Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Jakhanwala, MD and CEO of SAMHI Hotels Limited. Thank you, and over to you, sir. Thank you so much. Good afternoon, ladies and gentlemen. Welcome to SAMHI Hotels' earnings call for the quarter ending December 31, 2024. I have with me today Rajat Mehra, who's a CFO, Gyana, who is EVP and Head of Investments, and Nakul Mathur, who's VP of Investments. We also have on call our investor relation advisors, Strategic Growth Advisors. We have uploaded our Q3 FY 2025 financials and presentation on the exchanges, and I hope everybody had an opportunity to go through the same. To begin with, I will request my colleague Rajat to give us a summary of our financial performance, after which I will give you a small brief on business, and then we will open the floor for Q&A. Rajat, over to you. Thank you, Ashish, and good afternoon, everyone. It gives me immense pleasure to announce SAMHI's financial performance for the quarter ending December 31, 2024. Starting off, I would like to point out that this is the first quarter when both the current quarter and year-on-year comparable quarters have full consolidation of ACIC portfolio, given the August 2023 acquisition date. Our asset income, which captured the revenue generated from our hotels, stood at INR 296 crore, registering a year-on-year growth of 10% as compared to the same quarter last year. This growth is driven by same-store assets delivering a strong RevPAR growth of 15% year-on-year. The ACIC portfolio has muted revenue growth, as we have currently focused on completing the transition from franchise to managed, coupled with fixing the cost structure. With those initiatives completed, our focus for ACIC portfolio now shall solely be towards increased market penetration and revenue growth during financial year 2026. Our asset EBITDA, which captures hotel-level profitability, stood at INR 122 crore for the current quarter, registering a year-on-year growth of 13% as compared to the same quarter last year. Asset EBITDA margins stood at 41.2%, demonstrating a 90 basis points year-on-year improvement. ACIC portfolio margins stand now at 39.4% for the quarter, which should move towards 40% or so going forward in Q4 financial year 2025. We have seen material reduction in net corporate G&A and ESOP expense, both at INR 4.4 crores each. On the basis of this, I'm happy to report that our reported consolidated EBITDA stood at INR 113 crores for the current quarter, registering a 25% year-on-year growth as compared to the same quarter last year. Consolidated margins too have reached 37.9%, with headroom for further margin extension going forward. Depreciation expense has been stable at INR 29 crores. We have one of our three IPO high-cost loans during the quarter, which has been refinanced and could result in an annual saving of INR 16 crores. However, this comes with a non-cash accounting entry related to the write-off of the upfront fee paid prior to the takeover of the loan. This has inflated our reported finance cost by 6.5 crores to 62 crores. All in, our reported tax stood at INR 23 crores. Adjusted to non-cash finance cost entry, our tax would have been circa INR 30 crores. From a capital structure perspective, our net debt as of December 31, 2024, stood at about INR 2,060 crores, with a cost of debt of 9.4%. The quarter-on-quarter increase in net debt on account of growth CapEx that we have incurred for the acquisition of the Trinity Hotel in Bengaluru, Holiday Inn Express additional rooms, and W Hotel development. Our operating assets are now at a trailing 12-month net debt to EBITDA of 4.3x after adjusting to the growth CapEx that has been incurred. With that, I shall now request Ashish to take us through the markets and the business update. Thank you, Rajat. As Rajat mentioned, we witnessed a fairly strong 15% RevPAR growth for same-store assets. This was a result of continued demand from an expanding office market across our key cities and a record passenger movement of 77 million passengers during the last quarter. New hotel supply continues to remain very low in key cities and creates a perfect environment for RevPAR growth. Bangalore and Hyderabad, two of our key markets and also the markets where we are adding new inventory, continue to see robust office space growth and a strong increase in airline passengers. The amount of investment and interest that the tech sector is getting, alongside Global Capability Center, will continue to boost demand in these cities. Bangalore benefits from a very large space, and while Hyderabad, we still have phenomenal infrastructure in place. As we see continued revenue growth, we remain focused on leveraging it to improve our EBITDA margins. As Rajat mentioned, at the asset level, the delivered EBITDA margins are 41.2%. Within that, the same-store assets achieved an EBITDA margin of 42.2%. ACIC is almost touching about 40%. As discussed in past calls, we are working on a few fronts to deliver strong growth in addition to what we expect from our same-store assets. And I think the first part of that is pretty transformational, in which we are changing the whole portfolio construct, where the upper-upscale and upscale hotel portfolio, through various steps, will double in inventory from about 1,000 current rooms to over 2,000 rooms. It is important to note that this segment of hotels operates at a much higher revenue per room as compared to our current portfolio average. This increase in inventory is happening via the following: work has started to add 54 rooms in Sheraton Hyderabad, and 22 rooms in Hyatt Regency Pune. These shall be completed in FY 2026, and since these are part of existing operating hotels, this stabilization timeline shall be very rapid. Next, we are repositioning two of the upper-mid-scale ACIC assets in Pune and Jaipur, adding to about 330 rooms into a Courtyard by Marriott and the second hotel in the portfolio by Marriott. The 217-room Courtyard in Pune will therefore be the second Courtyard in our portfolio, following the hugely successful Courtyard by Marriott in Bengaluru on Sarjapur Road. The W Hotel in HITEC City, Hyderabad, and the Westin Tribute Portfolio hotel in Bengaluru, Whitefield, will together add about 530 rooms in key and high-performing micro-markets. We have witnessed both of these micro-markets, which are HITEC City and Whitefield, perform very strong over the past few quarters. In our upper-mid-scale portfolio, we are adding about 80 rooms to our existing Fairfield by Marriott in Chennai, Sriperumbudur. The existing 153-room hotel has seen strong performance within our portfolio, and after this expansion, that hotel would be 230 rooms. Lastly, in our mid-scale or the Holiday Inn Express portfolio, we have seen successful renovation and rebranding of the Caspia Pro Greater Noida into a Holiday Inn Express