Ladies and Gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Rohan Joshi, an Individual Investor. Please go ahead.

No, actually we are talking about two hotels. One is the Orchid Hotel, Dwarka, which should open in this coming November-December. It is not in this quarter, but it will open in November- December, but we see its outlay. And similarly Gwalior, we see it as end October-November. So, it is not in this quarter, but in the coming quarter. Dwarka has been opened faster than or on track rather because the owner has done accordingly. And in Gwalior, it is opening now, but it could have opened a little earlier, but then based on whatever the owner, because the owner has to do the capex, the owner has to do the various certain things. So, we are dependent on the owner and that is why basically we could get delayed at times. But what is important is that even if it was delayed by now, whatever few months, important is that now we see it opening and we see its opening on the horizon. So, that is more important. I mean, like Dehradun should have opened a long time back, at least a year back. Candidly, I can say that at least, but it's not our property, unfortunately, and we have to depend on our owners. So, whatever, based on that we do, we do. Again, Mandvi, the owners are very proactive and, on the ball, so they are doing an excellent job. Rishikesh is going on as per currently the progress, so we know about that. Nashik has been a little delayed due to certain technical points, which is beyond the scope of the owner, considering certain things which are there. So, we are understanding over there. So, that's basically the outlay.

So, Rohan, if your question is supplying chain challenges on account of war, has that impacted? The answer is no. I mean, the challenges are behind us now. I mean, the properties, what we are expected to open, there could be some delays. I mean, like Vishal ji mentioned, one property, there are delays from owners, but otherwise we are on time.

Okay, sir. Thank you. Thank you so much, sir. And sir, my second question was about the occupancy rate. So, it has improved in Q1, as I know that it improved to 66% in Q1. So, what can we see the further trajectory of the occupancy rate going forward in Q2, Q3, if you can give me just a rough estimate, the ballpark idea.

See, typically, hospitality industry, Q1 and Q2 are soft, and business picks up. It is business travel as well as leisure in second half of the year, right? So, Q1 occupancy growth has shown good trend, and we expect this trend to continue for the remaining three quarters. Typically, business hotels cross more than 75-80% occupancy. Leisure properties are seasonal, depending on the micro market, occupancy differs, but will show strong growth.

Thank you, sir. That was from my end. Thank you.

Thank you. Our next question comes from the line of Gunit Singh with Counter Cyclical Investments. Please go ahead.

Hi, sir. Thank you for this opportunity and congratulations on a great set of numbers. And I would also like to congratulate you for bringing in someone with the experience of our new CFO into the organization. So, that shows the intent of the company. So, I actually have a question for our new CFO. So, sir, is there any strategic pivot or something different that you plan to do, or how you plan to steer the company forward? I would like to hear your thoughts on that.

So, we are evaluating various growth options. I mean, I don't want to say anything now. I mean, but yes, we are thinking or rather evaluating various growth options. And our balance sheet leverages are very comfortable. We are at INR 38-40 crore net debt position. Even if I take three times multiple of my forward EBITDA, we can raise debt comfortably up to INR 300 crore on the balance sheet.

Got it. So, previously, we have been more towards leased and managed properties on an asset- light model. So, like you mentioned in the previous remark, that the profits from Pune and Mumbai, they might fund our expansions, our internal expansion. So, will we be looking at our owned self-owned phone hotels in the future? Is that something that we would be shifting towards?

So, we will look at combination of both. I mean, asset-light model where we take properties on lease or revenue share. And we look at our own hotels as well. I mean, we may look at some brownfield hotels, which can be refurbished and put into operations immediately. Or we will look at some land parcels in deep market and develop our own hotels. So, we will look at both. And since both these our business hotels are expected to grow, it will generate sufficient cash to fund our expansion plans.

And sir, the hotels which are opened before FY26, are there any hotels which are loss-making? And the hotels which were opened in FY26, I mean, are most of them currently loss-making? And I want to understand, like we stopped our lease with IRA Mumbai, which wasn't profitable for us. So, are we planning something for the hotels which are loss-making and opened before FY26, something similar like that? Or what is the way forward?

