Ladies and gentlemen, good day, and welcome to the Lemon Tree Hotels Limited's earnings 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 and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mitesh Jain from CDR India. Thank you, and over to you, sir. Thank you. Good evening, everyone, and thank you for joining us on Lemon Tree Hotels Q3 and nine-month FY 2026 earnings conference call. We have with us Mr. Patanjali Keswani, Executive Chairman, Mr. Kapil Sharma, Executive Director and Chief Financial Officer, and Mr. Vikramjit Singh, Managing Director and CEO of the company. We would like to begin the call with opening remarks from the management, following which we 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 that was shared with you earlier. I would now request Mr. Keswani to make his opening remarks. Over to you. Good afternoon, everyone, and thank you for joining us on this call. I'll be covering the business highlights and the financial performance for Q3 FY 2026, post which we will open the forum for your questions and suggestions. In Q3, Lemon Tree recorded its highest ever revenue and EBITDA. At INR 407.8 crore, our revenue grew 15% compared to Q3 last year. Net EBITDA grew 12% year-on-year to INR 206.4 crore, translating into a net EBITDA margin of 50.6%, which decreased by 133 basis points year-on-year. The decline was primarily due to continuing increased investments in renovation, technology, and the GST impact. While these expensive investments accounted for 6.4% of revenue for this quarter, we expect all these three expense heads to reduce to about 3.5% of revenue by FY 2028 and onwards, leading to a corresponding expansion in EBITDA margins. The change in GST in this quarter accounted for 1.8% of revenue and a seasonably strong, seasonably strong quarter of the year, and we expect this to be 2% for the full year in FY 2027, and then further reduced to 1.7% in FY 2028. This decrease will be a year-on-year trend, as the number of customers paying a rate below INR 7,500 keeps reducing in the medium term with our planned price hikes and ARR growth. Additionally, all our future supply is being planned under the upper upscale Aurika brand, which remains largely unaffected by this change. Q3 FY 2026 recorded a gross ARR of INR 7,487, which increased 11% year-on-year. The occupancy for the quarter stood at 73.4%, a decrease of 82 basis points year-on-year. This translated into a RevPAR of INR 5,494, which increased 9% year-on-year. We incurred an expense of INR 31.3 crore as one-off exceptional items related to the labor code impact, ex gratia payments to employees, which is finally over, and the property tax payment in relation to the properties in New Delhi. Consequently, the company's profit after tax stood at INR 81.8 crore for Q3 2026, an increase of only 2% year-on-year. Cash profit for the company stood at INR 131.1 crore in Q3 26, an increase of 14% year-over-year. On the asset-light side in Q3, we signed 17 new management and franchise contracts, adding 1,855 rooms to our pipeline and operationalized 9 hotels, adding 816 rooms to our operational portfolio. As of September 30, 2025... Sorry, as of December 31, 2025, the total inventory for the group stands at 259 hotels and-- sorry, 21,942 rooms, with 11,772 rooms and hundred and thirty hotels being operational and the rest in pipeline. Fees from management and franchise contracts for third-party owned hotels stood at INR 22.9 crores in Q3 26, an increase of 24% year-over-year. Fees from Fleur Hotels stood at INR 25.3 crores in Q3 2026, which stayed flat year-on-year due to the impact of GST change and accelerated renovation in the Fleur portfolio. Total management fees for Lemon Tree stood at INR 48.2 crores in Q3 2026. Now, briefly touching upon our other initiatives, we have finalized the designs for Aurika Nehru Place, a glimpse of which you can see in the annexure section of the investor presentation. Secondly, we plan to open two out of the three blocks of Aurika Shimla by Q2 this year to capture the increased demand during the summer season. Thirdly, in January this year, we have signed a license deed for a 47-room Heritage Aurika hotel at Varanasi, located right on the ghat adjoining the river Ganges. This hotel has the potential to do extremely high rates, owing to both the strategic location and the deep demand of the Varanasi market throughout the year. With this, I come to the end of my opening remarks and would ask the moderator to open the forum for any questions that you may have. Thank you. Sir, should we open the floor for questions? Yes, please. Thank you very much. We will now begin with the question -and- answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, you may press star and then one. Our first question comes from the line of Karan Khanna from Ambit Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. Part of my first question is on the RevPAR growth during the quarter. Most industry reports mention a 12% RevPAR growth for the industry in 3Q FY 2026. Even your peers have reported RevPAR in the range of 11%-14%. Despite some renovation benefits, you seem to have fallen short here. Could you share the reasons behind this? Yeah, just go to the reasons, the reasons and brands. So basically, Karan, one is we don't have peers who are currently operating in the Indian listed space. They are all mostly luxury heavy, so their ability to reprice in winter is normally higher than ours, as I'm sure you've observed in the last 3 years. Now, if you look at what has happened to our portfolio, we have been affected by Gurugram. Gurugram has gone through a very weak quarter, and in fact, our RevPAR growth has been negative. But if you look at the rest of the markets, Delhi has been 11%, Hyderabad has been 19%, Bengaluru has been 14%. So it is the tier two markets, and Gurugram, which have really affected us the most. Secondly, Mumbai is still... While we are still, we are still focused on the occupancy side in Mumbai. So if you notice that, you know, our focus has always been how do we drive higher and higher occupancies before we reprice? So I'm quite pleased that for a very large inventory hotel, although it's been only two years, we've gone to 79% for about 1,000 rooms at the airport micro market. So overall, I would, I'm not unhappy with the performance. And, you know, you will see RevPAR expansion once stabilization occurs, really in Mumbai and Gurugram picks up again. Rest of India is anyway, if you look at all the reports, has all gone through minor increases in, what is called, RevPAR growth. It is the main markets, the deep markets, that have shown the highest growth. Sure. My second question, Patanjali, on the renovation benefits. You know, in the Keys portfolio, we've seen almost 25% RevPAR growth. Are there any other brands where you're expecting such growth going ahead? And consequently, going into FY 27, what are your RevPAR growth expectations overall? See, if you notice our performance, Karan, we have grown, you know, like, if I look at 2024 to 2023, we grew about 23%-24%. 