with 133 rooms. This hotel reopened in December 2024 and is gradually capturing market share within the Greater Noida precinct. The other 170-odd rooms in Kolkata and Whitefield, Bengaluru, are fully ready and waiting for final approvals, which are expected shortly. We also continue to make good progress for asset recycling, as discussed on our earlier calls, and this will help us reallocate our capital for both better margins and improved properties. I would request participants to access our quarter 3 FY 2025 investor presentation that has been uploaded to view some of the images of the growth projects we are working on. This will give you a good idea on how we are transforming our portfolio and its impact on the financial outlook. With this, I shall open the floor for Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Karan Khanna from Ambit Capital. Please go ahead. Thanks for the opportunity, and congrats to Ashish's team on another quarter of operational turnaround. So Ashish, my first question is on the broader markets. We've seen about three or four years of very strong performance on the luxury hotel rooms. Increasingly, do you think that the next two to three years will possibly see the mid-scale and the upscale segment doing potentially better than the luxury segment? And in that context, how do you think about potential RevPAR outperformance for your portfolio compared to, let's say, the luxury hotel rooms in the next two to three years? Thanks, Karan. You're absolutely right. We've now seen, I guess, about eight to nine quarters of strong performance. The early indicators for the current quarter continue to indicate pretty strong growth on a year-on-year basis. We think the occupancy levels are now mid-70s in several markets touching high 70s. If you were to break that within day-of-the-week occupancy, we're seeing weekdays doing anywhere between 80%-90% occupancy levels in some of our key markets and hotels. And therefore, that really leaves the room for rate growth. I think in terms of segment performance, Karan, we feel that for the next several quarters, all segments will continue to perform well. Having said that, we believe that the inventory position that we have created in Bangalore and Hyderabad and the future supply that we are bringing through the W in Hyderabad, the Westin Tribute in Bangalore, I think that will have a substantial impact on how SAMHI's performance turns around over the next few quarters and years because these are undisputedly some of the best-performing markets, not just in terms of hotel performance, also in terms of office absorption and airline growth, so I think our excitement is stemming from the fact that we've secured the right growth pipeline in cities which are fairly well-poised for continued RevPAR growth. You will see the impact of that starting this year when we add rooms to, let's say, Sheraton Hyderabad next year when we start, and the next year, I'm saying FY 2027, when we start seeing the opening of W in Hitec City, Hyderabad, and then, of course, beyond that, the Westin in Bangalore. Sure. This is helpful, Ashish. My second question pertains to your net debt. So we've seen about almost INR 2 billion increase this quarter, and your net leverage is at about INR 21 billion, which is your peak net debt guidance as well. Do you still maintain the 4.5x net debt EBITDA for FY 2025 and 3.5x for FY 2026? And as a follow-up, do you also see any potential asset recycling opportunities materializing soon, in which case the leverage or the net debt EBITDA potentially could be at a lower level? So, Karan, first, just to be clear, you are absolutely right. We have the peak leverage levels right now because we've already accounted for the CapEx we've spent on Bangalore acquisition and Hyderabad. Now, starting quarter four, all of the CapEx that we're incurring in development of these assets is coming from our internal accruals and free cash. With that, we remain fairly confident of achieving the 4.5 x net debt EBITDA on a reported basis end of the current fiscal year. And then subsequently, because our EBITDA growth is pretty substantial, we expect that to quickly de-lever to that 3.5 net debt EBITDA level. So we are absolutely on track. And to add to that, I did make a comment, Karan, that we are making good progress on asset recycling. We believe that as we start that program, that will obviously further assist our ability to further accelerate the deleveraging, which means that the path to that 3.5 x would be slightly quicker based on the success of that asset recycling, and we are making good progress so far. Sure. My third and last question. You've rebranded Caspia Pro in Greater Noida to Holiday Inn Express. So if you can talk a bit about how has been the change in terms of the ADR RevPAR since last week of December when you rebranded this into a Holiday Inn Express? Karan, the Holiday Inn Express Greater Noida opened in December 2024, so it's just been just about a month. Just give me a second. I'm just looking at the performance data. This hotel used to operate at a rate of about INR 2,300. Early numbers, and that's because it's just the first few days. The hotel is currently trading month-to-date at about INR 5,600. We have seen a 2x growth, but word of caution, quarter four is undoubtedly the best quarter, at least our company tends to see because of how business travel stacks up in this current quarter. I am not guiding people to think that Holiday Inn Express Greater Noida will sell at INR 5,600, but it's just that it has transformed into a 2x change with renovation and rebranding. Sure. This is helpful, Ashish. Thank you and all the best. Thank you. Thank you. Ladies and gentlemen, in order that the management is able to address questions from all participants in the queue, we request you to please restrict your questions to two per participant. You may rejoin the queue for follow-up questions. We have the next question from the line of Pradyumna Choudhary from JM Financial Family Office. Please go ahead. Yeah. Hi, Ashish. Congratulations on a good set of numbers. I just wanted to understand a bit more on the ACIC side, what has been the revenue growth you spoke about, muted RevPAR growth over there. So that means it's been absolutely flat. And second would be what really was happening in terms of you spoke about transition and all, but on the ground, what really was happening, which actually prevented us from growing on the ACIC portfolio given the strong tailwinds across the hotels that we are currently seeing? So, Karan, thank you for your question. So let me first assure you what we are seeing is a part of the plan and not either a surprise or disappointment. So just to give you numbers, during the quarter that we just reported, the total income in ACIC remained flat vis-à-vis the same quarter last year, but