 53, which went to the shareholders of Lemon Tree. Does that answer the point? Partly, because essentially, I still need to know the valuations of Fleur, right, that you calculated in the share offering. No, no, no. I repeat. I'll explain again. Just write this down. Fleur today, 59, Lemon Tree, 41, APG. Yeah. 58 fresh shares issued. Okay. Six shares go to Lemon Tree for those four companies' merger. So 59 shares become 65 shares. 41 is Warburg Pincus, Bang, or APG. That leaves out of the 58, 53 shares going to Lemon Tree, 52 shares going to Lemon Tree shareholders. Does it add up? Okay. Lemon Tree gets 59 today plus 6. That is 65. APG buys 40, Warburg Pincus buys APG's 41, and 52 shares go to Lemon Tree shareholders. Okay. Does the math work out for you? Let me just work on it, and I'll come back. Okay. Okay. And my last question is in terms of I know it's very difficult to comment, but APG held about 15% stake in Lemon Tree as well in parent entity, which obviously included Fleur also in the earlier structure. Now that they're out of Fleur, any outlook on the 15% stake that they hold at? They have told me they don't plan to sell, but I don't want to comment. If they do sell, I'm sure they will do it in an orderly way. But they are shareholders. They are the second largest shareholders after me. So if they do plan to sell, I hope that they do so in an orderly way with our help. But they have told me right now they don't have any intention to sell. Understood. All right. Thank you. Thank you, Anuj. Thank you. Thank you. Next question comes from the line of Prashant Biyani with Elara Securities. Please go ahead. Yeah. Thank you for the opportunity. Can we get the pro forma top-line EBITDA and PAT for Lemon Tree and Fleur in their new structure for the trailing 12 months? Which page? Trailing for Lemon Tree. No, this is only from Fleur, this income. No, this is last year. He's talking about next year. This is assuming the merger for the last three years. So, if you want to page 13 of our presentation. Yeah. So this shows Lemon Tree, but last year. It is, I think, quite different this year. For nine months also. Huh? For nine months also. Yeah, but so this year, it is a little different because now if I give you a number, you will be able to work out Q4, which is guidance, and Q3. So. For Lemon Tree, it's on page 22. And Lemon Tree is sorry. Fleur is page 22 if you look at Fleur. Okay. Sure. Thank you. And then how much is Warburg Pincus paying to APG for acquiring their share of stake? See, this is a transaction between one new incoming shareholder and one other shareholder. It could be at a premium depending on how keen Warburg Pincus was. It could be at a discount depending on how not keen APG was, how keen APG was to sell. I think it's a question you should ask them. I don't want to comment on it, but it was not an unfair value. And would. I think Warburg said it was Warburg, Prashant said in CNBC that it was multiples of what this 960 was. Yeah. Yeah. So it is optimal. Sir, would Warburg Pincus have ROFO on APG's stake in Lemon Tree? No. Okay. Thank you so much. But there won't be a ROFO, yeah, Prashant, because it's a public company. It's a listed company. You can't have a ROFO on it. And I don't think Warburg Pincus is seeing a big upside now in Fleur. So this is why they want to take a large stake in Fleur, put in hundreds and hundreds of millions of dollars for a chunky return. So as far as I know, there is no such deal between Warburg Pincus and APG on Lemon Tree. Sure. Thank you. Thank you. Next question comes from the line of Sumant Kumar with Motilal Oswal. Please go ahead. Yeah. Hi, Pat u. My question is for Warburg Pincus's commitment of INR 960 crore going forward. So what is the timeline? Number one. Number two, are they going to increase their stake at the level of what APG has in Fleur currently? See, currently, when you do the full demerger, Sumant, it is 26% on the fully diluted basis. The INR 960 crore if it comes in, will obviously increase their stake and dilute Lemon Tree. So Lemon Tree today is 41. They are 26. If they put in more money, their 26 will go up, and this Lemon Tree's 41 will come down. So that is the understanding. But they can only deploy this INR 960 crore in the next 12 months. Because once we list Fleur, then if we want to raise capital, and I'm sure Fleur will keep raising capital to keep growing, it will be through either through its internal accruals or it will be through QIPs. So the current structure of Lemon Tree is 59% and APG is 41%. So we have a similar kind of shareholding going forward for Warburg Pincus? No, no, no. It will now become if you go to our presentation, which we have noted here. I understand that. 26%, I understand that. But the kind of investment they are going to do in future, they