So, see, based on our accounting standard, which we've been, before also you must have heard this way, is that when we open a new hotel, we book all the expenses of that opening in the

P&L of that hotel of that year. But naturally, it looks as a loss. But eventually that loss in the coming year does not remain a loss and our hotels become a profitable running entity. So, any hotel which is opened in, now for example, Bhavnagar, on its P&L today, on its standalone P&L is a loss. Why? Because we have travel expenses, we have mobilization expenses, certain things which are not in the owner's scope, which is in our own scope, or they may be our own additional proprietary certain software’s and all which we have, which are our cost. So, those are, but naturally in the initial, there is going to be a P&L loss on that front. But eventually afterwards, once the hotel stabilizes, as in after the first one year, they are in profit. This is a similar case of any, whether it's Sambhaji Nagar, whether it's whatever, those hotels, whichever have started first year, they always have, because very rarely can a hotel do that much, unless it's a large hotel, or there is an exception, like in the case of Ayodhya, it started off for first year, it was in profit, even though there also there was mobilization expenses. So, that is one thing. That said, I think Mr. Milind can take it forward.

See, any hotel, whether owned or taken on lease, I mean, it normally takes two to three years for them to scale up and stabilize. So, first year of operation, there could be losses at EBITDA level, but you have to look at long-term trade. And our hotels are scaling up, all hotels are scaling up and wherever we see any loss at operating level, we take corrective action there and there and try to control our cost or improve our revenues.

Got it. So, I mean, my question was regarding hotels opened before FY26, so FY25, FY24. Are any of them still loss-making?

No, no, not really, not really. I mean, all are making profit after lease charges.

That's great. That's great. So, my final question would be regarding the ARR for Orchid Hotels. So, I mean, we have seen that the ARR has not been growing for Orchid Hotels. So, are we taking any initiatives or do we plan to take any price hikes this year? I mean, what are your thoughts on that?

Ideally, hotel performance should be judged by REVPAR, that is revenue per available room. So, I mean, where we think there will be resistance to further improvement in ARR, we go through occupancy route. Now, as I already covered in my opening remarks, my Mumbai property occupancy went up to 91% and RevPAR went up to almost 40%. So, at that point of time, that micro market was supporting us on occupancy level. So, we decided to keep rates flat and sell more and more rooms. In Pune, we are driving both.

So, depends case to case and depends on the particular month, depending on how is the demand for that hotel in that micro market. So, there is no thumb rule per se. But yes, now we are looking at both. I mean, the intent is always to drive both, but depends on the competitive forces as well.

Got it, sir. Thank you very much and I wish you all the best.

Thank you. Our next question comes from the line of Pranav Naik, an individual investor. Please go ahead.

Yes. So, basically my question stands on the EBITDA margins. So, EBITDA margins, as far as I know, is approximately 27%. So, what actually helped these margins? Was it temporary factors or it's a long-term scenario?

Pranav, this is long-term. I mean, our target is to take EBITDA margins up to 30% and it comes from both. I mean, higher revenue as well as cost. So, we are looking at various options to control or to rationalize our costs. One of it is moving to renewable energy for some of the properties. So, this is a continuous process and I think this is not one of EBITDA margins. This will remain stable or improve further.

Okay, sir. So, this 30% EBITDA margin, when will you see those colors? Like, when will we be able to see, when will we reach that kind of 30% EBITDA margin?

Not immediately. I mean, we have to walk that path. But our internal target is two to three years.

Okay, sir. Thank you. And another question that I have is on the…

Pranav, please understand. I mean, as we scale up, I mean, my revenue will also go up, right? So, I have to hit that 30% margin on higher revenue. Right.

Correct. Right, Perfect. So, on the current demand environment, I have a question. So, basically, looking at the proper mix, like corporate lease, MICE, pilgrimage, what do you think will change meaningfully? Which segment will grow faster, which will be slower? And what are we targeting as a company in this product mix? Like, which exactly product mix you see that in future will have a meaningful change?

So, Pranav, there are many business drivers. When economy grows, the business travel grows, right? Now, with rising aspiration, leisure travel, experiential travel is increasing. MICE business is improving. So, all these factors will drive business for hospitality. And we have seen this trend last three, four years. The trend is expected to continue. I mean, we feel India is structurally long-term uptrend as far as hospitality is concerned.

Okay, sir. Right, sir. So, that's it from my side. Good. Thank you.

Our next question is from the line of Mahavir Jayant, an individual investor. Please go ahead.

Good afternoon. So, I just wanted to know, like with the company's debt position improving substantially, what are the current priorities with respect to the surplus cash, like new properties or further deleveraging or shareholder returns?

So, this is growth-driven company and we would like to grow, right? And we will judiciously deploy this capital for growth, whether it is managed properties or our own property. So, we look at growth options.

Okay. And what is the expected timeline for the newer properties to reach mature occupancy rate and profitability?

So, in two, three years, new property matures and it is EBITDA positive.

Thank you. Our next question is from the line of Akshay Sawla, an individual investor. Please go ahead. Akshay, your line has been unmuted.