the EBITDA margin expanded by about actually, the growth in EBITDA was about 10% with a margin expansion of 300 basis points. So what had happened was that till about October, November, this asset was franchised, and in November, they transitioned to Marriott managed. All the efforts towards restructuring the organization, change in food and beverage have now been implemented, and that's why even on a flat revenue, we have delivered almost a 10% EBITDA growth. The second thing which happened, Pradyumna, and this is very standard when you transform a hotel from franchise to managed, is you tend to drop a lot of business which is low-rated and not high-margin. The first thing one needs to do is to free up the bandwidth to secure the high-rated, high-margin business, but the first step has to be to lose and let go of the low-rated, low-margin business. That has happened in the last quarter. You will see the revenue growth coming into this portfolio starting the current quarter because now all of that cleanup has happened. A lot of low-rated accounts have been now flushed out of the system. It's a part of the plan. It is delivering us margin expansion, EBITDA growth, and starting quarter four, as we start seeing revenue growth coming into this portfolio, you will then see a significant flow-through impact onto the bottom line. Understood. And just to follow up there, so the muted revenue growth was on account of lower occupancies or lower muted ARR growth, or was it a combination of both? Actually, if you ask me, pretty much the same. Both are flat, and so is the F&B income also, right? So it's actually when I'm looking at the data here, we are seeing occupancy remain flat. The rate also kind of remained flat, and F&B income was exactly the same, INR 13.2 crores, INR 13.2 crores for the quarter. So overall metrics were kept flat, but the EBITDA went from INR 19 crores to INR 21 crores. All right. And my last question is regarding the CapEx plan for FY 2026 and FY 2027. If you could just give the broad numbers, that would be really helpful. Yeah, so FY 2025, we have made a lot of investment. In the current quarter, we only expect about 20-odd crores of capital expenditure, which is quarter four. For the next fiscal year, we have approximately INR 200 crores of capital expenditure, of which about INR 50 crores will go towards the new rooms opening in Sheraton and Hyderabad. And the good news is that that capital expenditure brings immediate profits because these are existing operating hotels, and then the balance, about INR 125-INR 140 crores, is between the W Hyderabad and the Tribute and Westin Bangalore, and IHG. Oh, and FY 2027 plans you have or that's too early, right? About INR 150 crores a year for FY 2027, FY 2028 for us to be able to deliver the Westin in Bangalore in FY 2029 as we have indicated. So for both FY 2027 and FY 2028, you expect about INR 150 crores annualized capital expenditure. All right. All right. Thank you, and all the very best. Thank you so much. Thank you. We have the next question from the line of Jinesh Joshi from PL Capital. Please go ahead. Thanks for the opportunity. So just one observation from my side. Our same-store RevPAR growth is about 15%, but our revenue growth is 11%, which perhaps indicates that the F&B revenue growth in this quarter was a bit subpar. Now, given in this quarter, the month revenue typically tends to be higher given the concentration of wedding dates. Any reason why the F&B revenue growth was lagging this time around? And also in this context, how should we think about F&B growth going ahead? Yeah. So I think a very good question. So I'll just further break it. So first of all, absolutely yes. RevPAR growth of 15% resulting in a total revenue growth of 11% means lower than 15%, lower than 11% F&B growth. So we have seen F&B grow at about 5% on a year-on-year basis. Now, within that, what is interesting is that we've seen the venue revenue, which is what you're referring to, the meeting spaces, the ballrooms, and all of that, has actually grown at 13% year-on-year. So you've seen reasonable growth in the MICE or the event-related business. It is the specialty restaurants, the outlet income, which has remained almost flat, right? So we have seen some sort of flattening of revenues in the outlet revenues. I cannot really necessarily. I think it's too early to blame external factors. Give us a quarter or so. We are reviewing internally both our pricing, product, probably some marketing efforts that we need to make in three or four specialty restaurants that we have. Our total F&B contribution is just about 25%, 26%. It's not very substantial, but we see opportunities to improve the outlet revenues because we don't really see a problem per se, as you mentioned, in the overall month or the event revenue. Got that. And sir, in the opening comments, you also mentioned that the ACIC portfolio is expected to shift from the franchisee route to the management contract route in November. So with the shift happening, what kind of RevPAR growth are you expecting given the fact that in the nine months, your number on the ACIC side was relatively flattish? I think the main focus now has been, so first of all, the whole transition has been completed. All the organization changes that needed to be made, I would believe 90% of those changes have been fully completed so far. The focus therefore now is completely repricing the asset. Our expectation is that from current quarter, you'll start seeing the RevPAR growth coming into, actually, the rate growth coming into the ACIC portfolio. Occupancies are at 72%, 73%, so they are pretty stable and good. You will see a churn of the rate mix, and I think in FY 2026, you should expect 9%-11% total revenue growth in ACIC. Sure. And the last question from my side. And the margin rejig exercise in ACIC, is it fully complete, or do you think that further elements in terms of cost rejig are yet to be pending, which can lead to further improvement in margins? Because I believe this 9%-11% RevPAR growth, the flow-through to EBITDA will be there from this element, but anything from the cost side, which can lead to an improvement in the margin, is what I want to understand. Oh, so I think on cost, we have, so whatever you're seeing with flat revenue, we've got the margins up from almost 32% to 40% now. Going forward, the margin expansion will really be a result of flow-throughs from incremental revenue. So first of all, we do definitely see the margins in ACIC portfolio across 40% remain there for an annualized basis. You'll always see quarter one, quarter two being slightly lower, but I think on a full-year basis, you'll see ACIC definitely across 40% +. But that movement from, let's say, 39% for the quarter or for the last year, let's say 36%, 37% to 40% is now going to be largely a factor of flow-through