Chalet Hotels Limited (CHALET) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Chalet Hotels Limited Quarter 1 FY '27 Conference Call. Please note, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Mr. Shwetank Singh, Managing Director and CEO. Thank you, and over to you, sir.

Thank you, Ryan, and a very good morning to all. I'm delighted to have you join us on this call. We appreciate this forum because it allows us to share our take on the macro and the micro factors that shape not only our current performance, but also our strategy and road map ahead. Further, I would like to highlight that we appreciate your queries and insights as they help us stay grounded, concentrated and in sync as we work to create long-term value for all our stakeholders. Quarter 1 has set a good tone for the full year. Overall performance has been strong despite challenging geopolitical situation. The demand scenario saw a mixed sentiment this quarter. Air traffic stayed flat for April to June, indicating some recovery in sentiment post the peak disruption in March. However, international business ex of crew remained flat year-on-year due to the West Asia conflict. As we had mentioned on previous earnings call as well, business foreign tourist arrival will take 60 days to normalize once the West Asia conflict nears resolution. We saw some stabilization this quarter before more recently, the situation erupted again as the fragile peace treaty was tested again and again. On the other hand, domestic and leisure witnessed strong demand driven by strength of domestic industry, rising affluence, changing consumer preferences and growing discretionary spend. Thus, the industry saw increase in occupancies in leisure and in locations where business demand is inclined towards domestic travelers. This is reflected in our asset performances as well. Leisure portfolio delivered a strong 19% RevPAR growth with a healthy mix of occupancy and ADR increase. Pune, a strong domestic market strong domestic-driven market also witnessed high double-digit RevPAR growth, while Hyderabad, which is largely an FTA-driven market, saw flattish occupancy. Bangalore, another FTA-dominated market saw lower occupancy year-on-year, partly due to lower group bookings and partially due to reduced relocation business, which tends to cluster in quarter 1 of each fiscal. I would like to highlight here that while occupancy was subdued in these markets, there was sustained growth in the average daily rates. For Mumbai, demand was moderate due to lesser events, but recovered somewhat in June. Mumbai for us, as we have been mentioning, is also being impacted due to ongoing construction activity at Powai. Thus, to help your analysis, I would highlight that JW Sahar saw good ADR growth as we continue to beat the market with steady occupancies. Mumbai Metropolitan region RevPAR was pulled down by Powai and Vashi, which is more than 60% of our total inventory in MMR as they saw lower occupancies due to construction at Powai and renovation at Vashi. The good news here is that our Vashi property is now completely ready, and we shall be able to announce the rebranding in the coming few weeks. Also, the work at Powai is in full swing and our port as well as the connectivity to the Westin banquet shall be in place by the end of this quarter, helping us to capitalize on the wedding season in half 2 of this fiscal. Also, as most of the noisy work is nearing an end, we shall endeavor to regain the occupancy there. Speaking about the Powai complex, I want to talk about the strategic importance of this asset. While we have seen some lag there in recent quarters, the complex is a clear example of value creation. We started off with 2 hotels in the early 2000s, and we upgraded to the Renaissance -- from Renaissance to Westin in 2022. We further added 0.9 million square foot of commercial office space in '24, which is now over 90% occupied and already throwing an annual EBITDA of close to INR 1,300 million. And we are in the process of further adding another 0.9 million square foot in the current fiscal. The complex has been quietly transforming itself into an integrated one with a revenue potential sniffing INR 9 billion to INR 10 billion. There