The Indian Hotels Company Limited (BOM:500850)

Investor Update

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Jul 7, 2021

We are delighted to welcome you all to the IET Sales Investors Meet twenty twenty one being hosted by Mr. Puneet Chattwal, Managing Director and CEO, IHCL and Mr. Giridhar Sanjeevi, Executive Vice President and CFO, IHCL. This is a phygital event wherein we have investors and analysts joining us from across the world along with the people present here. May I request those present to please turn their phones on silent as we now commence the presentation. Post the presentation, we will open the floor to our audience to cater to their questions. As a reminder, all online participants will at present be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference Good morning, everyone. Welcome to our event for those who are present in this room and those who have dialed in and using the digital format. We are very happy to see people back in the properties and very happy to see so many people showed up also in person. Definitely, it exceeded our expectations by a couple of people, I would say. The theme of today's presentation is creating value and shaping the future. I would share this secret with you. We had the same theme three plus years ago when we actually prepared as management the journey of aspiration 2022, which we then made public. But we never gave up on it. We put it on hold and whatever we call it going forward and that is what we will walk you through, where we are coming from in the pre COVID, what happened during COVID and what is our plan going forward. So the usual disclaimer, I think this is our CFO and our company secretary and our legal people asked to put this slide on. I had not seen it earlier in my notes, but it just appeared, so it took me a bit by surprise. So the four agenda points: aspiration to execution post our announcement the COVID impact, creating value, shaping the future, as well as our last one slide of our investment thesis. What we thought was, what if a company which is 100 plus years old, what if it reimagined itself? And that gave way to the 3 Rs which we had as a part of our strategy, reimagining, restructure and reengineering. I think we were one of the trendsetters because after that a lot of people started using the connotation of re. It started coming up in a lot of strategies. So we announced this somewhere in February 2018, and the meeting that I said of the top leadership team happened on November 30 and December 1 in 2017. We came up with a very simple pyramid. This is easy to remember, which said we will grow by 15 hotels a year. We will grow our margins by 800 basis points and we will have a hedged portfolio because our past was owner operator that we will grow the asset light part of the business, use our strong brands to gain management contracts. And we said while doing so, we will build on our core values of TAJ as well as Tata's, TAJ standing for Trust, Awareness, Joy. Tata values are well known to all of you as investors. And then our key enablers being our strong Pan India footprint, our presence in Palaces, Safaris and also our very strong brand equity, which you keep seeing again and again. And then we said we will reimagine our brandscape. We will restructure our portfolio by selling noncore assets, by simplifying our things that we had collected over last fifty, sixty, one hundred years and to start simplifying the structure and reengineering our margins, changing our cost base. And all this is a bit relevant for today's discussion or for today's presentation because we had started doing this pre COVID. It came very handy when COVID hit. Had we started it then, it might have been a bit too late. So we started reengineering our margins with the ultimate objective of being the most iconic and most profitable hospitality company from South Asia. So I think the plan was very clear, very simple, one pyramid says it all. We promised, as I said on the pyramid, to be most iconic, most profitable, that we would grow our portfolio. We will have a portfolio which is well hedged with fifty-fifty balance at the 2022. And from a branded house, everything being a bit of Taj, we will create a hospitality ecosystem and unleash the potential of all the brands. So I remember when I came, I saw that there were a lot of things disturbing the Taj brand. If we got rid of those, Taj automatically becomes more iconic. That's a short term and a quick strategy to put Taj in front of every promotion, in front of every brand by calling it Buy Taj or Taj something, but long term it hurts the very backbone of the hospitality business because that is our backbone is Taj. Our strength is Taj. So we need to protect, grow taj, but make sure that that is not getting disturbed because short term, add taj to anything, it will sell faster. So we didn't do that. When you look at the backdrop today, if you have added new brands like Arma, like Cumin, there is no reference to Taj. These are all stand alone businesses and that is the journey we had embarked upon. So that was our promise. And what did we deliver? I think all of you can be very proud, not as investors in us, but as a nation, we can be proud that Taj was rated as the strongest brand in hotel business across the world. We were also rated number two this year and number one last year by the same group across all sectors in India. So it became the strongest brand last year in India across all sectors. This year, we were displaced and became number two. And it's okay. When you're number one, can only become number two. Whether you are a tennis star like Nadal or Djokovic, but that doesn't mean that they are not good. They are both one of the greatest tennis stars. So we are okay to be among always among the top three, top five brands that this nation has produced because it is across all sectors. It's not just being the top hospitality brand. I think on the other businesses, which we'll come to in a bit, we were also able to deliver on our promise quite significantly. I don't know if it jumped a slide, no, it did not. So where were we coming from? This is just an easy review where we were. We were a highly profitable hotel business fifteen years ago with returns on pat that we can only dream of in this business in the world. A lot of you ask this question, is this going to come back? The likelihood is no. Because we all know the period of 02/1927 was a period that the industry saw rates of $400 plus in Bangalore. The occupancies were great. The supply was short. The demand was high. Lot of MNCs coming into India. But more importantly, what led to the subprime, people were spending money that they did not have possibly. So that led to our collapse of Lehman and everything else that happened. So that three, four, five year period is an exceptional period, just like the last eighteen months is an exceptional period and maybe another six months. So these kind of things don't last forever. And then where did we land? We landed into almost a loss making company for ten years. That's when we announced our aspiration 2022. We took some low hanging fruits, took a short term gain and then we turned the company into profit mode in that very year of the announcement and then kind of doubled and tripled and went to 3.5x of the profit. But if we took the total of the three years versus total of the previous three years, the shift was significant. So all was going well. We were also feeling great. And then we come to what happened. In the terms of growing our portfolio, if you look at this chart, you will see how we grew by more than 70 contracts in that period of pre COVID of the three years time. And 2019, 3,582 new rooms added with almost 40, I would say, 51 contracts in two years, that 25 a year. That means more than two contracts a month all on the asset light model. So I think this was very significant, close to 70 hotels signed in three years' time is something which we had never heard of. Very important, and these are the slides which are new, which you have not seen in this form before, which we are presenting today, is the shift of the portfolio from being asset heavy to asset light. So if you look at where we were even in 2017, 2018, let's not go to 2017, 2018, '18, and and '20 and we moved from management contracts of 32% to 46%. We had promised fifty-fifty by 2022, but the total portfolio had a significant shift. Our company is a bit special. Most of our management contracts before this period are coming through our joint ventures and associate companies. These were not single owner management contracts. So we made that shift from creating joint ventures and gaining management contracts to doing that single owner management contract, which is far more tougher. But it helped us because then there was no capital employed directly or indirectly. And this is what we did to our brandscape. We unleashed the potential of each of our brands. And a lot of our brands were reimagined. If you see here even a Flight Kitchen business, Tart Sats, that's a new logo. That's a new style. Ginger was reimagined. Vivanta was reimagined. We launched selections as a part of our portfolio, which will be very interesting to watch now. When you get a lot of distressed assets on the market and they neither fit into Vivanta or Ginger or Taj, they could be a part of the collection of the names in any city as long as they are in