of incremental revenues. Got that. Thank you, sir. Thank you. Thank you. The next question comes from the line of Abhishek Khandelwal from Kotak Securities. Please go ahead. Mr. Abhishek Khandelwal, your line has been unmuted. Am I audible? Yes, you are audible. Yes. Hi, Ashish. I just wanted to check. I understand that Caspia Delhi is going for renovation starting January, as you mentioned in the presentation. Could you share what was the contribution to earnings in terms of, let's say, the revenue or EBITDA for this hotel annually, if any? 1 crore. That's it. Negligible. Got it. And when do you expect to complete this renovation? Broadly, a year or so? Yeah. That's about a year. Our Fairfield portfolio today, Abhishek, delivers us an EBITDA and a core Fairfield portfolio. Fairfield portfolio will be around INR 12 lakhs. EBITDA per key? So our Fairfield portfolio does an EBITDA per key of about 10-12 lakhs. We do expect this hotel to kind of be positioned on the lower end of that, so I would say closer to the 9, 10 lakhs per EBITDA per key. Effectively, Abhishek, this hotel was being kept operational because of licensing issues, and that's why the EBITDA was just about INR 1 crore as we renovate this hotel. And it's a pretty quick, light renovation to Fairfield. We do expect the contribution from these 140 rooms to be materially different to what we've seen in the past. It's an FY 2022. Got it. The second on slide 10 of your presentation, where you've given the waterfall from the asset income and the asset EBITDA CQ24 to CQ25, it says the acquisition contribution is INR 56 million. Does that include ACIC and Trinity both? Isn't that too less? The EBITDA contribution is INR 4 crore? You've mentioned in the notes that it is ACIC plus Trinity. Is it both of them or just Trinity? Because ACIC, we will take two same stores starting 1st April. 1st April. Yeah. So once we complete the fiscal year for just the sanctity of the numbers, from 1st April or 1st quarter of FY 2026, ACIC will be kind of included in the same store. Since that touchpoint, ACIC and Trinity both are adding up to that acquisition impact. Does that mean 960 keys plus 140 keys of Trinity were generating INR 6 crores of quarterly revenue and INR 4 crores of quarterly EBITDA? Additional. Okay. You should be right. ACIC remains flat, and therefore, a large amount of incremental revenue that you're seeing is actually from Trinity. You're saying the first bar, which is 2,692 for asset income, includes part of the ACIC income in this one? That's right. That's right. Because that was reported. Absolutely. Got it, and the last question from my end, while you've given the CapEx plans for the next three years, INR 200 and INR 150 crores each for the year after that, that broadly adds up to what you've given as the planned CapEx for the Hyderabad and the Bangalore hotels. From what I remember, adding INR 150 to INR 200 crores for Hyderabad and probably INR 300 crores for Bangalore existing plus new. Is that all the CapEx that you plan to do, or there's some additional CapEx that you will do for the renovation, etc., and the addition of existing keys that you're doing on the portfolio that you already have? So Abhishek, I'll just add to what I said earlier. So if you see the total CapEx plan for Bangalore continues till FY 2029, okay? And when you're adding a whole block of rooms, a large part of that CapEx actually ends being not really back-ended, but spent towards the completion of the project and FF&E and other items, right? So the current INR 200-INR 220 crores for FY 2026, INR 150 each for FY 2027, FY 2028. And then, of course, the Westin Bangalore going into FY 2029 gives us a whole pool of capital which is required for next year, Sheraton Hyderabad, two additions. We need about INR 50 crores for that. It is required for some bit of the renovation in Caspia Delhi, for instance, is very low. It's about INR 8 lakh, INR 10 lakh per key, about INR 14 crore renovation that year, and we're charging for Caspia Delhi. The rest is basically going towards the Westin and the W. Don't forget, we already have assumed in our, of course, we don't give a guidance, but in our internal business plan, our financial statements already carry approximately INR 40-INR 50 crore of expense that we take through our P&L, and that pretty much captures all capital expenditure that is needed to be incurred in our existing operating portfolio. So in addition to the CapEx that we're setting aside outside of the P&L, our P&L always carries a significant amount of charge towards capital expenditure, both maintenance and sometimes slightly longer term, and that number will be about INR 40-INR 50 crore. Got it. So just confirming, the next two years of INR 150 crore each would also probably include some towards, let's say, expansions at Chennai and the other hotels that you do that. That's right. That's right. With the balance for Whitefield, Bengaluru being slightly there in FY 2029, is how it is? Only for Westin Bangalore. The W will be fully spent in FY 2026 and FY 2027. We're pretty much on track to open that hotel in FY 2027 right now. So W has to go through the capital expenditure through this period. The renovation of the existing hotel in Trinity is not a high amount, and that will also be done in FY 2027. 28. FY 2027, early FY 2028, and The Westin goes in FY 2029. That's in terms of staggering. Okay. Perfect. That's helpful. Thanks a lot. Thank you. Participants who are joining the question queue are requested to please restrict your questions to two per participant. Please rejoin the queue for follow-up questions. We have the next question from the line of Shubham Ajmera from SOIC. Please go ahead. Yes, sir. I just had a question that in Quarter 4, do we see our, basically, do we see our top line go reverting to 10%-15% level in Quarter 4? We are seeing pretty good business on books, Shubham, but I'd like to refrain from giving a very definitive guidance, but I can for sure say that looking at the business on books today, and we still have 60 or more days to go in the current quarter, the total revenue growth does remain higher than what we've seen for the prior quarter. Okay. Okay. Thank you, sir. And basically, second question was, when we look at the EBITDA margins of our hotel versus some of the other listed hotels, do we expect that even our EBITDA margins will start edging towards 41%-42% level? Yes. Absolutely. No doubt about it. Okay. I mean, for all the best. We don't like too much of breaking the numbers because it looks like unnecessary justification. But if you look at our upscale portfolio, which is very stable, there is no new addition, no ACIC, we actually see EBITDA margins of about 43%-44% there. And as the integrated ACIC, as some of the mid-scale hotels start to improve performance, I think the least we expect is the