can go that level with more infusion. No, no, no, no, no, no, no. They might go up a few percentage points. It's nowhere near 40. It will never go to 40, no way. We will always be much larger shareholders than Warburg Pincus. Okay. Got it. I know you're trying to find out at what value, and I'm trying to make sure I don't tell you. But it is fair to Fleur, it is fair to the Lemon Tree shareholders in terms of dilution, and it will be accretive to Fleur shareholders, actually. They will never cross or come close to Lemon Tree shareholding, even after dilution. Okay. And when we talk about the asset valuation, all the few players are listed in the space like X and Y players. Can we assume some premium or similar level or discount to that player on FY 2026 valuation or FY 2027 valuation? What Warburg Pincus has bought stake in the company? See, obviously, Warburg Pincus has underwritten something. They have kind of indirectly shared it. But here is how we are looking at it jointly. Because after all, Lemon Tree is also a shareholder, just a much bigger shareholder than Warburg Pincus. What we are hoping is to have a very large EBITDA operating platform with a very large pipeline, which means what do we want to capture? We want to capture a very large EBITDA and a large multiple. So obviously, we would like to be in the top quartile of multiple and with a very big EBITDA. So that is the intent. Now, whether we get there, how we get there, how do we risk mitigate, that is what how we execute that is obviously the challenge for us. Okay. Okay. Thank you. Thank you, sir. Thank you. Thank you. Next question comes from the line of Naresh Naikul with Systematix. Please go ahead. Yeah. Good evening, sir. Thank you for the opportunity. So actually, as mentioned on investor presentation, Warburg Pincus will acquire 41% stake and a primary investment of INR 960 crore. So I just want to know this investment will come in what form, like QIP, preferential share, and will it be indexed to Fleur's performance or eventually the listing of the Fleur shares? It will come as pure equity on a fair valuation. And this is not QIP. This is a committed line of capital, equity. We will take it only when we this will lead to growth for Fleur. As I said, Fleur itself will have a few hundred crores of equity. We can take debt on top of it. We can take as much as we want of this INR 960 crores. So up to maybe INR 3,000 crores of capital which are working, we can deploy in the next 12 months. This is not a QIP. This is a pre-listing investment. Once we list, we will not if there is any balance left of the INR 960 crores, we will not take that. We will then, as a public company, go to public markets and raise at public market valuations. Obviously, Fleur, Warburg Pincus will not invest in Lemon Tree sorry, in Fleur at a public market valuation two years out. It will be obviously at a discount to that, but it will still be a fair value as of today. Does that make sense? Understood. Yeah. Thank you, sir. Thank you. Thank you. Next question comes from the line of Rajiv Bharati with Nuvama. Please go ahead. Good afternoon, sir. So you mentioned two numbers, INR 1,800 crores and INR 900 crores. So this you are stating for FY27, is it? Because the Slide 23 you mentioned, which is INR 509 crores '25, and plus, let's say, INR 100 crores, which is sitting in another EBITDA number, which will come from standalone entity, INR 600 crores. You think this number will by 27 go to 900? 27 go to, I think, 850. Post-phase. This is all post-phase. This includes inorganic also? Or this is all organic from the current portfolio, sir? See, we have a couple of short-shorts. So we've added that. We have not added, for example, Shimla. We have not kind of really taken into account other than in a very small way. Shillong may open earlier. We have just made a guess on it. So let's put it this way. If I just go current basis, demerger, as I said, in FY26, it is 620. In FY27, it is 850. And this includes one or two things we are doing. But most of the capital has not been deployed. So this INR 3,000 crores we are talking about, potentially, I would say 95% of it is not giving any additional EBITDA here. If we acquire those 2,500 rooms, plus some other stuff we are looking at, because those 2,500 are active, there are many more in the pipeline, then this EBITDA number could change based on how many of these are operating assets versus how many of them are under development assets. So I'm giving you a broad range. I am saying we are very sure we'll do INR 850 crores or more in FY27 net EBITDA, and we are very sure we will cross very, very sure we'll cross INR 1,000 plus crores by FY28. Sir, one clarification. This INR 950 crores will be another round of valuation which will be done at the time of infusion or