the top three hotels of that destination. One thing is very clear. As Indian hotels in any segment that we will operate, we will be a premium product because indirectly we never want to hurt Taj because Indian hotels is the corporate entity. It is how we are listed. But we are popularly still known as the Taj Group. So we cannot allow any of our brand or we should not allow any of our brands to be considered as cheap. It has to be premium in its marketplace, in its business model. So if you look at all this that we have done, these are all premium. And some of these businesses, we'll talk about in the subsequent slides. And after having achieved all these things, we got into a COVID situation where 10% of contribution of global GDP, 10% of all jobs created were all kind of demolished by this crisis of its own kind. I think we are all aware of those figures. They are depressing enough. I will not go too much into detail, but just say that the global tourism sector lost $4,000,000,000,000 India lost 90,000 crores in revenue, almost 30 basis point drop in occupancy, 20 drop in average rates and that meant approximately 50% to 60% drop in what we call the RevPAR. And this line clearly shows our domestic revenue, how we came off the cliff to April, not this year, when there was a complete lockdown after March 24. We almost got to zero revenues. Then slowly, slowly, we started recovering. November, December, Jan, Feb was looking good and then came again the next big blow to us with the second wave. And I think June, all those who would be interested to know, is gone off quite well. In leisure destinations, there is a new WhatsApp floating around on investor groups. There's a shortage of beds, this time not in hospitals but in leisure destinations and hotels. So actually, it is true. If we looked at our own portfolio in Shimla, in Rishikesh and many such destinations, as you've seen in the news, people flocking into Himachal Pradesh, the queues that were there in Panchkula for people driving into those kind of leisure destinations, that the memories of the second wave have been far shorter than the memories of the first wave despite a 4x number of cases from ninety thousand to four hundred thousand to such a devastation that it caused, especially in places in North Of India, that things have recovered faster. Unfortunately, human beings are like that, and fortunately also because we are very adaptable. And I remember what happened in the aftermath of nineeleven. It took us eighteen months, Then came London bombings, then came Madrid bombings, then came Paris, then came Nice. Every time our memories keep getting shorter and we start getting used to that these kind of things happen and life moves on. But let's hope that life really moves on and there is no third wave coming which everybody talks about. This is the time when the management team of our company came together and said, we cannot rely on hope. Hopefully, it is all over. Hopefully, the lockdown will finish April. Hopefully, it will finish May or June. We said this cannot be our strategy. We have to be perseverant and we have to demonstrate resilience like never before because we felt that this would go on for longer. And as management, we should control what we can control and the rest we have to just accept because we have no control on it. So this is the time we came and launched what we call reset. We said this is no time for aspiration. There's no time for ambition. We have to press a button of reset and we have to do it with stragility, which is the combination of this new strategy, which is executed with unprecedented agility in a very, very legacy company with over one hundred years of history, we have to move fast. And what we did was we came up with very simple things. What can we do as revenue initiatives? What can we do on the excellence front in terms of making sure that people who we are hosting feel safe, secure and comfortable? And what can we do in terms of spend optimization? When control the cost with all the core values, protecting the core values of trust, awareness, joy as well as the Tata values, how we can control our spend. Effective asset management, effective is very important because we could have sold assets very cheap and we would have looked very bad today because the prices have bounced back to 70%, 80% of the level. But at a time like this last year, assets were selling at 40% of the replacement value and the gap between the buyers and sellers was huge. So we kept going on, on whatever we could call under effective asset management and being thrift and financially prudent, checking on every spend that we made and you'll see that also in the forthcoming slides. A short film, instead of me going on, on what we did on Reset, I think this movie captures a lot of initiatives that we put into place. The RESET initiatives gave us on the revenue front INR $2.64 crores on spend optimization north of INR 400 crores on effective asset management around INR 70 crores and by being swift and financially prudent another INR 135 crores. I think all this is explained quite well in our quarterly calls that we have when we announce results. I think one of the key focuses with this agility that we went on doing things and doing various kinds of campaigns helped us to gain more market share than the industry average without exception in any market. There were certain markets when they opened up like Goa. Between November and March, Goa did for us more revenue than pre COVID levels. I mean it's not a secret that's how it was. And this was very significant. I think Goa almost contributed 46% of the EBITDA of the company. And we are very, very pleased that we have around 18 different outlets amongst all brands, which includes four Taj, one Selection, three operational ginger properties, several amas now, and we are very pleased with that. I think the same happened in Rajasthan. Rajasthan with Jaipur being the favorite destination, especially for people from Delhi, it was an easy destination to drive to. Especially if you come from the area of Delhi NCR like Gurgaon, you could be there in a couple of hours in your own car. So that was quite strong for us, so was Udaipur. And when we opened Jodhpur, it picked up also quite well. I think the challenge the industry has, although we did well, is on the right side of this chart. The day we get business back in Delhi, Mumbai and Bangalore to more than 60% versus where it has been, then the industry would start thriving again because we have changed our cost base, but these are big machines of Delhi, Mumbai and Bangalore, especially in our portfolio. We have a significant presence. As we all know, we are here in Taj Lands End, but we also have Taj Mahal Palace Tower. We have several other properties like Santa Cruz, President, Ginger in Mahakali, Ginger in Delhi, Delhi, Andheri, etcetera. But Delhi also with Taj Palace, Taj Mahal, Vivanta. In Bangalore, have six plus properties also in operations. And these are big machines. These are also part of our IHCL stand alone business. So I think this is very important not just for us but for the industry that these three cities come back. We are seeing first signs, but this is not enough. The good thing is Delhi has recovered a bit more in terms of opening of hotels, openings of bars as was announced two days ago. And Mumbai is still a bit more on a careful trajectory and that's fine, but as long as we get that opening towards the second half of the year. Our key strategic imperatives on this front was capitalize on the business recovery as and when it came. So the last fifteen days of June were very good. July is looking very, very good. So we have to capitalize and not just sit back. So that's what we did even in the months of November, December till like March 15. And kind of following this graph, the whole recovery business is also related to the graph when it peaks, the business drops. When the graph starts going down, the business starts picking up. So it's a very important direct correlation of a kind, which we have not seen in this form before. There is always a lag, but this is almost, a direct correlation. A lot of people that I know personally and I've met, they rather go and take a trip today because they have God knows when maybe there is another lockdown, so let's get on on the road or fly or whatever, do it now. So this is something which is very special. What is also very important is we tend to be very tough on ourselves, but actually India has vaccinated more people than any other country in the world. And this vaccination drive will help this business to become sustainable. Otherwise, we'll keep having the stop go, partial lockdown, partial opening and restricted openings as we go forward. So India leads the way on vaccination. But having said that, we are using three terms here, short term, midterm and long term. Let me start with short term. We do see certain restrictions staying on in certain states. Now the challenge we have and the opportunity is if there was an alignment on the some kind of rules, protocols, regulations that became common for the country, then the travel would recovery and travel would be easier and faster. But every state seems to still have different kinds of norms and we are working very hard through different associations like CII, HAI, FATH, etcetera, to get some kind of alignment on that front just like we had for