number that you just mentioned. Okay. Great, sir. Thank you, and all the best for the next financial year. Thank you, Shubham. Thank you. The next question is from the line of Yashovardhan Agarwal from Arthya Wealth and Investments. Please go ahead. Yes. Hello and how are you? Yes. Yes. Yes. Hello. Yes. Hi, sir. Congratulations on your successful IPO, and thanks for the opportunity. Sir, my first question is on the debt. So you just explained that how a net debt to EBITDA will look like, but in terms of actual debt, if we can talk about that, how is that net additional plan to work, and the actual debt that you are expecting by the FY 2026, 7, 8, 10? If we can talk on that. Yes. I think I only partly got your question, which is the first part, that how do we intend to reduce our debt, right? Can you repeat the second part of the question? Yes. Yes. Yashovardhan, before you ask your question again, we request you to please check the mode that you're using on handset. You do sound a little muffled. Yeah. Is it better? Okay. Hello? Please go ahead. Yes. Yes. So my question is that you have explained the net debt that we are expecting in FY 2025, 2026, and 2027 end, but can you please talk about the absolute number that you would be seeing in the year end, and what is the roadmap towards the reduction of it? Because you have just highlighted the CapEx plan. So if you can talk more on that. Absolute reduction. Absolute reduction, right? Okay. So as of today, our gross debt is about INR 2,200 crore, which has remained pretty much the same for the last several quarters. Our net debt has increased on account of utilization of cash for the acquisition in Bangalore, Hyderabad, and capital expenditure towards the opening of the holiday hotels that we have. So our gross debt has remained absolute. There could be marginal changes quarter on quarter on account of overdraft limits being drawn and deposited, so on and so forth, but largely, it's remained the same. In terms of the gross debt level, it will obviously come down on account of two factors. One is the fact that we continue to make scheduled repayments to our term loans on a yearly basis. There is a part of the cash that the business generates, which is used towards repaying the gross debt, right? The second is, of course, the fact that if you look at our current cash production being done by the company, interest expense, and capital expenditure, we expect that we will always maintain a slight surplus, which will further go towards further reducing our net debt. The last but not the least is a potential impact of an asset recycling, where when we sell an asset and all of that cash either goes towards reducing gross debt or comes as cash and the company reduces net debt, the asset recycling will further allow us to reduce the net debt, right? In terms of an absolute number of where we expect the gross or the net debt to be over the next, let's say, three years, we actually think that we'll be closer to INR 1,700, INR 1,800 crores of net debt over the next, let's say, two to three years, and that will be a factor of really the cash generation from asset recycling. So we see INR 1,700, INR 1,800 crores of net debt in the business, and this is without any, so to say, expectation of a capital raise or an external capital. Okay. So what this is, after considering the asset recycling that we are trying, right? Yeah. Some bit of asset recycling. The amount from asset recycling, as we have indicated earlier, is not very substantial, about INR 200 crores. So about INR 200 crores from asset recycling, and the balance, let's say, about INR 100, INR 150 crores is the incremental cash that the business will generate because of the efforts we are making. So that will take our net debt from INR 2,000 crores to about INR 1,700 crores. Got it. Actually, in terms of asset recycling, if you can share, how many rooms are you expected to recycle? So in terms of total rooms that we could see after next, let's say, one or two years, if our asset recycling strategy is successful, what will be the total additional number of rooms? Oh, so. Is there going to be an impact? No. So let me just. Onto assets. The assets that we are considering for asset recycling have to follow the following criteria. Number one, the contribution of EBITDA from those assets should be, I would say, lacking in the word, minuscule, and therefore they really don't impact the path that we've set for the company in terms of where it is headed in terms of revenue, EBITDA, and PAT. So these are assets that don't really contribute significantly to our current revenue or EBITDA. Second, obviously, we want to recycle capital in markets where we believe in the market, but we believe we have a better opportunity of that capital going to some other markets, right? So we expect the room count to be not substantially different, Yash. I would think that cumulative rooms across these assets that we will recycle would be perhaps 200 to 150 rooms. We're adding far more inventory in our portfolio, and the recycling is being done of assets which are in the mid-scale space, and therefore the revenue contribution is also not substantial. Got it, sir. I just have one last question. If we share the RevPAR rooms city-wise for Bangalore, Hyderabad, Pune, and Delhi? Okay. So I'll just give me a second. So we saw for the quarter ending December 31st, Hyderabad RevPAR growth was 24%, Bangalore was 20%, Pune was 17%. Yeah. That's the RevPAR growth that we've seen. We have seen some smaller markets grow disproportionately, like Visakhapatnam at 28% and Coimbatore at 31%, but I don't take those things with a pinch of salt because there is a base which is playing into those numbers, right? We started from a very low base. So my excitement continues to be about Hyderabad being at a very large base last year and yet growing at 24% RevPAR year- on -year. Same for Bangalore. Our Bangalore hotels are some of the best-performing hotels in the portfolio, and yet we saw a RevPAR growth of 20% year -on -year, and that's for same-store. No impact of acquisitions and disposals on that. Pune also remained pretty impressive at actually 17% RevPAR growth. Got it, sir, so if our RevPAR performance is in line with the industry. Please rejoin the queue for further questions. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Aditya Singh from Robo Capital. Please go ahead. Hi. Thank you for the opportunity. Sir, going to the page 18 of PPT, can you please explain to me what are the new projects or new keys that we are adding in FY 2025 and 2026? For instance, serial number two Holiday Inn Express, Kolkata, that belongs to the new opening category. That will be new keys, right? That's right. The conversion will be just a conversion from X to Y, right? Yeah. Yeah. It's a good question. Let me clarify it for you, and you just help me here, so in FY 2025, Greater Noida was a conversion. It does not change the total inventory reported by us. The Kolkata 111 rooms and the new 56 rooms in Bangalore, Whitefield, adding up to about 170 rooms is incremental inventory. FY 2026, the 54 rooms in Sheraton Hyderabad and 22 rooms in Hyatt Pune are new rooms. They are not renovated. They're actually increased in the inventory, so we see about 80 odd rooms or 76 odd rooms improving in FY 2026, then if you look at Pune, Caspia, Delhi, Four Points, Jaipur, these are all conversions, so they don't change the total inventory. The Fairfield by Marriott, Sriperumbudur, which is 86 rooms, is again an additional inventory which will add to that total count. And then, of course, the W Hyderabad, 170 rooms is a completely new hotel, and in The Westin and Tribute Portfolio of Bangalore, Whitefield, of the intended 362 rooms, 142 is existing to be rebranded, and the balance 220-odd rooms is the new inventory, so that's really, I'll take you through the entire summary of those projects where there is a conversion and where there is actually an impact on the total inventory. All right. I got my answer. Thank you. Thanks, Aditya. Thank you. We have the next question from the line of Kaushik from Pradar Capital Management. Please go ahead. Yeah. Hi, Ashish. Actually, I want a medium-term perspective. Three years out, where do you see the revenue number and the EBITDA margin number three years out? Kaushik, we'll not give a guidance on three years forward, but I do refer you to page number 17 of our presentation. If you look at how we are transforming the portfolio construct, Kaushik, right, all the answers lie therein, right? For instance, we have 1,000 rooms currently operating at 43 lakhs per key. We have 2,100 rooms operating at about 22 lakhs per key revenue, and we have about 1,500 rooms operating at about 12 lakhs per key. When you look at the portfolio construct three years forward, even if I take the same revenue per key that I get today, this demonstrates about a 35% overall revenue growth, right? If we are doing about 1,100 crores today on a trailing 12-month basis, there is about a 34%-35% embedded growth just as to how the portfolio is transforming. I'm estimating or I'm making an assumption that total revenue growth is now zero from now till then. Because that's one place where I think as a management, we kind of have our own point of view, which is that revenue growth will remain to be in high single digits to early double digits. But that calculation is based off forecasting this. But what is very certain is just the reconstruction of the portfolio has an embedded 35% revenue upside, for which, A, we don't need to acquire anything further. B, we don't need any capital debt or equity, and all of that is going to be funded through both internal efforts and internal growth. Great. Great. I'm sorry, I'm not giving you a number. No. No problem. No problem. The team has a number. Yeah. Yeah. I got the direction. And the next question is some longer-term question. So how do you see SAMHI being the operator, right, hotel operator? How do you see in the next, I mean, longer term, what is your ambition to scale number of keys or to churn more number of EBITDA? What is your vision or aspiration as a SAMHI brand? That's all I need. SAMHI, first of all, we don't chase vanity numbers like number of rooms, Kaushik. I'll be very honest. We clearly want to create a company of substance, and the substance will reflect in revenue, in operating margins because EBITDA, and also the earnings really, which is the PAT, okay, and I think where we have positioned the company today, which is a good base of hotels, substantial growth, which has already been sort of acquired over the last two years, free cash coming from the business, I'm fairly confident that we will unlock tremendous value both on P&L and also on the balance sheet, right, and what we unlock in the P&L will be reflected in terms of revenue and EBITDA, and what we unlock in the balance sheet will be obviously then float around to our PAT and net earnings, right? So we believe that in the next, let's say, five odd years, this company will be nothing of what you see today because of the internal capabilities that we have created both on growth and also on how we will continue to strengthen our balance sheet. Great. Great. But we'll be growing at 10%-12% CAGR consistently and churning higher EBITDA margin, right? That is how we'll be positioning for five odd years. Yeah. So Kaushik, again, we'll do the math. We just have to come to office in the morning, be here till 9:00 P.M., work hard, work honestly, and you have 35% growth on slide number 17 without market growing even 1%, right? If the market grow at 6%-7%, that 35% growth can easily become 50%-55% growth over the next three to four years. So that really gives you that early double-digit total revenue growth. We have so far, look at our quarter-on-quarter presentations, and we try and explain same story separate to total portfolio, but we have always delivered almost a 1.25 to 1.4 multiple of EBITDA growth over revenue growth. So which means if our revenue growth is 10%, the EBITDA growth in a bad quarter will be 12.5, 13%. In a good quarter, it will be 14%-14.5%. So we think that we have the right ingredients now to sustain that growth over the next four to five years, and as I said, without much dependencies on external environment. Good. Good. All the best, Ashish. Thanks. Thank you, Kaushik. Thank you. Ladies and gentlemen, if you wish to ask questions, you may please press star and one on your touch-tone telephones. The next question is from the line of Yash Darak from RSPN Ventures Private Limited. Please go ahead. Yash, your line has been unmuted. You may proceed with your question. Hello. Go ahead. Hello. You may proceed, sir. You are audible. Yeah. So sir, my question is, is Q3 based on the occupancy seasonally weak quarter because as we are not a business hotel and because of the holidays, corporate holidays, we see a dip in the occupancy in Q3? Yash, are you asking do we see a dip in occupancy in quarter three? Yes. Yes. Yash, we actually quarter three is probably the second best quarter for our business traditionally, quarter four being the best, and you're right. Quarter three tends to kind of be slightly lower because we have the two holiday seasons, Diwali Dussehra and Christmas New Year. So we do see some redundancies in our business hotel portfolio, which is most of our portfolio in that quarter. Whereas quarter four, once people go back to work, we tend to see pretty strong performance through that, right? But I would think the occupancies remain. If you look at last year, quarter three was 72.6% portfolio occupancy, same store, and quarter four was 77.2%. So quarter three is same as quarter one and quarter