have been also upgrades that have aided us in the revenue growth like addition of Nox, a sky lounge that used to be a dead space and now clocks circa INR 10 million a month in revenue within the first year of opening, addition of gaming and sports facilities and more. Several more changes are work in progress, including the widening of the approach road and the expansion of the banquet facility, which alone will 3x our facilities and become one of the largest in MMR. With these refreshes and upgrades, we expect the complex to regain significant business and become one of the growth drivers for Chalet over the next few years. In that context about -- sorry, with that context about macro environment and the overall industry and our micro markets, let me speak about the performance for this quarter. Excluding the residential business, our revenue grew by 10% year-on-year to INR 5,140 million with an EBITDA of INR 2,400 million, up 15% year-on-year. Importantly, EBITDA margin improved by 231 bps to 46.7%. Let me now touch upon the Hospitality business performance that is the core of our platform. RevPAR increased by 6.5% year-on-year, largely driven by an 8.5% year-on-year growth in average daily rates. Compared to business hotels, resorts did better this quarter with 19% RevPAR growth. Westin Rishikesh delivered a strong performance. Athiva Khandala continues to ramp up. We are doing multiple marketing events to create the market awareness, which are being appreciated by the guests and target customer base. One such theme is Vivaah by Athiva, which has received very encouraging response. The pickup in occupancy with ADR sustaining north of INR 15,000 gives us the confidence that the monsoons in the upcoming wedding season will be very strong. Hospitality revenue grew by 9%, while EBITDA stood at INR 1,784 million, up 11% year-on-year, reflecting 92 bps improvement in EBITDA margin on the back of resilient pricing dynamics and efficiency measures. Moving on to our Commercial Real Estate business. During the quarter, we signed an LOI for an additional 66,000 square foot at Bangalore, taking the overall occupancy level to 91%. Our June '26 run rate for rentals reached INR 290 million per month, slightly higher than March '26. As I have mentioned, commissioning of CIGNUS II at our Powai complex in FY '27-'28 will bring a major impetus to this business. Let me now talk about the updates on live projects. Work is in full swing at CIGNUS II Powai, and we are on track for FY '27-end substantial completion. We expect to launch a minimum of 70 rooms at Taj project at Delhi International Airport in quarter 4 of FY '27 with balance inventory to be launched in a phased manner thereafter, but within the first quarter of next financial year. Mindspace has begun excavation at Hyderabad and Airoli. Both these projects are well on track. We are evaluating expansion potential at Udaipur Resort, and we shall soon be able to give you the details for the same. Finally, I'm delighted to share that we have achieved eighth rank among midsized workplaces by Great Places to Work. This is an important milestone as we are focused on attracting and retaining best talent in the industry by providing them inclusive growth. Hospitality is a people-oriented business, and our talent pool ensures that we stay ahead of our peers and maintain strong customer scores. Before I hand over to Nitin, who will take you through the financial in details for the quarter, I want to emphasize that Indian Hospitality industry's performance over the next 4 to 5 months -- over the last 4 to 5 months reflect strong growth potential. The industry has delivered positive growth despite challenging geopolitical situation and has impacted -- and with the impacted international air traffic situation. This is a clear indication of the strength of the underlying domestic market. This drives our confidence forward towards the long-term growth. At Chalet, we continuously invest in our growth pipeline. Our strong cash flows and balance sheet are well aligned to fuel this expansion. We continue to focus on disciplined execution, operational excellence and prudent capital allocation as we move forward. With that, I now hand over to Nitin.