the current valuation will be made there? No, it will be at a premium to current value. Great. Thanks a lot, Anuj. Thank you. Thank you. Next question comes from the line of Sukrit Patil with Eyesight FinTrade Private Limited. Please go ahead. Yeah. Good evening, team. I have two following questions. My first question is to Mr. Patanjali. As India's hospitality sector is seeing rising demand from tier two, tier three cities, how do you see Lemon Tree balancing its premium Aurika brand with mid-market offerings to capture this growth? Could you share how the company plans to position itself over the next two to three years in terms of portfolio mix and customer experience innovation? Thanks. That's my first question. I'll ask my second question after. Thank you. You're being very considerate because I might have forgotten the second when I finished answering the first. Okay. Very valid question. See, what we find is we also start tracking where are our customers coming from, especially retail. While we have a clear idea of where B2B business is growing, which is corporate business, where is retail business growing? We like to see connectivity through airlines, which sectors are going full, what price are they going at, which airports are operating full, which airports are expanding, where are new airports coming, where are four-lane highways going, where are Vande Bharat trains connecting India. So we do a very detailed study of all this. Based on that, we form certain opinions, and then we ask partners. We could ask, for example, of MakeMyTrip, "Can you tell us where you're seeing maximum traction in terms of demand with cities from to cities?" So these are things we do routinely. Then we obviously subscribe to certain paid consultancies where we get clearer pictures of what is happening. What we have seen very interesting is tier two, tier three, tier four towns. Now, how many cities are there in India where there is 5 lakh population or more? About 200. How much consumption comes? Discretionary consumption is 95% from these 200. So obviously, we want to be in all these cities, whether asset-heavy or asset-light. So we do further assessments. What we generally feel is Aurika, the kind of positioning we are doing for Aurika should either be in a high-value resort or a high-value location. We are not looking at doing Aurika in tier two, tier three, tier four. Similarly, Lemon Tree Premier, again, are positioned based on ability to pay, willingness to pay, and depth of market. So there is a format for it, and I hope this has broadly answered your question. We have a framework. We are actually now using our digital platform, our AI/ML, to get more and more into this to pop out where we should go for capital investment. Thank you. My second question is to Mr. Kapil Sharma. With rising input costs and competitive pricing pressure, what forward-looking steps are you taking to sustain margin expansion while continuing to invest in new properties and technology? Specifically, how do you see operating leverage playing out in FY2027, and what benchmarks are you setting for long-term cost efficiency? Yeah. Thank you. Yeah. So as you know, in the operating cost of a hotel, there are two major costs, which is one is the manpower cost, and second is the power and fuel. So on both the fronts, if you have very, very, very focused attention and you clearly monitor it to keep it under control, then you can control your budgets and keep your operating costs under control. So as you know, we have a very low increase in the manpower cost because of our model, which is relating to the HR. And secondly, on the power and fuel front, we are, as you know, regularly and continuously focusing on the renewable energy proportion. So we are increasing the sources which are renewable sources, the power coming from them, and we have got the target to make it 50% of the total consumption coming from the renewable energy sources. So based on this, we would be completely focusing. And as you rightly mentioned, we're using the technological solution also to reduce our costs. And that's the main focus areas where we continue to pay our attention and keep the margins at a high level and keep control on the costs. Thank you. And best of luck for the next quarter. Thank you. Thank you. Next question comes from the line of Navin Vijay with NS Capital. Please go ahead. Good evening, sir. Given the transaction going through, Lemon Tree will have their job cut out in operationalizing all the pipelines. So roughly, what would entail this activity of operationalizing, sir? So how we do it is see, our operationalizing is we have a D-360 strategy. So 360 days before see, these hotels are under construction or under renovation or under upgrade and so on. So we have a fairly clear line of sight