two in terms of occupancies. The rate does tend to move 10% up because on non-holiday days, you have strong demand. And in quarter four, you obviously take advantage of the fact that you have high occupancies and good rates, but you don't really get to lose that, I would say, almost three or four weeks depending on between Diwali, Dussehra, and Christmas-New Year. The Dussehra-Diwali, of course, one needs to be cautious. It follows Hindu calendar. So may sometimes be on the edge of quarter two and quarter three, sometimes squarely in quarter three. So yeah. To that extent, quarter four is always a better quarter for us than quarter three. Got it, sir. Thank you. Last question is on the bookkeeping side. If there was not this one-off cost in the interest of INR 6.5 crores, our interest would have been around INR 55 crores. Is that understanding right? Yeah. So actually, Yash, the interest was INR 55 crores. This loan that we refinanced where the pricing went down from 12% to 9.3%, from 13.5% to 9.3%, the upfront fee that we had paid to that lender two years back, that was amortized over the tenure of the loan. But because we refinanced the loan much earlier, the unamortized portion had to be taken as an expense to our P&L. So that INR 6.5 crores was a completely non-cash impact on the P&L. The actual interest expense was still about INR 55 crores. Got it. Got it. Thank you so much. Actually, interest cost is slightly lower. That's total finance cost, including some of the leasehold accounting impact which comes in our P&L finance cost. Okay. Okay. Thank you so much. Thank you, Yash. Yes. Thank you. The next question is from the line of Akshat Bairagi from Flute Aura Enterprises Private Limited. Please go ahead. Akshat, your line has been unmuted. You may proceed with your question. Mr. Akshat Bairagi, are we audible to you? As there's no response from the current participant, we will move to the next question, which will be from the line of Sunil Jain from Nirmal Bang Securities Private Limited. Please go ahead. Yeah. Thanks for taking my question. So you said that interest cost has come down. So this quarter, it was 55, so it can come down in the coming quarters? In quarter four, it should come down in the coming quarter because this quarter actually has this one-time hit. Otherwise, in general, it will also be reducing because the fact that the overall cost of borrowing also from the previous quarter has gone down. We are now at a weighted average cost of 9.4%. So our overall actual interest cost, which is serviced to the bank, not the one which is actually the P&L hit, will be certainly around about 50-odd crores, plus the other, as Ashish said, the lease expense and other things. We are looking at a reduction in what was reported as the finance cost in quarter three. Because of this, quarter four will be definitely lower. Sir, the second question about recycling. Have you identified any of the assets which you want to recycle or have done some exercise or? Yeah. So we have identified the assets. Our confidence stems from the current conversations and offers that we have, which we are obviously negotiating and doing further diligence in terms of actionability. So assets have been identified. We have a bank who's helping us with the process, and we have some degree of interest, which gives us confidence about committing to the asset recycling approach. Okay. Thank you, sir. Thank you. Thank you. The next question is from the line of Darius Trivedi from DJD Investments. Please go ahead. Good afternoon, Ashish and team, and congratulations on walking the talk as far as the numbers are concerned. I had a couple of questions. One is, are we expecting any revenue loss in FY 2027 when the Four Points, Pune, and the Caspia Delhi convert to Courtyard and Fairfield, respectively? Not really. So Caspia Delhi, of course, no impact because that hotel hardly contributed anything to our numbers, at least in terms of EBITDA. The Four Points in Pune conversion is being done on a phase-wise manner. And actually, if you see the revenue improvement that we are seeing because of the conversion to managed model, pretty much covers for the partial inventory that we'll keep taking for renovation during the year. So we really don't see any—they could be marginal, but nothing material in terms of the impact of renovations on the performance of the hotel. Understood. And what would be the EBITDA per key for the Holiday Inn portfolio for Noida, Kolkata, and Bangalore? The weighted EBITDA per key? The weighted average EBITDA per key for the Holiday Inn Express portfolio is about, what's the key? 5.2 lakhs. 5 lakhs per key. Okay. Let's break it up. Greater Noida is an average market so far in terms of performance within our portfolio. We're fairly excited that even though we are adding only 56 rooms in Bangalore, the room size there is actually significantly larger than our existing hotel. We are going to price that at a substantial premium to our existing hotel. In terms of weighted average, the impact of that 56 rooms may almost be equivalent to that of a 75-80 room hotel, right? Kolkata is a good market, especially at that price point. The overall inventory addition of 330-odd rooms should operate at or premium to the current average in terms of EBITDA per key. Okay. And as far as Sheraton Hyderabad and Hyatt Regency Pune, fair to assume roughly 20-22 lakh per key EBITDA? The mic won't come here. Around 20. Yeah. 20 lakhs per key. So Sheraton, we are very excited, Darius, because it's a market which has been doing really well. I just gave the numbers earlier where Hyderabad RevPAR growth was 24% in the last quarter. And therefore, in such a strong market with no new supply, when you immediately add about 55-odd rooms to an existing operating hotel, two things happen. A, of course, the revenue per key is pretty much the same that you get in an existing hotel. The flow-through from that revenue should be, in our opinion, upwards of 60%. Because if the existing hotel is operating at a 43%-44% EBITDA margin, then a lot of sunk cost is captured by that, and the new room should operate at a fairly high margin, right? So I thought it was very exciting adding those 55 rooms. By the way, the current quarter did see a negligible reduction in our rental income because those offices are the spaces we are converting to the additional rooms. But as I said, by September, October, we have those rooms open well in time for H2, and same for Pune, where we've seen a RevPAR growth of 17% in the last quarter. We are actually adding 22 apartments. So these are between studio, one-bedroom, two-bedroom apartments. And we actually think that they should continue; they will perform really well. So at minimum, we should expect about INR 20 lakhs per key EBITDA on those assets starting H2 at FY 2026. Got it. Got it. This means