2025 to 2024, we grew about 20%. 2026, we have shut a lot of rooms. So, you know, while we report RevPAR on full inventory, actually, we had shut 1,200 rooms this year, part of which is still shut, by the way, like the Keys portfolio and so on. So you're not getting a really, a full picture of how the performance will be. I would say if you look at 2028, that is when the entire portfolio is renovated, and we go back to our standard, minor interventions in one-sixth of our portfolio for refurbishment. Please realize that there is, you know, a shut inventory which affects us. I am not, as I said, if I look at competitive performance in these markets for competitive hotels where we operate, we have shown actually a very significant improvement in performance relative to the market. Sure. And then lastly, on Aurika, given that, you know, now even the demerger process is underway, how should one think about growth for both Lemon Tree standalone and for Fleur? And in your post-demerger call, you also spoke about INR 1,000 crore EBITDA for Fleur. So, and you were mentioning that you are looking to close a few opportunities as far as Aurika is concerned. So, by when do you expect to close more announcements on this front? So you saw we did a small closure, but actually the one we just closed, which was Aurika in Varanasi, is the equivalent of a 150-room Aurika. Because its ARR will be 3x of what the other Aurikas will be. That is the market in, say, Varanasi. We are now, you know, we hopefully in the next 2-3 months, we will start construction of the Aurika Delhi, which we hope we will complete in 3-3.5 years. So going forward, I mean, I think you will hear a bunch of... I hope you will hear a bunch of announcements from us on acquisition slash greenfield opportunities. I don't want to give guidance as to how many and where they are, but let me assure you that we are in. As I mentioned last time, there are roughly 2,500 rooms we are looking at, and we are pretty sure we'll be able to, you know, add that level of inventory to our company, in the next one year. That's point one. Point two, I said EBITDA of INR 1,000 crore, I meant in by FY 2028. Sure. Sure, Patu, this is helpful. Thank you. I'll come back into queue. Thank you. Thank you. The next question comes from the line of Vaibhav Mohile from Haitong Securities. Please go ahead. Hi, sir. Thanks for the opportunity. My first question was regarding our status of renovation of the portfolio. Can you share the current percentage of portfolio that is being renovated? And for Q3, what was the portion of inventory that was shut down? ... Okay, so you see, we have. Think of our renovation as in two parts. There is a whole bunch of hotels that opened in just before COVID, so they didn't, you know, we were. They don't really need renovation except a refurbishment. So if I take those 1,400-1,500 rooms out, the portfolio that really needs renovation is about 4,100 rooms of the owned portfolio. We have completed over 65% of them. This year, I think we renovated about 1,200 rooms, so at any given time, there were about 700-800 rooms shut. There was an overlap, obviously, in the middle of the off-season. And we still have, I think, about 200 rooms shut, which are really in various parts of the Keys portfolio. So my expectation is that the full portfolio, which we target, will be done by next year, which is those 4,100 rooms. And, after that, we will go back to what is called just a refurbishment cycle. So every year we just refurbish one-sixth of our hotels, and that will be at a much, much, much lower cost. And I think that's explained in various slides in our investor presentation. Does that answer the question, Vaibhav? Yes, sir. My second question was on our performance for Lemon Tree Premier and Lemon Tree Hotels. I believe key properties in these two segments, in these two brands have also been renovated, mainly for Hyderabad, Delhi markets. But the overall RevPAR growth for these brands is still in high single digits. There has been a bit of an occupancy decline in Lemon Tree Hotels as well. So any particular reason for that? Yeah. One is the Lemon Tree Hotels that you see, the major decline was in the portfolio in Gurgaon. So Gurgaon, we have Lemon Tree Hotel in Sector 60. By the way, the same impact you will see in Red Fox. Sector 60, Gurgaon, which is 250 rooms, had very large blocks last year in Q3, which did not materialize this year. Number 2 is that the other hotels, of the Lemon Tree brand and the Red Fox brands also were notably weaker this quarter than the previous year, same quarter. When you come to RevPAR improvements, really, if you take out Gurugram as an example, then the improvement for the—for and the rest of India, which is tier two, tier three kind of products, you will see our actual growth is Delhi was 11%, but of course, 100 rooms were shut in Delhi out of 500. Hyderabad had 60 rooms shut out of, I think, 660, but still managed 19%. Bengaluru had about 15% of the inventory shut, grew 14%. Pune, we have finished renovating the Pimpri hotel. Hinjawadi was, I think, 20% of the inventory, but 25 rooms were shut. So these markets where we have actually got nearly fully renovated products are showing quite a healthy growth. In fact, for Delhi, you will see the same thing from this year, by the way, because now we have more or less a fully renovated portfolio in Aerocity, too. Understood, sir. If I may squeeze in a last question, regarding the slide which are included in the presentation for impact of renovation, GST, and tech investments. So tech investment- Yeah ... portion, you are saying will actually increase next year as well. So, any particular infrastructure where you want to increase this expense? Because I believe our loyalty program is now in place. We have already revamped our website as well. No, I think we have to make a lot more investment in loyalty, frankly. We are looking at, you know, like agentic AI for our. We've got a big call center where we have a certain amount of expense, which is obviously not reflected here. And we want to significantly reduce it, move towards chatbot, so on and so forth. So let me just assure you that all the tech investments we are looking at, we are looking at clear monetization of them. And this is really, you know, we started it only last year, in FY 2025, if you notice, and this will continue for the next four or five years. It will become increasingly a smaller and smaller percentage of our revenue, but we hope and expect that it will yield fairly positive outcomes for us, especially for the managed and franchise portfolio. All right, sir. Understood. Thank