when we need to open this hotel, which is why we give now quarterly. We say we expect to open this quarter, though we report, I think, now every year of maybe open. So once we know that, roughly 360 days before we identify a general manager in our system, typically the owner wants to interview him. We identify the heads of department again in our system. These are all placed, depending on the role, between nine to three months before the hotel is expected to open. Separate conversations happen with the revenue team, the sales team, the revenue management department, so on and so forth, our partners who distribute our hotels. So we try and build up some pipeline of demand before the hotel opens. Simultaneously, we start recruiting. So typically, in a managed hotel, the general manager is our employee who is deputed there on the payroll of the owner. The rest of the employees are employees of that hotel and therefore that owner. We then identify these people. We try and recruit locally to strengthen local communities. We send training teams from our company. They do a lot of training programs in the last three months before opening the hotel, including mock runs. Then we open this hotel. And any support that the owner needs, he pays for through technical fees. Whether it is relating to the project, whether it is relating to engineering, whether it's relating to housekeeping, whatever it is, all training. We help with all that. That's part of the fees the owner pays us. Okay. It's a very standard process. That is how we've opened 90 hotels in the last, I think, actually 80 hotels in the last six, seven years. We will open another 130 in the next three, four years. Great. Great. From what you're saying, most of the pipeline is on the management contract and very few are on the franchisee. Is it? That is correct. No, no, no. Franchisee is also there, but franchisee is a business we are watching closely because there is an implied risk to our reputation because a franchisor actually runs the hotel. That general manager of that hotel is not our employee and therefore is more aligned with the owner. And unfortunately, in some cases, we have found owners are ready to cut costs and so on and so forth. And that impact is ultimately felt by the brand. So our strategy on franchise is fundamentally different. It is going to be very technology-led, and that is a key part of our growth plan going forward. How do we manage to ensure our brand doesn't get diluted? Great, sir. Thank you. Thank you, sir. All the best. My pleasure. Thank you. Thank you. Next question comes from the line of Manoj Kumar Pal, an individual investor. Please go ahead. Yeah. Thank you, sir. Thank you for giving me this opportunity. Sir, my question is, actually, most of the questions have been answered. And one question is that, sir, as of now, as a consolidated level, our ROE is at 18%. So my question is that, after the demerger, what will be the ROE or any guidance on that? I actually haven't even evaluated that. Good point, Manoj. Can you wait till the next con call? We will actually study this. And I am sorry, I don't have a number, but obviously, it has to be superior to where we are today. But actually, if you look at from the Lemon Tree standalone perspective, which will be an asset-light company, it would have a very high ROC because there are hardly any capital investment into that except for technology. So the ROE will be very high in the Lemon Tree asset-light space. And I think as it grows further and adds to its new portfolio, there would be better margins and better ROI on that also. But exact number, obviously, we'll have to see. Actually, I should know that. Yeah. Thank you, Manoj. If you are in the next con call, we will try and answer that. Okay, sir. Thank you. Thank you very much. And best of luck for your future endeavor. Thank you. Thank you. Thank you. Next question comes from the line of Jay Kalwar, an individual investor. Please go ahead. Yeah. Thanks. And congratulations on taking a great leap forward. I would like to ask as to whether the brands that I believe will be now housed with Lemon Tree. Would you possibly get a royalty or a fee for the brand per se? That's one. And secondly, were a regional player, let's say two, three, five properties and his own brand, come to you and say, "Could you manage this property for us and onboard us onto your technical systems?" Would you do that in Lemon Tree? So thank you, Mr. Kalwar. I must now go back for a moment. Let me explain. What is the global model? In some ways, what Lemon Tree has done now or plans to do through this demerger is follow what Marriott and Hilton did earlier, which is remove all their asset-heavy businesses and give the rationale and put it in the separate company. So Marriott did it with Host Hotels, and