that the W, Hitec City, Hyderabad, when it opens, I think it should be much higher given that it's an upper-upscale asset. So listen, let's take some numbers for context. Our Courtyard in Bangalore, Outer Ring Road, does an EBITDA of about 31 lakhs per key. It's clearly an outperformer. It does a rate of INR 16,000, high occupancies. But what we have seen, interestingly, in our Fairfield in Hyderabad, Gachibowli, it is ramping up really quickly, trying to catch up with our Fairfield in Outer Ring Road, Bangalore, right? So it's almost a race. That Fairfield Bangalore used to be at a rate of 8.5. Fairfield Hyderabad was at a rate of 5.5. Fairfield Hyderabad has gone at a rate of 7.5. Fairfield Bangalore has gone to a rate of 9.5, right? So we actually think that Hitec City is very mature, very low vacancy, constant news of GCCs opening there. The latest news this morning was McDonald's setting up their global capability center in Hitec City, right? No new supply. I think that market with a brand like W and an operator like Marriott and the location that we have, we should expect it to deliver Courtyard level performance in the future, which is actually 30 lakhs per key. Got it. Got it. And we are expecting this to open in the second half of FY 2027. Is that understanding right? Yeah. We should get a quarter plus for FY 2027 for this hotel. Okay. Okay. Perfect. Thank you so much. Thank you and all the best. Thank you, Darius. Thank you. The next question is from the line of Shrinarayan Mishra from Baroda BNP Paribas. Please go ahead. Thank you for the opportunity. Can you hear me? Yes, we can. So my first question is, will it be possible to give the ROC breakup between the three segments? I mean, per upscale and midscale and upper upscale and upscale? Yeah. Just give us a second. So this is Nakul FY 2025. So this is ROCE or NOI? ROCE? So the upscale segment will deliver about 16-odd% ROCE. Actually, if you ask me, it's pretty similar. Actually, it's only the upper midscale. Because of ACIC, which is at about 8%-9%, the midscale is at about, and the upper upscale is about 15.5%-16%. And we actually expect upper midscale also to get to about 14%-15% once ACIC is fully, we get what we need from ACIC, including convergence and all of that. So yeah, that's the number for you right now. But one good news, and that's only just disclaimer. It's not our guidance on ROCEs. It's just how good can good be. We have one hotel in our Holiday Inn Express portfolio in Hyderabad, which is now almost getting to 50%+ ROCE, right? Now, again, I'll repeat the disclaimer. That does not mean that we are saying our portfolio will get to 50%. But often we are asking ourselves that what's the real headroom? And the way we've constructed our portfolio, Karan started with this question, midscale, upper midscale, upscale, we actually feel that if the RevPAR cycle continues, for which the data demonstrates it should continue, our cost basis is actually very, very low in part of our portfolio. Holiday Inn Express, for instance, is just about 28, 29 lakhs per key, right? We actually can see substantial transformation of the ROCE profile as you can see the flow-through goes straight to the bottom line and then impact ROCEs. So the average is around 14% to 15%. But I was just giving you what we think how good can good really be when a market at an asset hits bull's eye. Okay. So for the, I mean, most matured properties which we would have, what would be the range of ROCE there? Nakul, go to the cities. I think I'll rather take this question depending on where the city cycle is or a market cycle is. A city like Bangalore for us today, and this will not include the cities, right? A market like Bangalore today would be sitting at almost 20% + ROCE for us as a market. And we have one Courtyard, three Fairfields and Marriott, and two Holiday Inn Express hotels. So very well spread within the city and within the segment, it's about a 20%+ ROCE in that market. You would have markets like Hyderabad touching mid-teens. You would have markets like Delhi and NCR now going towards mid-teens. So you typically see a good profile. As I said, as the markets mature and start delivering a consistent RevPAR and RevPAR growth, the potential is really to cross that magical 20% number on ROCE. Okay. Thank you so much. This second question that has been from me. So I was just leading to FY 2024 annual report wherein we have highlighted that IT/ITeS has been the top contributor to revenues, and we are trying to diversify from that. But our recent properties seem to be in those areas. So how is the concentration now? And are we doing anything about that, or we are happy with that? So IT/ITeS is growing, so we want to be intentionally high concentrated in that segment. So first of all, I think we are seeing a reduced contribution from IT/ITeS sector generally across our portfolio and including in so-called high-tech cities like Bangalore and Hyderabad, right? So on a year-on-year basis, we've seen other sectors kind of contributing relatively more to what they were. It's not that the absolute business has necessarily reduced from IT/ITeS, but what's happened is that a lot of growth has come in sectors like, and that's where things get a little gray. When we talk about startups, a lot of startups can also be classified in the IT/ITeS sector, right? So this classification is one needs to kind of be a little careful about how precise or indicative it is. But if it is indicative, we've seen IT/ITeS contribution recede, giving way to other sectors, smaller companies. It could be healthcare, it could be biotech, it could be defense, it could be infrastructure, it could be BFSI consulting, manufacturing, and also much smaller companies where tracking the sector becomes difficult, right? So these are multiple small accounts. All of them have kind of taken a higher proportion than IT/ITeS. So I think it's not that we have a concern around IT/ITeS. We actually see an opportunity where our hotels, even in Bangalore and Hyderabad, are continuing to see diversification of where the business is coming from. Okay. Thank you so much. Thank you. Thank you. Ladies and gentlemen, that was our last question for today. I would now like to hand the conference over to Mr. Ashish Jakhanwala for closing comments. Over to you, sir. Thank you so much, everybody. We truly enjoyed the Q&A, which I think leaves little for us to conclude with. As I had mentioned earlier, we remain very excited about having put the company on a path where over the next five years, we've secured both unlocking value in the P&L and also in the balance sheet. And we look forward to continue to work with all of you as we implement that plan. Thank you, everybody, and talk to you soon. Thank you. Thank you. On behalf of SAMHI Hotels Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.