you so much, and all the best. Thank you. Thank you. The next question comes from the line of Achal Kumar from HSBC. Please go ahead. Yeah, hi. Thanks for the opportunity. First of all, you know, just want to understand, now, given that you've already done, sort of a draw a line in terms of your structuring and all, what is your-- what is your key priority, for the next one year or until you list your Fleur? I mean, where do you want to see Lemon Tree and Fleur at the time of listing in terms of size of the business, margins in our ROCE, and, and if you could please give a bit of a color in that? So Achal, you're asking me to give guidance, which is not something I really want to do because you'll come and stick it down my throat one year later. But let me tell you broadly how we are looking at this. Sure. You may have seen that our fee income did not go dramatically this year, in spite of the fact that we added 1,600, I think, 1,600 rooms to our portfolio. So, you know, here is the deal about a management company. Suppose you sign 5,000 rooms, I explained this earlier, 5,000 rooms this year. Typically, the full impact of the revenue stream or fee income from those rooms comes after three, three and a half years. Because some of those hotels have to be, you know, are being built, some are being converted, some are being renovated. And then once they open, they have to all stabilize, and the full impact of the fee income takes, say, three, three and a half years. So really, what you are seeing of Lemon Tree is the fee income of hotels we signed 3 years or in fact, pre-COVID. Now, if you look at those 1,600 rooms we signed this year, half of them we opened this year, half of them opened in H1, and the impact is actually already showing at 24% growth in fee income. We opened another 800 rooms in this quarter, that is Q3. There was nearly zero impact to those 800 rooms. So the way I would urge you to look at it is, we earn a certain amount of fees per room. It is fairly easy, and that's why I don't want to give guidance. It's fairly easy to say we are going to have 22,000 rooms as of today, within the next 3 years. It is very easy to work out what the fee stream will be. Now, as far as Fleur goes, because we are going public, I have given some form of guidance, that is by FY 2028, which will be the first year we think it will be, fully a public. We should do an EBITDA about INR 1,000 crore. I'm pretty - not pretty, I'm very confident we will achieve that number. And this is after our fees, and we will charge fairly significant fees, you know, out of, to a company of that size. So if you add Fleur fees, you add our 15,000-16,000 rooms beyond Fleur that we are going to be on a stable basis operating in the next three years, and excluding any new hotels we sign, which may or may not be operational three years out, the numbers are fairly substantial, and it's not difficult to calculate them. I don't want to give a number, but I will say clearly it is substantial. And keep in mind that Lemon Tree will be the first asset, fully asset-light, brand owning, tech and distribution and management company in India. The first. So I think it will be an interesting split, and you'll have to wait till that moment for us to actually show you the actual numbers. Right. Fair enough. Then second question, I wanted to understand about your plan in terms of rebranding. So you rebranded one of your Fox Hotel this quarter. Do you have plans to rebrand more inventory? And you know, just want to understand what kind of what kind of spending does it more or is it like the same hotel you just rebranded, or you spend, first you upgrade the rooms quality and all, and then you sort of, you know, rebrand it? So how easy or how difficult it is to rebrand? So could you please give a bit of color on that. So, for example, let me give you specifics. Since we are renovating as opposed to refurbishing our entire older portfolio, we said that we would look at those hotels in that portfolio, where we felt there was a significant ability to reprice, based on the product, the new product that we imagined for it and its location. So a classic case is Red Fox Hotel, New Delhi. We rebranded it Lemon Tree, and it showed a fairly significant increase in ARR. It is not visible really, because, in the RevPAR growth of, LTH, but it was quite significant. Now, we plan to rebrand since we are renovating Red Fox, Hyderabad, which is again in a great location with large rooms, we are planning to call it a Lemon Tree hotel. It is adjoining the Lemon Tree Premier, and this will happen in Hyderabad by October this year. Similarly, we rebranded Lemon Keys Select into a Keys Prima in Pimpri-Chinchwad, and we intend to actually rebrand Keys Whitefield into a Keys Prima, which is the equivalent of a premier, once the renovation is complete in the next 6-8 months, because that is a large inventory, 220-room hotel, and it is already showing significant improvement in performance. Other than that, I don't think we have a clear thought on what else we should—or clear view on what else we should rebrand. There is no incremental cost in rebranding. Since we are renovating, all we are doing is fitting it into those new brand standards. We will, however, look at Lemon Tree Alappuzha, which is a small but very attractively located hotel outside of Kochi, and we will perhaps make it an Aurika, but not in the very near future. Another opportunity we feel faces us is that the Red Fox in Jaipur, which is a 183-room hotel, the land has become so extremely valuable that if in our minds we look at monetizing that land, then there is a case. Because of its location, it is between the airport and Rambagh on the main Jawaharlal Nehru Marg. There is a case to make it a 150-room Aurika. So these are the thoughts we have. This is obviously subject to a return on investment. Other than that, we are not really looking at rebranding anything. Does that answer the question? Yeah, absolutely. That's fantastic. Thank you. My final question was on the tech side. So basically, if you could sort of take a bit of a deeper dive as to, you know, what exactly are you doing? Are you strengthening your sales and distribution channel? Of course, you talked about loyalty. You're doing a lot on the loyalty side, but what else are you doing on the tech side, and how—what kind of benefits do you think it would cause? And especially, I'm sort of thinking about the sales and distribution channel, because, you know-... If I see, I mean, everybody sort of trying to have extended sales distribution channel, you know, big hotels are talking about Marriott and all, Marriott and that kind of world. For you guys, what are your plans and then where is standing in terms of tech, please? So tech to us is... Well, one is the hygiene side, one is the up, revenue side, okay? So from the hygiene