the health and sanitation norms of masks or disinfection that what should be the travel protocol or learning from Europe how they are doing it out there, how they are opening up. Corporate demand will be a challenge in the short term. Eventually, will come just like we have all come together here. So that part is going to happen, but it's going to, in the short term, stay a bit flat. International travel will still be restricted, although the last three days of announcements have been positive, have been extremely positive as announced by the German government, as announced by the Swiss, as also the announcement made by UK and some expected on the nineteenth of this month. So I think that is important for us. U. S. Is important for us because we have significant assets. London is a very important market for us. We even consider it as a domestic market because for people to go to London from India is like going to Bangalore or Chennai. It's just a longer flight, but they consider it as like a national travel. A lot of people think they actually know London more than they would know other big metros in India. Domestic leisure will still lead the recovery in the short term. There is not going to be any change on that front. Domestic leisure is very strong also in light of the fact that 25,000,000 people who were traveling abroad are unable to travel the way they were doing it in a pre COVID level. So they have to go somewhere. That is what is driving the domestic leisure and the domestic demand. Vaccination coverage will improve. There will be, I think for all of you, that is a very important one, and we put it as the last term. There will be some consolidation, some M and A activity beginning in a three to six months period from now because the impact on the industry has been devastating and this will only accelerate as and when the moratoriums run out. And I think it has always happened. M and A is a part and parcel of any kind of business, any kind of industry. But certain periods when there is extraordinary growth or there is extraordinary downturn, they tend to accelerate the M and A activity. In the medium term, we expect travel to rebound completely. We also expect our international hotel performance to pick up. What we can share here definitely with a lot of confidence is London and New York and San Francisco on an average occupancy today are higher than Delhi, Mumbai or Bangalore. Last year, same time, they were shut down. And also with the social security laws that are there and the contributions that come from the government side, it makes the cost of employment a bit cheaper, which is unfortunately not a system that we have on the domestic front. In the medium term, we also see a lot of rebrandings and conversions as people will want to get market share, but the stronger brands will dominate the markets. There will be first recovery in occupancies. Once it reaches a certain level, 60 plus in any given market, the rates will follow. And we have seen that in markets like Rajasthan, Goa or in the hills in Shimla or Rishikesh, there the rates are not under pressure once the occupancies exceed a certain threshold. And we think 60% to 65% is the threshold for the rates to bounce back. In the long term, obviously, we have to, at some point, go back to the pre COVID level and also build in the inflationary impact. There will be improved profitability in the sector. This sector has had a one time opportunity to adjust and relook at a lot of its costs, including us. And I think that will help the sector become more profitable. A new segment will emerge in which we are already participating, that is home stays. I think the pandemic has taught people that we must have another second or a third home to go to should there be a problem so that you can operate out of there, whether Mumbaikers went to Ambi Valley or they went to Mahabaleshwar or they went to Delhiites, to Uttarakhand or Himachal. A lot of people were operating out of the second home if they had or they booked a home stay for fifteen days, twenty days or even a month. Sustainability focus, the companies that will not focus on sustainability will become history. So this is a long term trend we see. Digital being the new way of life and the corporate will also face a new normal. So I think if you look at this year, it's still a bit of survival but could also be revival. We have not put it on this slide. It could be revival in a good way if the third wave impact is not there or if there is no third wave at all. I think it's anybody's guess whether there is or there is not. There is a high probability that there will be, but it's not about the wave, it's about the impact that it had, especially the second wave. Definitely, revival is around the corner because we have eighteen months of this pandemic behind us. And if we add the rest of the nine months in this year, this financial year, then it gets closer to like thirty months. So revival has to happen at some point. Any kind of calamity should be over, although there are no guarantees for it. And eventually, it will be a phase of thrival because in all this period, the supply side is either stagnant or becoming or witnessing a negative growth. When hotels are being shut, that supply is going out of the market. Some of them may never open again. So when demand begins to come back, you enter into a tribal phase very strong because again we have the same situation of demand being stronger than the supply side. And we feel that we are rightly positioned by being an operator in all possible segments to capitalize on it in the form that we had planned even before the pandemic. When it comes to focusing on new brands and new businesses, I think it is very nice to see, I mentioned before, how we reimagined some of our brands. Ginger in the LeanLux segment, Tad Sats, very interesting, we'll show you some statistics. The Chambers, after forty years as a private membership club, it's always been a part of our portfolio but never looked at it that way. Our spa brand, Jeeva, and we might even come up with another connotation on Jeeva as this is becoming health, fitness, rejuvenation, energize. These are things that have become more important than ever before. And Khazana, we have to do something. We have not done something very drastically different, but that's something which we have parked and we'll be sharing that news soon. On the new businesses, Cumin has worked very well for us during this lockdown period. See, the new businesses, all of them have one thing in common. They are all built on incremental cost and incremental revenue and incremental profit model. There is no capital outlay that we have had to build these businesses. We had the kitchens, we had the chefs, we had the staff. So it's typically a variable cost model. So human order gives us at least a 50% margin. AMA gives us around 70% because it's built on a hub and spoke business model. So if you are in North Goa, then the General Manager of Holiday Village and Agwada takes care of those villas with his team and there is some kind of a cost allocation that we have come up with so that it's a clean-cut in terms of what has been done. But you don't have to deploy staff. And the way we are managing that business is we take like any other service provider 15% of the revenue as fees and because again it's on incremental cost, that fees up to 70% gets converted into our EBITDA and also creates a very high margin. New and Now is our new salon business and I'll give share some numbers on where we expect it to go. And Anuka is the non aviation food business that Tad Sats has started. So it was important that Tad Sats is also not only 100% airline driven business that it is maybe 70% to 80% airlines driven and there's 20% non aviation business in there. The reimagined ginger, something which we are very proud of, this building has been demolished and now the basement works are on. Anybody passing by on that road from Santa Cruz, you can see this. These works are happening and that old dilapidated building is gone. This will be three seventy one rooms as we speak today. But more importantly, Ginger achieved more than 60% of its pre COVID level revenue, and we see no difference in that trend in this year either. I think if anything, that 60% will grow much higher and that's the kind of a guidance we can give. But in that segment, both corporate and leisure travel is happening. It's only in the top end of the market where business travel is subdued. So in the top end of the market, what's very differently than the corporate demand in that sector. Because of a new F and B concept, we've been able to double our food and beverage revenue. We were outsourcing food and beverage, which is okay when you're doing it in The U. S, when you're doing it in Europe because it's a low margin business, very high labor cost. But I think in places like India, you still make lot of money on food and beverage. And I think we took it back and we are doing food and beverage now ourselves, so it's our revenue. We had positive EBITDA for Ginger also last year. We have actually been having positive EBITDA. And hopefully, we will have net net positive this year despite COVID. That's a high possibility because of the change in the business model and we are getting rid of some of the assets as we have communicated. Two of the Ginger assets were sold in the last six months' time. There are 