So, I had two questions. First was regarding the current hotel pipeline that we have, like what properties, you know, we have already announced and what are we expecting further additions during FY27?

So, we are looking at around 400 keys addition, maybe next one year or 15 months from now. That is Gwalior, Dehradun, Dwarka, Nashik, Rishikesh and Mandvi Kutch. Okay. So, I am saying 12 to 15 months from now. Assuming there will be some delays. It could be earlier also.

And second thing I wanted to know that how do you see the balance between the Tier-1, Tier- 2 markets or Tier-3 markets and how is the company looking to expand over the next few years in these markets?

So, there is business for all segments in gateway cities, in Tier-1, Tier-2, leisure destinations, everywhere. I mean there are new growth drivers coming up like Bhavnagar. Now with Dholera, there is good demand, picking up in that market. So, as we see more investment in manufacturing, these new growth centers will come and leisure travel is booming.

So, one thing is that Tier-1 markets particularly have a natural entry barrier in terms of cost. So, you will not find a huge amount of inventory coming in into any Tier-1 city. The Tier-2, Tier- 3 is basically generally where the growth also is, but that's also that in the long run those markets they have to have like Bhubaneswar for example.

It used to be you can call it Tier-2 city, but Bhubaneswar initially had limited hotels, but had limited business. Today Bhubaneswar as a city has grown where there is a lot of business and a lot of hotels. So, the market though it expanded it also absorbed. So, in the same way we have basically to see city to city. Bhavnagar we are very buoyant. Why? Because Bhavnagar has a growth story apart from tourism in the 6 months where we have NRI movement and weddings and other things. There is also a base of industry. So, we need to balance industry, tourism and transient movement all put together which we see in the various markets particularly and this is there right now when we are looking at our Puri hotel, our Puri project. Puri also has this kind of very good mix of movement. So, that's how every market needs to be seen. So, we can't just go blanket in terms of any Tier-2 or any Tier-3 city. The city has to have a base and that's what we look at.

Akshay, now if you look at Pune market, our hotel is upscale, can be upgraded to say upper upscale. Now, there is no new announced hotel project in Pune for upper upscale and you need at least 5 years to start a new hotel. Now, Pune demand is growing. Pune commercial office absorption is growing. So, there is great potential for that property to grow in terms of rates, in terms of occupancy, everything.

Okay. Okay. Thank you so much. Thank you so much.

Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. Our next question comes from the line of Ronak Agarwal with I Thought PMS. Please go ahead.

Yeah. Thanks for the opportunity. I am very new to the hospitality industry. So, can you help me understand about the ramp up of the new hospital? So, how much time does it take for a brand-new hospital to reach to the optimum occupancy level? And what's the optimum occupancy level of a mature hospital?

You mean to say hotel or hospital? Hotel company. Being a hotel, ideally, whether it's a hospital or a hotel, your ideal occupancy is 100%. Okay. But the truth is that 100% doesn't happen whether it's a hotel or a hospital. In both cases, the ideal occupancy is 100%. But that does not happen. Secondly, the ideal ARR does not exist. Because each time you achieve a target, you have to break that target. If tomorrow a hotel achieves a target of say its budget was say 7,000 based on market study, based on competition analysis, based on the product that it has been made into, and let's say

for hypothetically say the market is at 7,000. That's where your occupancy comes in. And if your occupancy reaches a certain threshold, then the owner or the general manager will say, since my threshold of occupancy reached a certain level, why should I stick to 7,000? I will take this up to 8,000 or 9,000 or 8,500. Whatever it is, I will take it upwards. Why? Because after a point, I don't want a full house. I want also ARR. So, it's a dynamic pricing, dynamic market based on your neighbors, based on your own product, based on what exactly is happening in general, and what is the occupancy. Just by you putting a 10,000 and if your occupancy will be 20%, that also does not make sense. So, there is nothing like an ideal, but in general, if you are asking as a thumb rule, thumb rule workings are normally 60-65%, which again in a city hotel, Mr. Milind, you must have heard saying, for a city hotel, generally you should have 75-80% occupancy. But thumb rule is 60- 65%, and ADR is a subject of the market, average rate.

So, what is the kind of occupancy, let's say you are starting a new hotel, so what is the kind of occupancy that you will have in your first year, second year and going forward.

Yes. See, again, it depends in the micro market where that hotel is. Now, city business hotel, gateway cities, you will see occupancy going up to 75%. I mean, it is almost full on Monday to Friday and occupancy drops on weekend. If it is leisure property, occupancy is high on weekends, and you fill rooms with MICE, that is meetings, incentive conferences during weekdays. So, everything depends on the micro market where you are in, the number of hotels or number of rooms available in that micro market. And rates, I mean, you will find Lonavala or Mahabaleshwar, hotels are full on weekends, right, and rates very high, but rates drop substantially on weekdays.