side, we feel it is necessary for us, because we don't want to miss the boat. And, you know, we are a small company, a mid-sized company, maybe in the hotel space. We do not have you know, enough tech backbone as a standalone company. So we ask ourselves: What were our pain points, and how do we look at the whole tech journey for our company? And this is about two years ago when we first started talking to BCG about this. So we realized that one is that we need to go AI first, digital first, and really for us, it's been a short journey. It's only been two years. We focused initially on, initially, actually only on creating a single source of truth because we had multiple systems which were talking to each other through API. Some of them were not talking to each other. So, you know, the classic case of growth from small to medium. So first was putting, you know, getting all our data sources together, a single data lake, migrating it to Amazon with a private cloud, so on and so forth. Then we asked ourselves: How do we use this data for better and more informed decision-making? So the areas we looked at was revenue management. Then we tied up with Salesforce for a better way of doing sales. It's called Next Gen Sales. We also looked at personalization and loyalty. So they were all in phases. You see, this requires a cultural transformation in a company. It requires. The technology side is only one third. Two thirds is actually the cultural change, and it's a journey we are going through. It's encouraging. We're also asking ourselves now that we have started creating products, what I would call, you know, minimum viable products, is how do we monetize it now with third-party users of this? Because if for Lemon Tree, at our size, we find a whole lot of tech painful and difficult to digest, then the question arises: What happens to 1.5, 1.6 million rooms in India, which are much smaller individual hotels, the owners of those hotels? Is there a way we can offer them similar services? So it's a three-step process. It was first getting our house in order. Number 2, seeing how it would help us. And now number 3 is: How do we go to market with it? And then how do we overlay this with our own, brands and move the franchise/management route in a more aggressive way? So that's the vision. It's a two- It's right now, only 2 years. But I think the way we looked at it at the most basic level was that we have invested in, in, you know, you know, a few, you know, 4, 5, 5,000 crore worth of assets we have created. Even if we improve the return by 1%, we are still talking an INR 50 crore improvement in, from technology alone. And I think, frankly, we've achieved at least half of that. So from a pure technology investment and return perspective, even within the system, it has been a good journey. Perfect. Thank you so much. I'll come back in the queue. Thanks. Thank you. Thank you. The next question comes from the line of Abhay Khaitan from Axis Capital. Please go ahead. Hey, hi, thank you for the opportunity. So a couple of questions. Firstly, a quick clarification on the management fees, the growth that we have seen. So, in terms of operational rooms, we can see around 32% growth in terms of managed rooms, but the fees has only grown by 10% in aggregate and from third party, only 24%. So is there any reason why is there a discrepancy? Because one would assume that the growth would be at least the number of room growth, and then there would be some risk growth on top of it. So any reason for this discrepancy? Yeah. So if I looked at it really, we added 1,600 rooms in the nine months of this year. 800 rooms were added in the first, in H1, and 800 rooms were added in Q3. Now, really, fee income becomes meaningful with new hotels only after they stabilize, because a large portion of it is the kind of business you're pushing in there, the revenue that you generate, and the incentive fees that you earn. So when I look at these 1,600 rooms, I would say they have generated a return only that of one-fourth of what their potential is. But it will take a year or more for them to really give a return, because many of them are new, many of them are, you know, in the undergoing stabilization. Do you get me, Abhay? So it's not like they will immediately start giving the full set of fees that we require or intend to earn. As far as Fleur goes, there was an impact of GST changes and accelerated renovation. So, I think you will have to wait, because when the renovation intensity at Fleur moderates and the full renovated inventory ramps up, then fee income growth will re-accelerate, and it will be aligned with the new income that we earn per room from this fully renovated portfolio. Understood. That was very clear. My second question is mostly more on the strategy bit, in the sense that I understand that there is a, you know, strategic restructure that is going to happen from the Fleur side. But in terms of your own room addition, right now, I think it's completely focused on a few Aurikas.... But, would it be fair for us to assume that all the other owned room addition that is going to happen from Fleur end will only happen after the demerger is completed? Or can we expect some announcement even before that as well, for, for other brands like Lemon Tree or Lemon Tree Premier? See, we would certainly like to show a good growth pipeline. I am pretty sure that in the next 12 months, we will show a bunch of additions. Some may be greenfield, some may be brownfield, and some may be outright acquisitions. We are looking at all kinds of opportunities, and I think you will have to wait over this next one year to hear what and how, you know, we intend to grow the portfolio. But it will be quite exciting. Thanks. Thanks, okay, for this. Okay. Thank you. The next question comes from the line of Sumit Sinha from Macquarie. Please go ahead. Yes, thank you very much. Couple of questions here, Patel. So, if I remember, you know, when you did that call in January, you spoke about the GST impact at 3%-3.5%. Seems like that's come down. Is that kind of a revaluation of how you're planning to increase ARR and the repricing after the renovations? That's question number one. Secondly- Mm-hmm. You spoke about what happened in Gurugram. Can you point us to, you know, what we should be looking out for next couple of quarters? Maybe if you have visibility into some of these odd things that happened, and, you know, which may or may not reoccur. That'll help us in kind of thinking about the quarter, or the year. Last question is, in terms of Aurika Nehru Place, did you increase the number of rooms by about 50? And, does that change the CapEx number that you'd originally given? Okay, so let's start with GST. The number I gave for GST was based on H1, our assessment of H1, because GST became operational on twenty-third September. Yes. So