78 hotels now, of which almost 50% are getting into close to the lean lux model and it is going to be a 100 hotels portfolio very soon. So there is a strong focus on growth and a very strong focus on scaling up Ginger. It's easier and faster to do. And in a heterogeneous country like India, you could have, in this segment, thousands of hotels. Not necessarily all has ginger, but if you look at U. K. And you look at Premier Inn, Travelodge, Holiday Inn Express, Hampton, these are like 3,000 plus hotels. If you look at Germany with Motel One, Ibis, etcetera, France with Ibis and other such hotels in this category, this is a very big business. So as India grows from a developing to strong growth to a mature market, some of these brands and these trends will solidify themselves and establish themselves in a very different way than we know it today. Going on to Sats, in March, actually Tad Sats did more flights than in the March pre COVID. And Tad Sats almost got 50% of the market share because of one or the other airline catering provider leaving the market. And then as I said before, focusing on non aviation business and on Anuka, we think this is a very good business, which we had not focused on earlier. And we have very good partners. SACS is as good as it gets in this business, in this world possibly. And we have a very good JV, very good governance with our partners from Singapore. So and a very important thing is the use of digital and technology the way they do. I think we have an opportunity to leverage that going forward. The Chambers is something else we focused on. In Delhi, the Chambers at the Man Singh was launched. I can say that with a lot of proudness. I think from what I know of is the best private membership club any hotel luxury brand has to offer on the Indian Subcontinent. It is just outstanding and I would encourage all of you to go and visit there. And if you happen to be in Delhi, please let us know through e mail or phone call or whatever, we will facilitate that entry. Today, have seven in operation, two more are about to open. The eighth one, which is opening in a week or ten days' time, will be in London at our St. James Court in Buckingham Gate. So we are very, very pleased with that. We have converted this whole chamber's membership into a global membership. And that will give not only access to Dubai, which was available till now and then it's London, And we do have a plan to do it at our property also in New York. We have almost 2,000 members and our plan is as the footprint grows, this can take up to 4,000 members as a key drive on membership. And just on the annual fees and the new members coming in, this has the potential to become almost INR 150 crore business, but again, with an 80% flow through. So if not 80%, at least 100% from the 150% is a flow through because this does not include the consumption within chambers of any kind of food, alcohol, meeting rooms, etcetera, that goes into the hotels P and L. That's been the norm for last forty plus years since Chambers was launched. Cumin, again, crore business in its very first year, expected to get to INR500 crores. That's what we are aiming for in terms of GMV. Now it is in 15 cities. We target to have it in 25 cities, three lakh plus app downloads. And very interestingly, since we launched this business, on the app, we have served less meals, but actually we have almost touched 1,000,000. And also in the second wave, all the meal supply that we did to the hospitals and other institutions as Meals to Smiles was done under the Cuman brand. So all the packaging, all the stuff that was provided was under Cumin and that created another 1,000,000 meals. So I think Cumin this year should definitely get a 50% growth on the figure of the previous year, which had like nine months of the launch figures. So I think that is something at an enterprise level and what we consolidate could be a little lower number. But enterprise level, definitely, this is also actually, the figure of 100 is becoming very interesting for us this century. We want Amaz very soon to get to 100, ginger is getting to 100, you will see Taj brand will be getting to 100, cumin revenue will be getting to 100. It's just a coincidence. It's not something that has been planned for this presentation or was a part of our strategy when we started doing this business. The Bungalow is Yours, let's say, Amaz, again, a potential of almost INR500 crores of revenue if we keep scaling it up. Today is at INR44 crores potential, again, to INR500 crores. INR44 crores has been done really in the pandemic times. So in good times, we can do much more. Even in our own portfolio, we have several assets where we own the land, where we have the additional FSI. We can create a small AMA portfolio on the existing properties. As an example, in Taj Exotica, we could do a certain portion. It is such a large piece of land, we could have also a kind of a multi brand on the same piece of real estate and that could include dharma. We have some land in Kumaraqam. We have some there are so many places where we can do it on our own. So if you own the land, the incremental cost of building a villa is no more than INR 3 crores to 5 crores. So I think this is a very, very good potential for us. And up till now, we have not spent any money except for two first properties in North Goa. One was a social center which we were running, which belonged to us. So we owned it, so we refurbished it. That's the Braganza House. And the second one was the Cardozo house, which for twenty years operated as a piggery. So today, it is by spending INR 4 crores or 5 crores, we just got a valuation done. This is like a six five to 6x increase if you were to sell it and kind of lease it back or to manage it and putting it in a pool. So I think it's a good business model to be in there. And significant value creation is possible through these brands. And one can see that in twenty seventeen-twenty eighteen, Ginger was 52 hotels. Today, it's 78 going to 100 or $2.50. The Chambers was 2,000 members going to 4,000 members. Cumin, as I said, the gross merchandise value, the armor properties and Seven Rivers is something we are very excited about. This is a partnership which we did with AB InBev. The brand belongs to them. This is the only brand that we don't own in our portfolio, but we run very successfully. So the brew kit, the brewmaster, the some of the investments come from them. And we put the first one in MG Road, and it was a roaring success from day one. Our margins in that group up like went on by 4x. It was a new product. It created the buzz around the brand because for some time we had de branded or taken it down to Vivanta and then we brought it back after renovation to Taj. It was like the most buzzing place in Bangalore. So I think this is something exciting. We'll be doing another ten, fifteen. Ideally, we would do even more, but there are license issues and we want to be realistic. It takes time to get for a microbrewery a license and there are other complications attached. Our target is not unrealistic in terms of. In terms of asset light growth, I'm glad we have here also HPS Analog represented based on their report in 2020, both on brand signings and brand openings, on rooms, on number of hotels. Indian hotels ranked number one, far ahead of any other domestic or international brand by a huge, huge margin. I don't see any change in that trend unless there was some kind of a consolidation or merger that happened globally and that changed the scenario. Our asset light pipeline, if you look at operational and if you look at pipeline, that's how that 46% management contract number comes from on the complete right hand side of the pie. But important is that 94% of our portfolio is asset light. The 6% that you see is very few like the Santa Cruz property that is under construction, which is not on the light model. So we have a few of those exceptions and they are good because they are there to build our brands for the future. They are the ones which are going to drive these brands and help in the repositioning of these brands going forward. As I said, this chart says it all. If you look at it, Taj is 75. So another 25 and then it gets close to 100. And the Gingers, you see, is also another 22, gets close to 100. We have 150 hotels in operation on the domestic front. The total globally is two twenty one and fifty hotels we have in pipeline, which is very, very strong. There is always some form of washout of the pipeline, but there is also some conversions that come in, right, existing hotels that can be branded. So that would balance it out. So I think this figure of 200 is realistic and is also those contracts that are signed where we have a legal commitment and have been communicated to the market. Obviously, this has helped us become the number one hospitality ecosystem in India in terms of number of locations, in terms of number of hotels. We are on 90 plus locations with 150 hotels in operation. Nobody has that. And if you look at it globally today, we are present in 100 plus locations. Very interesting and I know my colleague Giri is very fond of this slide because this creates a lot of the asset light model test is ultimately the test in how much your management fee income portfolio has grown. And although we degrew a bit and then it went down because of the COVID crisis. This, what we have today, has a potential