Good morning to everyone on the call. I'm pleased to walk you through our financial performance for the quarter ended 30th June '26 and provide perspective on key financial and performance drivers, balance sheet strength and capital allocation. Before I begin with the financial performance, I want to highlight that consolidated financials are not comparable year-on-year due to onetime recognition of our residential project at Koramangala last year same quarter. Excluding the Residential segment, core business revenue grew 10% year-on-year to INR 5,140 million, while EBITDA increased 15% year-on-year to INR 2,400 million. EBITDA margins expanded by 231 basis points to 46.7%, driven by strong performance across assets and efficiency measures, which we have implemented. Our net profit for the quarter stood at INR 861 million. For the quarter, Hospitality segment gave strong performance despite the headwinds from West Asia conflict impacting our inbound FTAs. We delivered 9% growth in revenue year-on-year to INR 4,185 million and 11% growth in EBITDA of INR 1,784 million, a strong performance by any measure. The shortfall in foreign arrivals was offset by robust MICE demand, reflecting both the resilience of our portfolio and our ability to pivot quickly to existing demand. EBITDA margin stood at 42.6%, higher by 92 basis points. As I have been highlighting over the past few quarters, our Hospitality EBITDA margin was being impacted by stabilization period of resort properties. Given the ramp-up at Westin Rishikesh and also continued improvement at Athiva Khandala, we have seen margin expansion this quarter. Also, our continuous efforts towards enhancing operating efficiency is helping us -- helping towards this purpose. We remain focused on maintaining cost-efficient operating structures, project productivity and exercising disciplined asset level cost control as the portfolio scales. Turning to the Commercial Real Estate business. This segment continues to provide high-margin, stable cash flows. The monthly rental exit run rate in June '26 stood at INR 290 million. Revenue for the quarter stood at INR 865 million, up 18% year-on-year, driven by higher occupancy. EBITDA stood at INR 735 million, up 21% year-on-year with an EBITDA margin of 85%, up 193 bps versus quarter 1 FY '26. Current portfolio committed is at approximately 91%. We expect monthly rentals to scale up to INR 300 million to INR 320 million during FY '27. Commissioning of CIGNUS II at Powai will also lead to a step change in growth FY '28 onwards. The current yearly rentals potentially give us a leverage advantage of INR 2,000 crore eligibility for LRD. These rentals also help us service the entire interest cost as it stands today, effectively freeing up our hotel assets to generate cash, which could then be utilized for acquisition, upgrade and execution of our announced pipeline. During the quarter, we handed over the remaining unit at our Koramangala residential project, marking the completion of Phase 1. Revenue recognition for the quarter is INR 73 million with EBITDA of INR 31 million. Now 168 units of Phase 2 are pending handover, which shall be done during the course of financial year '27. As mentioned earlier, the Koramangala commercial space of approximately 160,000 square feet is under construction and shall be leased by FY '28 post completion. Net debt as on June '26 stood at INR 20,405 million, slightly higher versus March '26 as we completed a few acquisitions. We have added 129 keys of Bangalore, refurbished and expanded Khandala assets and CIGNUS II Powai commercial without any increase in leverage for last 8 quarters. INR 10,914 million of net debt is actually allocable to assets under construction or which are yet to be operationalized. Two major projects included are CIGNUS Tower II at Powai and Taj at Delhi International Airport. Commissioning of these 2 assets shall significantly aid growth in the coming years. We continue to maintain a comfortable liquidity position around INR 4 billion as of June '26. The average cost of finance declined marginally to 7.4% as of June '26 versus 7.5% as of March '26, indicating strength of our [indiscernible] practices, leverage mix, cash flows and overall balance sheet strength. Looking ahead, we have outlined a planned CapEx of approximately INR 30 billion over financial year '27 to financial year '29 across our Hospitality and Commercial Real Estate portfolio. This includes committed investments and importantly, is expected to be largely funded through internal accruals, underscoring our focus on maintaining balance sheet discipline. Overall, our balance sheet continues to provide adequate headroom and financial flexibility to grow and pursue strategic opportunities as they arise. While I speak over growth, I would also like to highlight that we are a leading real estate developer in the country. It helps us in multiple ways, including identifying potential growth markets and making an entry through mixed-use assets. Some of the great examples are Westin Hyderabad, Mindspace commercial complex, conversion of mall assets, mall asset to higher-yielding CIGNUS commercial asset in Bangalore, utilizing the Powai complex FSI for commercial business. The construction cost for us is at lowest per key due to project management and construction efficiencies supported by smart procurement. Our execution capabilities are reflected in some of the projects we have executed in the recent past and are [indiscernible] as well, like upgrading and rebranding of Dukes Retreat to Athiva with an additional 67 keys and facilities within a record time. INR 10,914 million of net debt is allocable towards assets under construction, and we are yet to be operationalized. Hospitality portfolio shall be north of 5,000 keys and they will generate strong organic cash flows. The combination creates a robust, sustainable and stable free cash flow base to add inventory of 500 or more keys every year and support our long-term growth strategy. With that, I would like to open the floor for questions. Thank you.