we worked backwards and said, "This is the maximum impact." As it happened, fortunately, our prices did go up because the price impact started from October, but played out through till January, because some of our prices are what are called RFP prices, and that changes on a calendar basis. So we are giving the best. You know, we can look at the impact of GST and say it will be about 2% next year, based on just what do we expect to do in revenue terms, and how much of that revenue will be above INR 7,500. So it's a, it's an approximate figure, but we think it's pretty accurate. Okay, so that was the first point. Point two is how do I see the next two or three quarters? This quarter is a good quarter. It started slowish, but February is looking very positive. I think my best guess is that all the listed players will report the same thing, which was January was sluggish, February is great. I myself am amazed to read this article today about some luxury hotels charging rooms in INR lakhs. I don't think, I think it's a bit of a, you know, a headline number. I don't think it's true, really, across the board. But February is very good, and March also looks excellent for us. So I would hope that we do better in growth than we did in Q3. That is nearly certain. How much of that will be impacted by what happens in Gurugram? Gurugram is still, frankly, a work in progress, because we have to find a replacement for the very large groups that we had in Q3 and Q4 last year in Gurugram, in the Lemon Tree and Red Fox portfolio. We also have a 150-room Red Fox there, which is doing significant... underperforming significantly versus last year, for the same reason. Third is, what was the third question, actually? Sorry, could you repeat the third question? The Aurika Nehru Place. Seems like the number of rooms increased by 50. So you know, that was our best guess case when we first informed. That's why we said 500+, Sumit. Now that we've got our architects, architects are SRSS out of Singapore. They've done the Aurika Mumbai. They also work, I think, with the Marriotts in India. So they have now done a broad massing, which is the pictorial we have put in our investor presentation. In fact, the lead, the principal architect, is coming to meet us next week. And based on the early drawings and the options they sent us, we looked at you know, it from a slightly space optimization perspective. And it turns out that we wanted a very large convention center, which we managed to get. I think the main banquet is like 14,000-15,000 sq ft. We wanted, obviously, not as many suites as they recommended. They recommended something like 50 suites. We reduced it significantly. So we think we'll cross, I think, 550 or maybe even 560 rooms in this. There is no change in cost, because it is the same built-up space, which is 370,000 sq ft, approximately. Got it. One final question. I know last call you had mentioned Gurugram and Bengaluru as the two properties which are being renovated. So, Gurugram, I guess we know why the RevPAR was down. In the case of Bengaluru, why... Any thoughts on the occupancy side? I know you had great ADRs over there, but the occupancy was lower. Was it because this is, you've grown, you're just repricing it higher and hoping that that price will you'll be able to maintain that price? ... No, actually, you know, it's interesting. Sumit, we shut different parts of our portfolio in the last two years for accelerated renovation. So if you look at, for example, our operational performance by region, you will find that Delhi, in spite of the fact that we closed 100 rooms in Delhi, we managed to do it in bunches. It's also a function of floor plate, by the way. So these hotels had a very large floor plate, so each floor had 100 rooms. So we could shut one floor and renovate it and fill the balance. Now, if you look at Bengaluru, these are tall buildings, and it's very peculiar. Since you mentioned it, I will explain that the floor plate has much fewer rooms. It has 20, 30 rooms, so we don't shut one floor. Then we shut, like, four or five floors, and we've allocated more resources in Bengaluru this year. Our earlier focus was on Delhi and Hyderabad because those were showing the most promise, and that is why you will find that, you know, our Hyderabad portfolio, the ARR really went up because it was fully renovated, more or less. Delhi was already on a very high base, so if you notice, it's still gone up significantly, though it includes a low rate Red Fox East Delhi, which is due for a renovation now. Bangalore, we had to we actually shut a heck of a lot of rooms in Bangalore, especially the Keys rooms, which is. So a lot of Bangalore, 874 rooms, nearly half of them are Keys rooms. And, we were renovating them left, right, and center. Even right now, we are renovating them because our view is we take the short-term pain. So it's a mix of many things. It's a lot of noise. You know, guests get upset because we are banging and breaking, because these are full-scale renovations. But bear with us, I think by next year, as I said, when we finish this renovation, you will see a massive improvement in performance in all these, including Keys. Keys, I mean, you haven't seen anything. Keys is showing 25%, I'm very dissatisfied. I think Keys should show 50% growth in RevPAR. And I have said earlier that the average daily rate should be equal to at least Red Fox. So to me, it is still 12% short. Though we've grown the rate by 19%, Red Fox has also grown, and we intend to take Keys up to Red Fox. Got it. Thank you very much. Thank you. The next question comes from the line of Rahul Jain from PhillipCapital. Please go ahead. Good afternoon, sir. So my first question is basically on the strategy that you mentioned earlier in Mumbai is right now more occupancy-led. So how do you expect this to transition to a more ARR-led strategy? Is there a timeline or a threshold level that you'd like to reach before you switch to an ARR-led strategy in this market? So, you know, the question is really in, in Bombay is we've got a large base of crew. So let me bring it to the crux. We took this large base of crew, though we've reduced it quite significantly. In fact, when we started it, it was about 100 rooms more than what it is today, so we have managed to replace it. But crew is the lowest rate, but the steadiest business. So our intention is very simple, that once we build all the various segments that are supposed to fire to provide room nights, then we will reprice all segments. Because our ability to churn the portfolio, churn the mix improves significantly. So really, in Bombay, our strategy, because of the very large inventory, was fill the hotel. First, get base so that you cover your costs, then start getting additional customers, and then over time, keep increasing the prices as you are able to replace