to go up to INR350 crores. So that is the kind of strength we have with the management contracts in the pipeline for the growth in this portfolio and this is very important because that is what drives your EBITDA margin. As all of you know, because you also deal with certain other global majors and you analyze those, you see that their performance has been a bit more resilient even in a pandemic because if your management fees is typically 5% to 10%, I would say 5% to nine depending on the contract, the size of the hotel, the market you are in. And if your revenue goes down by 50%, the 5% to 7% also goes down by 50%. In the worst case, you lose out the incentive fee, you still have your 3% base fee or 2.5% base fee and another 2.5% reimbursables or marketing fee. So you still get that amount. Whereas if you own the P and L, that is the whole thing about asset heavy and asset light, and your revenue drops by 50% or 60% and you did a margin of 15%, then you're in a negative, huge negative territory of minus 15% to minus 25% because of the nature of fixed costs in the hotel business. So I think that is the interesting part on how management fees correlate with a downturn and an upturn. In an upturn, you don't gain a lot. So that's why we were very happy to go for a hedged portfolio because then our big machines in an upturn like the Taj Mahal or Taj Lands' End or the West End or Taj Palace in Delhi, they start performing very high and our managed portfolio keeps adding the amount that is needed but at a very high margin and that's what gives that percentage growth in the EBITDA figures. So through asset light growth, as we said, we are aiming now from two twenty to get to 300 hotels over the three to five years, managed portfolio mix of almost 50% and management fees numbers I gave you already. So this is something we feel if we could add 70 contracts during and pre pandemic in the three point five years, there is no reason we can't add another 80 in the next three to five years. So that our portfolio becomes a portfolio of 300 hotels. Continued spend optimization, this is something I alluded to at the beginning of the presentation. Very, very important, our operating costs have gone down by 45% during this period. This had a big portion of variable, but it also had a fixed cost and that you see in the fixed cost also down by 28%. And staff to room ratio through our growth, strong growth in portfolio. We've been able to redeploy a lot of our associates, give them opportunities to grow. They've all got promoted also, a lot of them. And in doing so, we've been able to optimize our staff to room ratio. And look at the one on ginger. I mean, it is really very, very, very good business model. That's why it is resilient. On safaris or palaces, it's high. So that's why my request to all the people who analyze our portfolio, please don't forget, we have two USPs in our portfolio. That is the palaces and the safaris. But they tend to mislead on the ratios when other people present. We can't run a lake palace or a Umedhavan palace or a Falaknuma and provide the palatial services, including in Rambah or Jammel and Jaipur and staff them like an ordinary business hotel or a luxury taj hotel or a luxury some other property. This is something special and unique. It drives those rates but also needs that kind of service level and the expense. And very something which we are very proud of is our ability to have reduced last year our corporate overhead by almost 40. This is something which a lot of us would not have thought is possible. We have done so. As you all know, there have been no layoffs or anything. This is also through redeployment within the group, within the system and being very, very thrift or frugal, as we said, which was a part of the RESET strategy. We think this number, and we will share that with you in the next weeks or months is the exercise which we are doing now is what was our corporate overhead per available room. And what is our corporate overhead per available room going forward or per operating room also or per operating hotel? So these three metrics, we are very confident that this number should not exceed in the short term INR250 crores and we are coming from a INR350 number. And we have more brands, we have more advertising, we have more digital presence. So I think this is something which has made us very proud. Very important, we always get this question, so what about New York? So what about New York? Yes, we have been able to restructure that lease during the pandemic. And as a result, we have a $5,000,000 kind of change in the annual savings that has come by giving away a part of our demise back to a landlord, which was the Barneys next door and redoing the banquet hall. By redoing that, we have a different cost base on the labor cost on the F and B side. Such a large ballroom was nice to have but was occupied only maybe twelve fifteen days in a year. And so I think this will help us to get to a very healthy growth in The U. S. San Francisco had turned profitable pre COVID, so we are less worried about that. Is a small property and Pierre was the issue and I think we are very happy to have this property. Definitely the two largest there are three largest lodging markets of the world. Instead of spending money on marketing and sales and whatever in these markets, if you have a real good asset, it helps drive business also into India, the inbound, which is not coming today but will come at certain point of time. So a hotel overlooking the Central Park with our flag flying there or a hotel behind the Buckingham Gate is the best advertising you can have for the brand. And I think our job as management is to rationalize the cost structure, is to do whatever is possible to get to a flat or at least a plusminus cash situation of zero and we are very confident that whenever we meet next, will be able to guide you more on that front. Strengthening the balance sheet with focus on return on capital employed. We are committed to bringing down debt to the pre pandemic level and that is our target, even taking it down further if possible so that if there is another pandemic or another downturn, we are not impacted that way. We were doing quite well. Our ratios were quite good. And then the figure that you see does include the consolidation of Cape Town, which got a significant number, but otherwise the increase in real debt terms is around INR700 crores last year or till now. So I think the management remains focused on bringing it down further to definitely pre COVID level, if not further lower. Our CapEx focus remains very selective. The Ginger Santa Cruz, I spoke about already. Taj Mahal Delhi is a very important asset for us and COVID actually helped us to renovate this hotel faster otherwise the renovation would have dragged on. There is another nine months to fifteen months of work left, but the majority of the hotel would have been renovated by the end of this year, December 1. You could safely say that 70% of the hotel would have been renovated and 30% is left. That would be a problem of any hotel that we have for a long time. The 20% or 30% needs to be renovated, a few floors need to be renovated or a few restaurants need to be renovated. So that's positive. The St. James, the coffee shop and the chambers is opening soon. And the pier, as I alluded to, the ballroom is undergoing the renovation. Return on capital employed on hotel assets on stand alone, as you can see, is positive. It's the other assets which drags it, is down. And consolidated on hotel assets, we come to 9%, but on domestic, we come to almost 15% on the return side. Reshaping the financials, I thought, Gyri okay. I kept looking because I thought Gyri was to assist, but now he says, no, you just keep going on. Okay, I keep going on. Revenue recovery, what is expected, I think what our people are plotting is like a W shaped recovery, and we feel that there'll be support coming from the domestic leisure. So March 21 was more or less the same as December 2020. Then again, May, it dropped down because of the severe impact of the second wave. June, you see it starts going up. And we feel by December, it should go up to February 20 levels. There is a as I said before, the pattern is a bit different. People are not looking which month except for weddings. There is a certain time when weddings happen as per the calendar. But if you take that out, if people are getting an opportunity, they are doing what they can. Our turnover in Q1 twenty twenty, the quarter that we just finished, should be like Q2 of last year. And the Q2 should be like the Q3 of last year. And as I said, it's all dependent on the change that could happen because a third wave came in. So because you are coming from such a low base that Q1 last year when majority of the countries were in a shutdown or were in a lockdown, the revenue base had dropped to 12% to 15% of the Q1 pre COVID level. So going to like 25%, 30%, 35%, 40% depending on which brand, which markets you are in is a given. I think that part is definitely happening when I also talk to colleagues in the Hotel Association of India or at the CII Tourism Committee level. On the spend optimization, we are continuing to work on redeployment and multi skilling. So we are working a lot on skilling people so that they can do different roles within their shift in the hotel and very, very prudent on resource