So, what's the kind of CAPEX are we doing in the new hotel which we are going to open?

Case to case basis, there is CAPEX where it's required, upgradation, it is being done. Some upgradations are part of the budget, so they are part of the revenue that is generated and expense out of that, and that is there. Or some are basically major CAPEX, which may be outside the purview of the revenue expenditure and may come under capital expenditure. So, that is a case-to-case basis, sir.

Okay. So, what's the CAPEX which you will be doing?

Sir, let us restrict to about a limited number of questions so we can take our next person also, and then once someone else has asked, you can please come back in line.

Thank you. Our next question is from the line of Gunit Singh with Countercyclical Investments. Please go ahead.

Thank you for the follow-up. So, historically, we used to give some guidance for the coming year. So, I would like to ask the management, I mean, what kind of a top line or EBITDA are we aspiring to reach conservatively this year, if you have some range in mind?

So, Gunit, we don't want to give any guidance as such. But what we can tell you is the tailwinds or growth drivers are very strong, and we are expected to show growth on a quarter-on-quarter basis.

Got it. In Q1, the domestic travel was higher because Indian tourists were not traveling to Middle East, which used to account for I think 20-25% of outbound international travel for Indians. So, I mean, is that tailwind still going on? And according to you, I mean, was that one of the major reasons for higher occupancy? So, I would like to just get a take on that.

So, yes, one of the reasons was outbound foreign travel was restricted or limited on account of war. But generally, with higher disposable income and improved connectivity, the leisure travel is increasing year-on-year basis. So, I mean, we feel the trend will continue.

Got it. So, for our hotels, do we have a breakdown of leisure versus business?

So, normally, these are two distinct hotels. I mean, business hotels, we don't get leisure business. If you look at our Mumbai or Pune, mostly it is business travel. There is no leisure. And there are identified, I mean, Goa, it is leisure. In Rishikesh, it will be leisure.

Got it. Got it, sir. Wish you all the best.

Thank you. Our next question comes from the line of Suhag Patel, an individual investor. Please go ahead. Suhag, your line has been unmuted. You may proceed with your question.

Hi, sir. My question is regarding, like, is the company seeing enough demand to support the planned increase in room inventory? And how is it going to affect our average room rate?

Suhag, I did not get your question. Hello.

We didn't understand your question, Sorry, we were not able to get it. Can you repeat it, please?

Yeah. My question is regarding, is the company seeing enough demand to support the planned increase in room inventory? And how is it going to affect our average room rent?

So, the planned inventory is not in the cities where we operate, right? And when we look at new hotel project, we look at demand supply dynamics of that city or the expected growth in

demand in next few years. So, our new capacity, I mean, we are not adding any hotel in Mumbai per se today, right? Or in Pune, which will cannibalize my existing business. We are looking at new cities where we don't have presence. So, I don't think that will impact ARR. And when we look at new hotel project, we'll look at demand supply dynamics of that city.

Okay. Thank you for the opportunity. Yeah.

Thank you. Our next question comes from the line of Ronak Agarwal with ithought PMS. Please go ahead.

Yeah. Hi, sir. Thanks for the follow-up question. What's the kind of CAPEX are we looking to do in FY27 and FY28? And what is the CAPEX which we have already done in Q1, FY27?

Will you please repeat your question? He wants to know the CAPEX. What was in Q1? And what is our future CAPEX for the coming time?

Okay. So, most of our properties are on lease where our component of CAPEX is very minimum. But at appropriate time, we'll look at renovation, refurbishment of our Mumbai, Pune Hotel. So, plans are underway. We are finalizing design. So, we'll give guidance on that maybe next quarter or so. And if any property, if we get, let's say, brownfield or a land parcel, as we speak, there is no such project on the book. So, there will be CAPEX for that. So, I mean, just to give you guidance, it will be normal repair and maintenance CAPEX for next two years.

I think there's no questions further from what we can see. So, I think we can end the call. So, if there was anything, then it would be any questions. So, there's no point in unnecessarily dragging it. I think our results are very self-explanatory. This time, the improved presentation in our PPT also is there. And by the way, any participant who has any question or query further can directly reach out to Mr. Milind – our CFO or our CS – Mr. Nikhil. And we'd be happy to take up any questions and queries further. So, thank you, our moderator. And I think you can end the call after your closing.

Thank you. On behalf of Kamat Hotels (India) Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.