the customers with newer, higher-paying guests. So that is the process. Normally, in a 250-300-room hotel, we'd have achieved it in 1-1.5 years, but this is more than double that size. It's 670 rooms, so it's an ongoing journey. I'm pretty sure, like I have seen, that there is a material improvement in ARR in Aurika, Mumbai in this quarter, because as you can see, we achieved, you know, a 79% occupancy means really that, you know, we are close to where we can start repricing. And you'll see some medium-sized impact in it in Q4. Hopefully next year you will see a very significant impact. Understood, sir. So my second question is on the Pune market. We've seen a very healthy, RevPAR growth in this market as well for the quarter. Any specific reason on, why we are seeing a healthy growth, or is it more macro-led or a one-off for this quarter? No, I think, there are two reasons. One is, Pune, out of the 426 rooms, 25% is the Keys Prima, which went through a 25%-30% hike in RevPAR, so that is one impact. Then Keys, then Lemon Tree Premier Pune has also stabilized, so it's performing nicely. Hinjawadi was a market which was very good when we opened this hotel 20 years ago, but today has become completely oversupplied. But fortunately, the supply has started getting absorbed, and we had taken advantage, in, in Pune of the, the drop in demand in Hinjawadi by starting to renovate that portfolio. So I think about 80% of Hinjawadi is also renovated, or 70%, and now you will start seeing the outcome. So Pune is in fact an interesting example of, you know, a nearly fully renovated portfolio. ... Got it. And so my last question is on the managed pipeline. We currently sit on a 9,400 pipeline for on the managed and the franchisee side. How much of this pipeline can be operationalized in the next year or two? Just a ballpark figure, if you can give. Your guess is as good as mine. We have given some numbers. What are the numbers we have given for next year? Roughly how many rooms do we expect to open? Around 1,000. So this is a guess, Rahul, because, you know, things flip from one quarter to the other, because so much of it is not in our control. But based on our best guess, by the end of next financial year, we should have opened another, I don't know, 1,200-1,500 more rooms. Because we are actually opening rooms which we signed three years ago, okay, after COVID. So, you know, lots of things changed. Those owners have their own, allocations of capital. Sometimes they delay investing in the hotels that they have promised they will open. So you assume 1,500 rooms. What we opened in these nine months, assume a similar number in the next, next year. Understood, sir. Thank you for your answer. Thank you. Thank you. Your next question comes from the line of Shruti Khopade from Yadnya Investment Academy. Please go ahead. Thank you for giving opportunity. I just want one clarification regarding the occupancy rate. I know you already mentioned about Gurugram and Bengaluru region. I just wanted to ask about Hyderabad also, because there I also I can see YoY decreasing occupancy rates, so it will be helpful to get clarification on that. So Hyderabad is a very interesting example of the earlier question I was answering. If you noticed, Hyderabad last year had 80% occupancy. It was the second highest occupancy after Delhi. And we decided, right, and Hyderabad had no supply coming in, interestingly. So we decided to reprice aggressively, and I think Hyderabad, we took the price of 25%. Is it him? Yeah. So Hyderabad, across all four hotels, the average rate became the second highest after Mumbai. We took it up 25%. So the highest rate hike was Hyderabad. As a result, there was a churn, and so 80% became 77%. But this, we have obviously done this with a view that we will catch up. So Hyderabad has been repriced. The occupancy has come down marginally, but we are confident we'll be able to catch up. That's why you see the highest RevPAR growth is in Hyderabad. Okay. It will be fair to say, in next few years, there will be aggressive growth in this off- Yeah, we keep increasing the price. Okay. No, no, we keep increasing the price. You will find. Okay. I think other questions are asked, so I'll take back. Thank you so much. Thank you. Thank you. The next question comes from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah, thank you for the opportunity. Sir, how has this quarter been till date? And based on business on books, how is the remainder of the quarter looking like? So as I said earlier, Prashant, that the first month was a little sluggish, but we've caught up. I think we are expecting February and March to be. We are very bullish on it. And I think you'd be... It'll be a good outcome. I don't want to give specific guidance, but I can say it will be a good outcome. Right. Sir, Aurika, when are we planning to start it within FY 2028? I think it will be somewhere in the middle of calendar 2027. I think second half, Q3 of 2027. Yeah. Calendar 2027. Right. How much is the investment in it? Totally, it will be, I expect, about INR 200 crore. But you know, we have a very interesting deal there. We can borrow 70% of that money at a rate which is 5% lower than our cost of debt, which means we will basically be borrowing INR 140 crore at 3% or 2.5%. That's the deal. Number two, we will be entitled to keep GST for the next, I think, 9 years or 15 years. Kapil? Nine years. Next 9 years, the state share of GST, we will keep ourselves. Mm. That's an incentive given to us. So all in all, it will be a very, very profitable investment from an asset perspective. We've looked at currently the performance. I think there is a Marriott there and a Taj there. And this Aurika will also compete with them. It is fantastically located. It is directly opposite the Chief Minister's house. And we think it will be an outstanding performer once we operationalize it next year. Right. Okay, sir. That's it from my side. Thank you. The next question comes from the line of Ashish Kumar from Infinity Alternatives. Please go ahead. Hi. Thanks a lot for taking my question. There was one request which we had, and one clarification. Now that we have decided on the state of the two businesses, what might be helpful is if we can add pro forma financials for both of the assets as they look like, so that while we are waiting for the listing, we do get a good sense of what the numbers are looking like. ... So the scheme is effective. Ashish, the scheme is effective from first of April. Yeah, but- From next quarter- Right. We will start reflecting both of them as two independent companies, pro forma. Okay. But effectively, if you have pronounced, you could, if you can maybe guide us to what those numbers look like for this quarter, or maybe subsequent to the call, we can get that bit. Second question was, as far as Fleur is concerned, when