allocation. And there is on the overheads at the regional level, at a corporate level, we are doing everything like a clustered approach, like shared services, like digitization to keep that cost under check. That was much needed. And I think, as I said before, the hotel industry has benefited that you have had a chance to adjust the cost base. Reshaping the financials, I think on the revenue side, we will continue to do high margin and asset light growth. So you will not see our revenues growing by if we took the pre COVID level at INR4500 crores, we are not saying it will double to INR900000 or INR100000 because that's what we did from 02/2025 and actually became loss making. We will be more focused on high margin revenue growth. So the revenue may not show as kind of exponential jumps, but the EBITDA and EBITDA margin would because of the optimization of the operational model. So operational model should help. The profitability in post COVID should go up and the balance sheet size with debt reduction and monetization of certain assets could be optimized further. On leading the possibilities, we would say there is a financial turnaround that is possible also with the help of Ginger, with the help of Reimagined Chambers with 70 new signed hotels, some of them opened but have not reached their potential because of the ongoing pandemic. Still 50 more to open as the portfolio stands today. Managing probabilities is through our reset strategy, through certain efforts that we have put in like a four d, like a Meals two Smile or Amma or Cumin. These are probabilities. Some of them could become big businesses or permanent businesses and delivering certainty by being the strongest brand, maintaining that position, a healthy balance sheet, a healthy return on capital employed, maintaining our number one position as the market leader and leveraging something which we call Taj Ness. That is leveraging the intangible or tangibles the intangible strength that we have always had for several decades in our company. Taking all this would not be possible if we don't continuously work on the culture of the organization and don't take it to the next level. So I think we have to take the organization culture to the next level. Why? Because internally, we tweaked this very famous saying of culture eats strategy for breakfast. We said culture not only eats strategy for breakfast, but eats operational excellence, which we are always very proud of as hoteliers for lunch and everything else for dinner. So continuous work on culture is of paramount importance. And I keep emphasizing the Tata values of integrity, unity, excellence, pioneering and responsibility coupled with the Taj values, which are common across all the brands. The Taj values of trust, awareness and joy. And these are all embodied in our culture that defines who we are in terms of Tajness, which on our hexagon pin, which we are all wearing in our magazines, which is called Tajness for the staff, in all our intranet feelings is the hexagon, the different pillars signify the different stakeholders, whether it's the shareholders or it's the customers or it's our employees, colleagues, associates, that's what Tajness is not just a ritual for customers. It's the way of life, the way of doing business at Indian hotels. In order to foster a culture of service, growth and performance, we will continue to reward performance. We will stimulate the culture of collaboration both within our organization but also within the industry. I think this crisis has brought the industry also together. We will encourage innovation. I think the best example of innovation definitely is Cumin or Amma. This is the people, it's the culture that made it happen. And by empowering and making an agile organization, this is possible and we will definitely retain the values of Taj Ness. Continued focus on our employees, care, we don't talk so much about it, but we did a lot for our employees. The salary cuts that we took went into touch for families. We had helplines to help people, counseling them, family assistance plan, people who passed away, 30 of our associates passed away in the last fifteen months, what we can do for their families, employment of their children, getting the people through the university education, etcetera. And the Taj for family, as I said, the monies went into Taj Public Service Welfare Trust, which was mandated to provide up to a little less than 50,000 per employee who are not our own employees. These are people who could be as an example, if there is a limousine contractor who has a contract with the hotel to provide limousine services, if he laid off his staff, we contributed to almost two to three months of salary for that staff through this fund. Of course, we did a lot for the medical staff. We hosted 75,000 room nights, which is like more than 100,000 bed nights and those 4,000,000 meals that you have seen all coming through the Taj Public Service Welfare Trust. Actually, trust was able to raise and disburse more than since the time it was founded. It was founded in the aftermath of twenty six-eleven, but what it did in last year was more than all the cumulative amounts that had happened previously. On development front, for our associates, multidimensional development so that it provides career progression, options and opportunities which ultimately leads to rewards and recognition. In order to sustain the growth that we have, the aspirational growth and all the figures that I have shown you with our colleagues, we realized that we have to work on an organization for the future. One thing is talking about so many hotels and pipeline, 300 hotels, so many brands, but we have to continuously at the same time not only work on the culture but build a sustainable organization for the future. So that is one of those focus areas. We are finding new ways of working. We have an internal program called A1, which provides this multi skilling initiative, a lot of focus on digital, dual roles and responsibilities. Those who follow us would see that some of our established leaders for two or three decades in our system are getting additional roles, new responsibilities so that they are not only growing, but they are contributing by way of their experience and knowledge to the system, everything as one IHCL to synergize more and do more and more cross functional projects. Finally, on ESG, this is very important to us. Water conservation, almost 900,000 kiloliters was conserved. Our people say that it is equal to three sixty three Olympic sized swimming pools. Greenhouse emissions on total CO2 are around 35,000, which is a very good number that we achieved. Recycling of waste, almost 1,400 tonnes of organic waste was recycled. Renewable energy, 27 IHCL hotels were powered by renewable energy, getting away from plastic to the extent possible. 15 hotels already going plastic free. One of the premium brands and companies to have EarthCheck certificate and platinum certified 47 hotels with total certified being more than almost close to 80 properties. In summary, creating value and shaping the future, it will be focused on capitalizing on the business recovery. We will also focus at the same time on new brands and new businesses so that we are able to scale them up faster. We'll continue to pursue asset light growth and also monetization of certain non core assets or non strategic assets. We still own hotels either directly or through our subsidiaries in markets that if we were to spend money today, we would never go and buy one. So I think we are happy to trade off for a management contract or a lease in return, strengthen the balance sheet, continuous focus on return on capital employed. We will like to reshape the financials coming from such a pandemic. We have to do that. Taking our organization culture to the next level so that we are not eaten up, our strategy is not eaten up And all this will happen simultaneously when we build the organization for the future. So that leads to the last slide of our investment thesis, and that is that an iconic brand like Taj and a portfolio of iconic brands that we are in the journey of creating driven by operational excellence with strong portfolio growth, at the same time with strong governance through ESG should help us become the most iconic and most profitable company which we were, which we have to sustain now during COVID and take it to the next level when we enter the tribal phase in the post COVID era. With that, thank you very much and we will be now taking questions. And hopefully, Giri, you will join me now. Ladies and gentlemen, since our Q and A session will include questions from both our investors who are here in the ballroom as well as those of you who have logged in on Webex. We shall begin with two questions from our investors in the ballroom and then have two questions from our investors who are online. Investors in the ballroom, kindly raise your hand and we'll have a mic handed to you. Those who are online, kindly show us a raised hand icon you. Shall begin the questions for those of our investors in the ballroom. Good afternoon, Mr. Chattwal and good afternoon, Giri. This is Nihal here from Edelweiss. A couple of questions from my side to start with. First is, in your presentation, you've obviously highlighted in detail about all the new initiatives like QMa and AmazTES. And while, as you mentioned in terms of revenue, they are