[Operator Instructions] We take the first question from the line of Karan Khanna from AMBIT Capital.

Just a couple of questions from my side. Firstly, Shwetank on MMR, right? We've seen several quarters of relative RevPAR underperformance. So if you can talk a bit about the strategy here, how is the booking window looking here? And more importantly, any big MICE activities that you're expecting? And some thoughts on how is competition ramping up, specifically the Fairmont next to JW Marriott Sahar.

Thank you, Karan. As we have always said within MMR, if you look at our portfolio, it's basically 3 hotels. There is the FPS, there is the Powai Hotel and then there is JW Sahar. JW Sahar has always been an outperformer. We continue to outperform on the average rate side and occupancies have stayed steady in the -- and at a very high level. So that's something that doesn't bother us at all. If you look at Powai, we have been under construction, but this is a pain that we are going through for a gain of the future. As I spoke in my opening statement, this is a complex that is transforming itself and with 0.9 million of square foot of office space in play and another 0.9 million under development, the potential of this campus is very high. We are going through this pain as the construction is going -- ongoing on 2 accounts. One is that the porch is not available, which is why [indiscernible] stayed away from us. We have somehow managed to cover up for some of that pain through -- by taking smaller groups. Having said that, we have also lost some crew from that particular complex because of the noisy work that is going on. As we speak, the porch work will come to an end by the end of this quarter. So second half of the year, we are very confident that we'll be picking up business in the social segment. Even the noisy work is coming to an end. And by the end of another quarter, 1.5 quarters, we should be out of the noisy work, and we'll be only doing fit-outs within the building. So Powai should come back and roaring back even though it has underperformed in the last few quarters. Having said that, FPS was also under renovation. As you are well aware, we have invested INR 93 crores in that particular hotel, and we have a fresh new product, which is ready to be fully launched. We already are at the fag end of that process. The rooms have been handed over to operations, and we will be announcing the rebranding over the next week or so. So my sense is that next quarter -- this current quarter will already show improvement. But next quarter onwards, we should be back to the high levels of performance that can be expected from us and has always been the case. With respect to the competition, I would say that it would be remiss of me to talk about Fremont in particular. But I can tell you that in general, the supply seems to have been absorbed. And there is not enough -- there's no major supply that's coming through at least in the next year or 2. So we do expect that market to sort of now start to grow back again, and we will be partaking in that growth as well.

Sure. Secondly and lastly, if you look at the leisure part of the portfolio, including all the 3 resorts, which have done well this quarter. So will that lead to any change in the long-term guidance of, let's say, 20% of your portfolio towards leisure? Or would you look to allocate more in terms of expansion here? And on Inder Residency, given that it currently has about 144 keys with scope for expansion. So how much potential expansion -- potential in terms of expansion are you seeing here? And what are the time lines for that?

Okay. So very quickly on the leisure side, yes, it has done very well for us, and we continue to have faith in the resilience of the leisure market. It doesn't mean that we are changing our strategy quickly. We are in a very long gestation business and changing it because of a quarter's performance or 2-quarter performance even is not the best strategy. So we continue to work on the same strategy as we have always had. 20% of our portfolio should be leisure, and we will stay in that space. Coming to Udaipur, we are very excited about that acquisition. We are clearly looking at expansion potential there. The reason why I refrain from telling you an exact number is because we have put some plans for planning permission. Once we have clarity on that, we will come back to you. There are 2 steps of approvals that are required in this hotel. One is from the local authorities. And the second is from the army cantonment, which is around us. We are in full dialogue with them and we have -- we hope to bring good news to you. It will be difficult to give you a direct time line right now because there is a process that we have to go through, but we should expect all of this to get clarified over the next quarter or 2. And at that stage, we'll come back and you will be -- and I'm sure you'll be happy to note that the returns of this hotel are going to be very exciting. Whilst we are waiting for these approvals, we are not at a standstill. We have already started working on the internal designs. And for the existing building, we have the right to move in and start working, which we are doing as we speak. So there will be progress on the existing building. It's just the expansion that we are waiting to hear from the authorities and the Army.

[Operator Instructions] We take the next question from the line of Vikas Ahuja from Antique Stockbroking.

So my first question is, we have 3 tailwinds on occupancy getting into FY '27, Bangalore stabilization, Powai Vashi construction renovation and obviously, the resorts ramp-up. We started with a muted occupancy in Q1, but do we think with most properties stabilizing will help us to go back to 70-plus percent kind of occupancy maybe end of FY '27 or maybe in first half FY '28. Just addition to this, resort occupancy also this quarter trended to 51%, and we have guided it towards 60%. So is this tracking ahead of what we were estimating earlier?

Thank you, Vikas. I'm glad you picked up our expansion potential in the portfolio. Clearly, we are very hopeful on all those 3 accounts. And what I can tell you is that we are continuing to track well and the run rate that we are seeing of growth is very exciting for us. So we do expect all of these to stabilize and give us the growth impetus that we are looking for. With respect to resorts, the only -- I didn't fully pick up your question, but I would say that resorts in general operate in a fully stabilized situation at around anywhere between 60% and 65% occupancy. So that's what we are trending towards, and that's what we are looking at as the potential. If we look at our resort occupancy for this quarter, it was about 51%. And we expect that to continue to improve and slide upwards. Particularly excited about Athiva because we have seen a great traction. We have positioned it very well. And in particularly in Khandala, I would like to let you all know that we are creating a new market. Today, especially in the MICE segment, that market operates at a very different price level, and we are educating the market that what we have to offer has to come at a premium pricing, and that's taking a little bit more time. On the weekends, we are already getting more than our fair share of business and have managed to maintain the rates north of INR 15,000. So we are very excited about that property.