you're showing the fee income, this is actually what we are earning from the existing Fleur hotels. So it's more a clarification. So the new hotels that are being transferred or proposed to be transferred in this scheme, is the fee income of that also included in the fee income from Fleur hotels, or that's not, that will be additional? No, no, that's not, that's not included. That's not included. That is in Lemon Tree standalone. It will be included from next year. Okay. No, I'm just looking at pro- from pro forma perspective. So would it be fair to assume a similar percentage as what we get as a percentage of Fleur revenues as, as incremental fees revenues? I'm just trying to- Yes, it will be identical. Identical. I just, yeah, no, there's a fixed and a variable component, so I'm, I'm, net of that, I'm saying. So I'm just trying to understand. It will be the same. Actually, management fee income of Fleur will start shooting when we start. One of the big contributors is Aurika Mumbai, and it is still, in my opinion, doing 75% of what it should be doing in terms of RevPAR. So I'm expecting that it will have a significant impact once it stabilizes. Number two is that the Lemon Tree portfolio is an older portfolio of fully stable hotels. Though they are, you know, not in similar markets, they are in secondary markets, but the fee income will be, in terms of percentage terms, identical. Sure. Okay. Thanks a lot, and wish you all the best. Thank you. Thank you. The next question comes from the line of. Nikhil from Kizuna Wealth. Please go ahead. Hi, sir. Thank you for giving me the opportunity. Sir, I just wanted to ask, when you are saying that you are targeting greenfield and brownfield acquisition targets, so- Sorry to interrupt, Nikhil, sir, your voice is sounding muffled. If you're using any other mode apart from handset, may I request you use the handset, please? Yes. Am I audible now? This is slightly better. Better. Yes, sir. So I just wanted to ask, like, when we're targeting greenfield, brownfield expansion or acquisition targets, so in which micro markets are we going to target those, acquisition or expansion? So that is my first question, sir. Well, I'm traveling, for example, immediately after this call to Mumbai. We are looking at a couple of hotel sites there. Then we are going to Pune, then we'll be looking at Bengaluru, near the airport. So we have identified key markets which have deep demand, which we feel would, where we would have a competitive advantage, and we are looking to, you know, some land acquisition. There are a couple of operating assets, and then we are looking at certain other markets where we think, which are, which are where we will significantly benefit by deploying capital. That is under some form of NDA. I don't want to get into it, but, those are large opportunities. Okay. Those are operating assets. Yes, sir. So is it practical, like we can go ahead and see acquisitions like in Varanasi that we did, and where there's a leisure type of portfolio that we will build around somewhere, something like that? Yes and no. Actually, you know, right now, the opportunities we are looking at are not so much leisure, right now, other than the Aurika in Varanasi. The rest of them are more focused on deep demand markets in generally large cities. Thank you, sir. That's great to hear, sir. Now, sir, on the last question that I have, is in course of renovation, one of the concern portfolio, like we have seen a great impressive ADR growth in Keys Hotels. So what kind of ADR growth and occupancy ramp up are we looking at post your renovation, like in, let's say, FY 2028? We are simply looking at a INR 60 crore EBITDA. Okay, sir. Thank you, sir. That's it from my side, and I wish all the very best. Thank you. Thank you. The next question comes from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, hi, Parthot. So my question is, when we talk about FY 2027, the normal industry ARR growth, compared to Lemon Tree. So, do you think, Lemon Tree, overall renovation of the product, the new product, the higher value product launches, okay, and the benefit of GST in FY 2027 will have outperformance versus industry in ARR, growth side? And can you quantify the, how much outperformance we can do that? I don't want to... Again, this is guidance, Sumant. So I would say broadly, that we would be really looking at at least a 15% revenue growth, with our existing portfolio. And, beyond that, well, it may or may not happen, but 15 is something we are pretty sure we'll achieve. ... Okay. And, considering, over the year, we have seen the MICE activity in India is increasing. And, say, when you compare FY 2025 and FY 2026, and the level of MICE activity because of increasing business activity in India is increasing significantly, versus other countries. So how do you see the MICE business contribution to overall indust-, hotel industry and for Lemon Tree is going to have a better pie, in next, couple of years? Yes, we definitely see that. So our earlier hotels, our first, say, 20-25 hotels, were not built to focus on MICE, frankly. But the last many hotels that we have built have much larger banquet halls. And like I mentioned, even Aurika Nehru Place will have an enormous convention facility, just like Aurika Mumbai has. So as we you know, as we see new segments growing in India, we ourselves are redesigning our hotels to capitalize on them. And I have no doubt that MICE, as a segment, will become increasingly important for the Indian hotel industry and, of course, for Lemon Tree. Okay. Thank you. Thank you, sir. Thank you. Thank you. The next question comes from the line of Shashi Ranjan from Anand Rathi. Please go ahead. Thank you for the opportunity, and congratulations for the good set of work that you are expecting, Kapil, Patu. Just, as Lemon Tree has like a very renowned brand among the Indians, what are plans for international destinations, especially where most of the Indians are, you know, buying properties, especially Dubai? I understand that Dubai, we have some property. Are we going to expand there more aggressively? Hundred percent. Can we- Sooner rather than later. Okay. So by when we are—I mean, I understand with the CapEx and the renovation, everything going on, we are focused more on India. So by when we can start, grabbing more, space in international markets? Okay, so let me go back for a moment. See, at different times of our journey as a company, we are now two decades old. We have found sometimes we have grown faster than our customer base, and sometimes our customer base has grown faster than our assets. So right now, we are actually fairly well positioned. We've kind of relaunched our loyalty program. We've massively improved our distribution. So this is, this was all work in progress. A large part of it was technology, and a large part of it