not going to be maybe that significant, but the incremental contribution is much higher. So is there a thought about what is the potential EBITDA that these new initiatives could make up in the next three, four years? You've given a number of, say, INR350 crores for the management contract part of it. But if in your plans, if there is a number to the other initiatives, so that just help in putting a perspective to these initiatives. I'll come to my second question after this one. Thanks, Nehal for this question. I think as we said, this is an incremental cost and incremental revenue model, which means there is no CapEx. So if I sort of talk about Cumin, Cuman is a business which is done in the legal entities of our hotels, the restaurants in our hotels for instance and also the management contract hotels where food will be served. So at one level, the margin on these businesses are very high. On an order of say INR 4,000, it's a 50% margin actually because that's the way the business works. There is no incremental cost. As far as the Indian hotels legal entity itself is concerned, on every order that is sold through QMIN, currently about 22% of it is captured by Indian hotels actually, which means that to the extent that there are orders which are generated from hotels which are outside the Indian hotel system, you'll get 22. And as far as the orders generated from the hotel itself is concerned, that's a straight 50% margin. Which means if you're talking about, let's say, an enterprise, a GMV this year of, let's say, even INR70 crores as an example, then I think the probability that the profit will be about INR15 crores to INR20 crores is very significantly there for the current year. And as this grows, this number will only grow up actually. That's number one. And as far as the Amma is concerned, once again it's an asset light model. We are not investing anything at all. We collect 18%. 15% is freight management fees and 3% is a pass through for marketing expenses. That 15%, if I sort of say, if GMV is going to be, say, even on an average, if I say, it depends on the Villa. Let's say, it's a 1 crore Villa in terms of top line, 15% is INR 15 lakhs. So therefore, ideally speaking, 15% on a potential GMV of say INR 500 crores as we have said, could be as much as about INR 75 crores actually. So that's the kind of economics in both these models actually. And now what we are trying to do is to scale it up rapidly. So this INR350 crores on the management contract side is just based on the existing pipeline that you currently have? And the new ones as well because the INR219 crores came down to INR89 crores. Now this will start going back up, one based on organic recovery of business and secondly, the new management contracts that will come in. And so that's a placeholder to sort of say that that's the kind of potential that we can look actually. Just one last question from my side. On the balance sheet side, now you did mention of M and A opportunities potentially coming up. Would that be via the GIC platform? And also on your initiative of reducing debt, are there any external initiatives that you may want to consider to bring that in considering that organic achievement of that may take a few years? And finally, update on SIGGRONK? Okay. I think on as far as the M and A opportunities are concerned, I think very clearly speaking, right now, with the debt on the balance sheet, we will not kind of add to debt to sort of buy any asset actually. That's very clear. Clearly, we have the GIC platform, which can enable us to look at acquisitions. So that's number one. Number two, as we've always stated, monetization of assets has been on the agenda. And as Puneet mentioned in his presentation, the asset values last year while we tried to monetize were much lower. And now been a significant recovery in asset values. So there will be a restart in terms of monetization now and we are open to all of these to be honest actually. So we will continue to and as far as M and A is concerned, I think I don't think anything will come in the next six to nine months' time is when we expect some of the M and A activities to pick up and then we will see how we can participate in a meaningful way using the right capital and not through debt. Okay. Anybody else here who would like to ask a question? Do raise your hand. We'll have a microphone pass to you. Puneet, Sumant here from Motilal as well. My So question is for the strategy of leisure hotel expansion. So what is the mix we are looking for business and leisure hotel over five years? The second question is the MICE is critical for business hotel. How do we see a recovery in the segment in the midterm? Sumant, I think what we have to look at is not just business and leisure. So we have to do it by brand and by geography. So international, maybe I don't see any leisure hotels coming except for Dubai, which we have in pipeline. We are opening in November this year at The Palm. It will be a very large Taj property. It will be a Taj exotica. So then it comes to domestic. Within domestic, Taj will continue to be the brand that will drive the leisure portfolio. We will not be driving leisure through Vivanta, which is an upscale brand targeted at Tier one, two, three cities where it could be almost the best hotel in town, especially in Tier two and three. Ginger is not a leisure brand. It can happen to be in a market like Goa, but this will not be a leisure hotel. You can have leisure travelers. So really, Taj would drive that and Taj will continue the legacy of creating leisure destinations like it has done with Goa, with Kerala, with now Darjeeling area. And maybe very soon on the side of the Southeast Coast of the country. On that side, I think we will continue to do that. So the portfolio as a percentage may become smaller as there will be exponential growth, especially in Ginger brand. But in terms of contribution, leisure hotels will continue to contribute 50% of the revenue in the short term and maybe 40% in the midterm and 35% in the long term because the pie will become larger. And you had a second question also. The second one was on the mice. See, what we feel is that the mice segment will come back, whether it comes back in a digital way or a physical way. It will eventually come back. And maybe there is not such a big need for large gatherings, but up till now, the human behavior is not showing any difference. It's only not meeting for business, but when they go out on leisure or they go out for a kumbh Mela or they go for there is no such issues that is happening anywhere. So why would it not come back in conference business? That's the first. And even if it doesn't, then we'll have to remodel our spaces and look at other segments. For example, people talk let me take a different analogy. People talk about corporate travel going down. What is happening is the leisure or the busking segment is growing that they take families with them on a holiday where you are working three, four, five hours a day on a screen, the family is having a good time, but actually you're not working out of Mumbai or Delhi or Bangalore, you might be working out of Goa or you might be working out of Kodaikanal. All you need is a strong Wi Fi. So that's a trend that is there to stay. And I think that is more than compensating for the corporate demand. Large MICE events will be directly correlated to the percentage of the population that is vaccinated. And first of and foremost, our own staff has to be so people feel safe. I can very confident with a lot of confidence, can tell you that over ninety percent of our staff has had at least one vaccine, and very soon, they will be all vaccinated. Then the second thing is the more and more the population gets vaccinated, the more and more the mice segment will start coming back. So it's really something which is not it's really something which has to be forecasted or seen with the amount of vaccinations happening. REPRESENTATIVE:] Okay. We'll now move to our online participants. We have one hand raised. I can see Mr. Vikas Ahuja. Mr. Vikas Ahuja, you are now unmuted. Could you please switch your camera on and ask your question? You for the opportunity. Sir, congrats on becoming the number one brand, and sorry for me not making there physically this time. It's always great to meet you and give you that in person. My first question is adding to Nihal's question, the incremental revenue you have talked about, same words, human. Possible to give us any time lines on when we are planning to achieve that? And roughly, what would be the total incremental revenue? Also, I know, as you said, this could be margin accretive, the pass through is very, very high. But do should we consider that initially when you are ramping up, the margins could be lower and it will be increased over the period of time? Vikas, good to hear from you. I think currently, the way we see is around 5% from the new businesses should be the incremental revenue, which will go up to INR10 crores over the next two, three years. So if you were looking at pre COVID level of INR4500 then $4.50 is what we'll look at in three years from now through all the new initiatives that we are doing that includes the chambers, the AMA and the cumin. That's a very realistic number given on where we stand today. And based on the presentation that we showed that in three years from now, that number should be possible. Further