We take the next question from the line of Achal Kumar from HSBC.

So coming back to MMR, could you please give us in terms of the color, what was the ARR and occupancy performance excluding Powai property? And then what kind of delta you are expecting in terms of revenue at your Powai property since you are quite excited once the CIGNUS II completes, what kind of revenue delta you're expecting? That's my first question.

We are surprised and a little worried that the community is so focused on the last few quarters of MMR performance. Please don't write us off. We are in the path of creating long-term value, and that's why we don't get worried by these temporary blips. We knew we had to go through some pain while the construction is going on, and we are willing to take that pain. Just as a quick reminder, another 0.9 million being added. So the first 0.9 million square foot at CIGNUS I is already more than 90% occupied. And the last run rate of rentals that we had is north of 150. So we have already sort of started getting good traction there in that particular complex. An addition of another 0.9 million square foot will give us a very steady income of a serious quantity, which will help add further to the bottom line of the company. So we are very clear that we are in the business of creating value in this particular complex. With respect to the hotel, I think most of the pain is getting behind us now. As I said earlier, with the porch back, second half of the year from a social perspective should be good. We should start getting larger groups as well. We have also looked at expanding our banquet facilities. And once we get planning permission on that, we should be able to come out -- come back with more details, but that should actually become one of the -- one of the most major banqueting facilities that MMR has. And with that, we should add even further value to that particular complex. So we are not worried. We are watching this space closely, but it doesn't bother us as of now.

Right. And my second question is around Athiva. So you mentioned that you are doing a lot to sort of increase awareness, doing marketing campaign. But are you also thinking about doing something with the sales and distribution strategy or getting sort of doing some kind of agreement with the Marriott for this property? Is that going to help? So what exactly are you thinking about the Athiva and general, of course, your resort properties?

So, let me talk about Athiva Khandala in particular because you have touched a raw nerve and this is a conversation we constantly have in our boardrooms. Athiva Khandala is -- and just to remind you what was the earlier the dues, is a hotel that has been largely fed by domestic business, and it comes mainly from the Mumbai Metropolitan region and Pune. So having said that, we will -- we have no plans as of now to sort of tie up with any other brand. This is our experiment at setting up Athiva. And from the signs that we have seen, we are very encouraged. That's number one. Number two, we continue to invest on the marketing side of it. And as I said, we have already received great traction on the weekend. We are getting more than our fair share. We have managed to hold our rates. Where we still need work is on particular is during the weekdays because that's largely MICE. And for MICE, you need to knock on doors and let them know that we exist and that we have a portfolio. We have a hotel that has a lot to offer. As I said earlier, we are educating the market in the process as well because that market operated at a lower rate, but we believe that we have the product and we want to position it at a higher level. And all of this, why we are actually most excited is that if you look at our customer reviews, which are over 400 -- nearing 500 already online, we are at 4.9 plus rating. We are being accepted by our customers. We have fantastic customer feedback, and that's what gives us the most confidence that we will do very well in this resort and with Athiva in general.

We take the next question from the line of Prashant Biyani from Elara Capital.

Sir, can you give some granular details on Westin Rishikesh and Marriott Hyderabad, how they are doing? You have elaborated on Athiva, but on the other resort properties, how they are faring?

Okay. Westin Himalayas has been on fire this year, and we are actually growing year-on-year quite substantially there. We have managed to again, once again sort of hold the rate there while growing occupancy, and that has always been our target. When we had acquired this hotel, we wanted to get to a certain revenue number to get adequate returns on this. And we are well on track. In fact, we were tracking it against the feasibility that we had put in place, and we are bang on schedule. So we are very encouraged by the performance there. If we carry the same thinking forward to Marriott Aravali, which used to be the courtyard and we have just literally just rebranded. We have had some sort of relook at that place and on how to reposition it. We have added a clubhouse. We have added further guest facilities. We have even created new meeting spaces. So that should all start to kick in as we speak. We have even made the area around the swimming pool, the bar facilities, et cetera, of a much higher level now. So we would expect a higher rate positioning as we go into the year. So that's how we are viewing both our properties. And as I've always maintained, leisure portfolio is very exciting for us, and we want to continue to do well there.