I think these Hilton guys did it with Park Hotels. Okay. Now, if you talk to Marriott or Hilton, and I have talked to many of these large global players, if they charge fees, typically their fees range from 10%-15%, even more of revenue. How do they break their fees up? In their minds, I find if they do a pure franchise and by the way, Marriott does a lot of franchise. In the United States, 70% of their business is franchise, which means they don't even manage hotels. Typically, their fees for franchise are two-thirds of the fees they charge in a management contract, which means that if they charge $3, $2 is towards the brand and $1 is towards management. In our model, the way we are looking at growing our franchise business, we also want to capture two-thirds of the fees that should come if we do pure franchise. Therefore, I am not sure we want to do management because it is not a value-adding kind of business for us. The opportunity to franchise 1.5 million rooms in India, in my opinion, is the biggest hospitality opportunity in the world today because India is at a structural point. There will be more and more cohorts of customers who want branded hotels, who are aspirational, who are earning more income, who move into the magic 36 lakhs or more per year of household income. These are the consumers of mid-market hotels. So we may franchise, but I do not think we will manage without our brands. I don't think we would like to do that. Okay. However, if there is an opportunity for co-branding and we manage and the opportunity is relevant enough and large enough and strategic enough, then we would be very open to that. Okay. So you would largely manage your own brand and not really take responsibility for another brand coming in. Correct. That's right? That is correct. But if it's a franchise and you really wrap yourself around the franchise following times to come, that would be fine with you if it is a set of properties that come along. Absolutely. Okay. And my second question is, after the great infusion of capital, let's say about INR 960 crores, which is what you refer to, would one say that Warburg would get to own about one-third of the Fleur Hotels? We haven't worked that, but it would be less than that. Less than that. That it would be less than that. Yeah. Okay. Okay. Thanks so much. And how. Thank you. Next question comes from the line of Vishnu Murthat with Greenhill Consulting. Please go ahead. Hello. Thank you for giving me this opportunity. Basically, I have these two questions. One, what are the key risks that you identify or foresee in coming years? And second, what are the plans for international expansion? So we want to, obviously, grow our fees faster than the 20% that has occurred in the last two years. And there is a reason for that. A lot of investors/analysts have asked us that if you're signing so many hotels, why is your fee income not growing at the same rate? And we found a very interesting thing. We did a study of this, and we found we typically open as many hotels in a year as we signed three years ago because that is the time it takes to operationalize. So if you look at Lemon Tree and it signed 1,500 rooms four years ago, then we opened 1,500 rooms this year, although we are signing maybe 5,000 rooms. So what this really tells you is whatever we are signing today, the fee stream will happen typically three years later, just as a number. If you want to do it more rigorously, then what you have to look at is what is our fee income per operational room multiplied by this 5,000 we have signed this year and attributed to, say, FY29. You know that is going to come then. You would be quite accurate then. That is the fee income. Whatever we have signed in the last four years, you have to look at, attribute an income per room, and then take it forward plus three years. Coming to international, I always ask a simple question. Why is it that we are so focused on international travelers coming into India, excluding the Indian diaspora, which is like nine, 10 million people? Why are we not looking at the fact that 30 million Indians traveled outside India last year? So to me, one very attractive market is we are trying to build a connect with Indian consumers in India. If we build a strong enough connect with a strong enough loyalty program, why should we not follow them where they go in large numbers? And I mentioned, where are these places? This is Middle East. United Arab Emirates gets 10 million Indians every year. Even if I take out the migrant labor, there are still 5 million guys who go there every year. If I look at Thailand, that's another phenomenal market. So there are clear markets, Nepal, where we've already started. We are already present. We would like to go where Indians go in large numbers and have our