was talent, and we've been putting these building blocks together. And we now feel we are at a point where our brand is exportable, which is that it has high recognition, trust, and desirability for the mid to upper mid-market Indians traveling globally. So we have looked at multiple markets where Indians go, and we feel now we have the ability to go into those markets with a moat, which means that any owner who signs with us, or even if we ourselves deploy capital, we will be able to have a asymmetric edge, some arbitrage. So this is very much on our. And we are only interested in capturing more and more wallet share of Indian travelers. I was interested to read today that MakeMyTrip has announced something called Loved by Indians. So MakeMyTrip has started some label called Loved by Indians, and they are focusing increasingly on international travel by Indian travelers. And we are very sure we'll get that even if we export our brand internationally, and we have every intention of doing so, but with a singular focus on following Indians where they go. Thank you for the enlightenment, sir. That's done from my side. Thank you. Thank you. Thank you. The next follow-up question comes from the line of Achal Kumar from HSBC. Please go ahead. Mr. Achal Kumar, your line is unmuted. Please proceed with your question. Sorry, I think I was on mute. Sorry, just last two questions, and thanks for giving another opportunity. So first one, is this AI conference happening in Delhi, what kind of benefit do you see from that? And secondly, just wanted your thoughts on the cyclicality, you know, given that this upcycle looks very strong, do you think we are sort of closer to the peak, or do you think we are still very far from the peak? Thanks. Okay. So, the first question was AI Summit at Bharat Mandapam. The beneficiaries will be hotels nearby. It will be in the Oberoi, certainly, which is the closest, followed by Taj Mansingh, followed by a bunch of other hotels in Connaught Place and so on. We will be indirect beneficiaries in the sense that the pricing there has gone up significantly, and a bunch of people who—and of course, demand. So a bunch of people who would normally have stayed in those micro markets will now obviously look at Aerocity as the alternate, where they will get much better pricing and supply availability. So we will be indirect beneficiaries. As far as, you know, the. The, what was the other question? Cycle. As far as the cycle goes, yeah, the cycle goes, Achal, I don't think it's a cycle anymore. I really feel, we are showing, seeing early signs of a structural change in demand. And a whole bunch of new customers, especially post-COVID, and these are younger customers, want to stay in branded hotels. It's quite clear to me. So, the upcycle is still actually on a pure cyclicality basis. We are nowhere near at the top of the cycle. Top of the cycle is defined when your India occupancy crosses 70%, 75%. In fact, you know, you have to hit closer 75%-80% when you can significantly reprice. We are not there, as far as I know. The reports I read say India's occupancy is still about 66%, but this is an aggregate. In certain micro markets, we've already hit top of that kind of cycle, and there is not much supply coming in. Delhi is a classic case. Bombay is another case where the cost of new assets is very, very high. So I think these markets will continue to show, and so is Hyderabad, as a matter of fact now. These markets will continue to show significant increases in RevPAR year-on-year. And if you overlay it with what I think will happen, which is a structural shift in demand, as the Indian economy grows, then I think you-- there will be a reset. So basically, there will be a, you know, some kind of a small hockey stick, where there will be a huge number of new Indians who will want to stay in hotels, in branded hotels in India. It won't be a growth of 10%-11%, it will certainly be a massive growth in 3 or 4 years. It's going to happen in the next few years, because look at airline traffic, look at new aircrafts on order. After all, they're all going to carry passengers, and those passengers are going to want to stay in hotels. Perfect. Thank you so much. Thank you. The next question comes from the line of Vaibhav Mohile from Haitong Securities. Please go ahead. Sir, thanks for the opportunity again. My quick follow-up on the potential acquisition that we are planning to do with 2,500 keys. Assuming this is a branded chain, would we be open to have additional brands in our portfolio, or would that be a rebranding that will happen across that acquired chain? That's the first question. And secondly, if you can just guide on the overall CapEx for next two, three years. And since we mentioned during the Fleur demerger call that Lemon Tree would be a net cash company, so when do you expect the entire debt repayment to happen? That's it from us. Firstly, that 2,500 rooms are multiple acquisition opportunities. Anything we acquire, we will not look at adding more brands, we will look at rebranding them, whatever be the current brand. So that's the first point. The second point is our CapEx, you know, was very significant starting from last year, this year and next year, because that is when all the renovation... The main point is the renovation happening. As far as, yeah, so, you know, our CapEx would be, this year would be, I think, about-- Well, this is OpEx. So OpEx would be over INR 100 crore, CapEx would be another INR 70 crore-INR 80 crore. So it's significant numbers, which will all shrink dramatically after FY 2027. What will happen is, in the scheme of demerger, all the assets of Lemon Tree, including its debt, will be transferred to Fleur. So Lemon Tree will immediately effectively be a debt-free company from next year. And all the fee income that it earns, which will be fairly significant, will therefore be not redeployed in capital, but will rather be available as free cash. So then, obviously, one of the things we want to come out with is what is the dividend policy of Lemon Tree going to be? How are we going to reward shareholders, so on and so forth. And that's something really the board has to decide in the next six months. But we will come out with clarity on how we are looking at the free cash flow that Lemon Tree generates, considering that the only requirement going forward will be in technology and investments in marketing, branding, and so on. And those won't be anywhere near the kind of cash we generate. So that's a call we have to take in the next six months. It's a good problem to have. Correct, sir. Perfect. Thank you so much, and all the best. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you all once again for your interest and support. We 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, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.