Right. Sir, on Udaipur asset, while on the expanded portfolio, we are awaiting approvals, for the existing property, what would be the commercial time line? When are we going to start to operate it?

So one of the biggest mistakes sometimes we can make in portfolios is to partially open up a property. Whilst we can finish the interior works much sooner, we would like to open it in totality, and especially because we are looking to brand it under Athiva. So we want to properly launch this place. But what we are doing with the property vis-a-vis the way we have bought it will be a complete transformation. And the look and feel would be several notches higher than what it is right now. We want to take the maximum advantage of that particular market, which is largely driven by socials, as you are aware. And we are creating fantastic facilities, both open and closed banquet facilities with rooftops available, with open spaces available. And we have -- we are adding villas -- we are adding -- we are making a fantastic swimming pool at the center of all of it, great F&B offering. So the whole thing is looking very, very good. And as soon as it all comes into play, it will be a major revenue addition to our leisure portfolio and overall portfolio as well.

We take the next question from the line of Jinesh Joshi from PL Capital.

Sir, my question is on the ARR growth. I mean, basically, I just wanted to know how much commission do we end up paying for our GDS and OTA bookings? And how much of this growth of 8.5% is a function of the changes in the distribution channel mix that we have highlighted in this quarter versus the function of actual price hike. I know it might be difficult to quantify, but if you can give some color over here it may help because the share of OTA booking is down to about 7% in this quarter and that could be the reason why the ARR could be slightly up.

[Operator Instructions] Jinesh, if you could repeat your question for the management.

Sir, I just wanted to know how much commission do we end up paying for the GDS and OTA bookings? And how much of this ARR growth of 8.5% that we have reported in this quarter is a function of the change in the distribution channel mix that we have highlighted in the presentation versus the actual price hike that we have taken?

Okay. Thank you, Jinesh. I actually had answered this question, but I think I was speaking to a dead phone. Okay. So let me just repeat myself. So the first thing is on the commission side. And having tied up with really large chains like Marriott or Accor and so on and so forth, we are very confident that the commissions that we pay on any of the channels is at the bottom end of the market, and we are at the lowest end. So -- and if you look at our EBITDA margins and our room margins, you will be well -- you can quickly pick up that we are at the top end of the heap when it comes to the industry. So without giving away specific numbers, it's not correct to sort of talk about contracts publicly. I can tell you that we are paying at the bottom end of the overall payouts. Having said that, in terms of what's happening on the segmentation of our distribution channels, we haven't seen a major change on the distribution channel. It's pretty similar to what it was last year. And from a segmentation perspective, we do have small groups coming in. We have a social movement as usual. And crew has gone up for us. We have also gone back to the special corporates and given them slightly more attractive rates so that we can keep them within our property and not lose them to the competition. So all in all, we have managed to sort of maintain almost all of our segments and hold on to what we had so that we can continue on our growth despite the fact that there has been disruption on the foreign tourist arrivals.

Sure, sir. Just one last question from my side. I think the hotels that are under construction, we have highlighted progress of all the hotels, except for the South Goa one. And this one, I think we are planning to open by FY '28. So maybe can you just share what is the progress over here in terms of where are we in terms of the construction time lines?

Yes. So South Goa is a hotel that has continued to elude us. It is notoriously hard to start pouring concrete in Goa. And -- but what we have done in the interim is that we have -- we are ready from a design perspective, we are ready from a contracting perspective to hit the ground as soon as we get the approvals. As we speak, we have taken busy steps. We still hope to start construction by the end of this quarter, essentially once the rainy season is behind us. With that in mind, we know that we can build fast. It's a G plus 1 structure. And therefore, we would hope to finish this sooner than what a usual 200-room hotel would look like. But more on this once we start pouring concrete, please. So give us some leeway on this.

We take the next question from the line of Vaibhav Muley from Haitong India Securities.

My first question, Shwetank, was on our leisure portfolio. We have done a fantastic job of expanding occupancy by more than 500 bps. My question was related to whether this is sustainable? And when do you think we can reach this mark of 60% to 65% of stabilized occupancy, especially from the background that entire leisure industry itself has seen a very sharp improvement, partly because of the shift of travel that we have witnessed from foreign outbound destinations to internal destinations. So if there is any chance of this trend reversal that you expect once the global situation normalizes? And will there be again any impact on occupancy because of that trend reversal? That's my first question.