inventory share there where we can attract a disproportionate number of them. So that is a very simple thing. We want to follow wherever Indians go. We want to follow our customers. We have no greater ambition than that. Okay. Just to explain one thing, we expect that these 30 million trips every year. Our best case is that it will be 150 million in six years. Okay, and what are the key risks that you identify for coming in future? Key risks? Yeah. See, our risk to us, there are three or four risks. The first risk is if we take our eye off the ball on our brand. Our brand is a very critical strategic value. So whatever is wrapped around our brand or whatever our brand wraps around, that is a very key risk. Second is people. People for us is an enormous risk because the fungibility of a hotel-trained person is across industries, and hotels are among the worst paymasters, okay, and cannot afford to pay better, actually. The third is technology risk and distribution risk. Somebody comes along, say, tomorrow, frankly, Amazon or Meta wakes up and says, "I've got 2 billion guys on my platform. And you know what? I'm going to white-label something called Amazon Travel and Stay. And if I get enough of these guys to book through me, I'll just ask a question. Give me your budget. Give me the type of hotel. Give me your itinerary, and I'll book your hotel room, your airline, everything that you want." Then they will disintermediate everybody. No brand in the world can withstand that. The only answer to that is you should control enough supply in a micro market where even this kind of strategy doesn't disintermediate you. So look at Gurugram. We would like out of 4,000 rooms in Gurugram, we'd like 3,000. If we can do that, then nobody can disintermediate you because you control supply. So obviously, we constantly discuss risk management, risk mitigation, but I'm trying to give you a flavor of it. Okay. Thanks a lot, and congratulations for the happenings going around. Thank you. Thank you. Next question comes from the line of Anuj Upadhyay with Investec. Please go ahead. Yeah. Hi sir. And thanks for the detailed explanation of the risk. Sorry on my part if I'm repeating this question, but you mentioned that the margin across the Lemon Tree could go up from 70% to 80% over a period of time. And so as to do with the Fleur, we can sell at around 50% floor. I believe by the time this restructuring would happen, all our renovation exercise would have been done across Keys. So that could scale up the margin for Keys. But how exactly the Lemon Tree margin would improve from 70% to 80%? And would there be any further scope for margin expansion across Fleur, considering the fact that the rate hike could not be as steep as what we have seen in the past two or three years? So we do. I'm not going to get into specific numbers. We just looked at our management fee of Lemon Tree from Fleur and from third-party hotels this year, next year, and the following year, based on what we know for sure will happen. And we asked ourselves, what are the expenses? The only expenses, frankly, are corporate expenses and technology expenses. If we look at that and overlay what we expect to spend there, then our margins are already 76%-77%. Okay. So that it goes to 80% is a no-brainer because once we add some more hotels, the corporate staff, technology expenses will go up, but the fee income will go up. So when I said 80%, I am assuming a very small number of that 2,500 rooms coming in because it's an asset-light business. Actually, it is just monetization of your brand because all your other expenses are distributed with the owners. As far as Fleur goes, you're absolutely right. If I take I keep saying management with Lemon Tree saying the margins have dropped to 42%-43%, but that is actually incorrect. We have spent 9% of revenue in these one-offs and this, what is it called? Renovations. Renovations above normal, 9% above normal. So the minute we go to normal, the margin will expand by 9%. It's simple. And this is post fees. So with 42, 43, I'm saying we'll be over 50. But to be safe, assuming there'll be expenses, there'll be many other things, we have said that we will definitely be 48% of our revenue will be net EBITDA after all expenses. Thanks, sir. That's helpful. And wish you good luck. Thank you. Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of the question and answer session. I would now like to hand the conference over to the management for closing comments. Thank you, everybody, for your interest and support. We'll continue to stay engaged. Please be in touch with our investor relations team for any other details or discussions, and we look forward to interacting with you soon. Thank you. On behalf of Lemon Tree Hotels Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.