up would need certain investments. And a concept of taking this scaling to a totally different level. If the investments were happening because the market had come back and we were cash positive, then we can scale up further and that 10% could become 12% or 15%. But this is these businesses have been chosen to drive our margin and optimize the sweating of the assets that we have. So on one hand, you're looking at revenue. And I remember in this very hall, when we had the last event, when you mentioned in the break to me that the top line is important, I said to you that look at the EBITDA. The important thing is the combined impact of that 5% or 10% growth in this top line will bring 60% flow through to EBITDA. That we don't get in a normal business. So we have to look at that's what we said, restructuring and reengineering. So restructuring of our revenue line and reengineering of our margins so that in a normal business, you would need INR 1,000 crore revenue, which would mean almost at least a minimum of 20% of pre COVID level of what we consolidated to come to INR 100 crores or INR 150 crores in the EBITDA. That would be what was happening before, right? So that is changing. So you say, okay, I don't need INR 1,000 crores. I can get to the same number by only doing INR 400 crores in revenue or INR 500 crores. Now if that doubled and became INR 1,000 crores and we could still maintain the same margin, that's when it becomes very interesting. But on that, we cannot give any guidance today. We will do that next year because that would need some form of investment coming in, which we have not planned for. Okay. Still with our online participants, we have a question from Mr. Achal Kumar. Mr. Kumar, you are now unmuted. Could you please switch on your camera and ask your question? Hi. Thank you so much, Anand. Good day, Mr. Gurri and Puneet. So I have actually three questions, if I may. First of all, could you please update on your planned capital restructure? I think last time you said that it's not a question of whether it will happen or not, it's a question of when. So where are we in terms of capital restructure? Second thing, I also wanted to understand about what sort of impact do you see from the recently announced government initiatives regarding around ECL, around offering 500,000 free Visas and all? I mean, do you see any significant impact? Or there's no impact as such? And finally, you are probably a bit more confident about the corporate demand as, unfortunately, I could not make it, but you're you're you're sitting there in the hall and and enjoying this evening or morning. So have you have you started discussing with the corporates or or the corporates have you noticed the corporates coming back regarding a renewal of their agreements and all those sort of things? So how what sort of what makes you more confident about the corporate demand recovery? No, I think as far as the equity structuring is concerned, yes, it's not a question of if, it's a question of when. I think we are in fairly advanced discussions internally. We'll come back. I think give us a little bit of time before we come back in terms of what shape and form we will take and what quantums and all that. So we will come back on that. That's absolutely true that we'll have to do this. So that's number one. Your second question, Achal, was on corporate demand. I think on corporate demand, I think what I would say is that at the luxury end, as Puneet said, it is still slow. At the ginger end, it is picking up. Right now, the corporate negotiations have been more or less on renewal of the previous rates actually. And I think my sense is as in the next few months as confidence around travel improves, you will see some start to coming back up. But in the short term, we do expect that the comeback in corporate demand will still be limited actually. And my third question was I'll around the government answer that one for you, Achal. So first, I'd like to add to what Giri mentioned on when. See, we took a conscious and informed decision as management because imagine if we had gone for some kind of restructuring before second wave and we would not have accurately assessed the needs and wants. And we have been following all the news about that thirty two thirty eight week period before the third wave comes. We are almost into it, at least for Maharashtra and Mumbai. So we want to carefully assess and then see what is the impact and how much is it that we need. So I think that's something I wanted to just add to what Giri said. The corporate demand part also I'll add that at the different segment like ginger, of course, it is becoming faster business as usual than we would have expected. What we are missing is what Sumant had asked earlier, is large meetings and incentives and conferences of corporates of 300, 400, 500 people or that 1,000 people wedding. That is what is that is completely missing, and let's see when that comes back. Finally, on the visas, I I actually find it not at all helpful because the international travel is shut. It is not open. And those 500,000 visas are only valid till thirty first March twenty twenty two. And I don't know except for the NRIs living outside of India wanting to come back to meet certain relatives or families or people who have lost some close and near and dear ones, I don't think there is such a pent up demand of people wanting to visit India. And the value of that 500,000 visas is no more than INR100 crores. So I think the good thing is that in all these announcements, tourism for the first time found place. And I think that's the beginning. At a certain point, when things begin to become normal, there will be other announcements coming because India has not been alienated from the globe. Even in India, if you add the organized and unorganized sector, the contribution to jobs is more than 10%. The contribution to GDP is more than 10%. Now somebody has to come and replace that. Either an industry comes and replaces that figure or this industry gets a kick start again so that the projected GDP growth numbers are achieved. That's my take on it. That's what I lobby for when we talk as not wearing Indian hotels hat, but Hotel Association of India or CII Tourism hat. And that is because the impact of the multiplication of jobs in this sector is significant. It's not the visas and the visa cost that is going to help. It is the jobs that are created for the guy who is running a shikara in Dal Lake or the one who is doing your river rafting boards or the one who is helping you with hiking is the rickshaw driver in Banaras, takes some tourists, European tourists around the Kashi Vishwanath Temple and gets a dollar or a euro or whatever for that ten-fifteen minute ride. There are a lot of these kind of unorganized sector jobs that are dependent on this activity and the more focus and the more attention we get from the government, the better it would be for the sector and the better for employment and better for the GDP growth of the country. So yes, from a signal point of view, positive. But is that 500,000 free visas suddenly going to drive traffic? Answer is my best guess is no. Okay. Thank you. We'll come back to our online investors very shortly. If any of you want to ask questions, please do raise your hand. But in the meanwhile, we'll come back to our investors in the ballroom. I can see a couple of you with hands raised. We are passing you a microphone. Arshana Desai from IDBI Capital. I have two questions. Sir, in your last interaction, you spoke about the international business seeing recovery from May. So you did mention that maybe the recovery is better than Delhi, Mumbai and Bangalore. Is it up to the mark? Or is there any negative surprise on that front? No, there is no negative is there a negative surprise on the international business cycle? Sorry, we did not understand. Sir, my question was that in the Q4 call, you said that maybe the international business will see a recovery from May. So you said that it is still better than Delhi, Bombay and Bangalore, our U. S. Properties. But is it you're up to the mark? Or is there any negative surprise, like you're maybe expecting 50%, 55%, we are still lagging? No. I think it's positive because it was in what I said was as a relative thing versus last year. Last year, same time, these markets were shut very badly, right? And there was negative contribution in a large extent. As we see today, they have started off better and the way they are improving in relative terms is better than Delhi, Mumbai or Bangalore because these markets have started to improve and then came the second wave. So they were thrown back, whereas London and New York and San Francisco are step by step moving faster on the positive front. Having said that, I also said that the relaxations announced in Delhi are a big help, including two days ago when they announced for the openings of bars and restaurants till 3AM in the morning. So that part is positive. And I also said that in Mumbai, it's a bit more cautious, and we are only open till four and Saturday, Sunday is shut. So the moment that opens up, I think it will open opportunities. And Bangalore bounces back quite fast. I think Bangalore, are less worried about. The more important is Delhi and Mumbai that Delhi continues and is not surprised by a third wave and that Mumbai keeps opening up slowly. Sure, sir. So my second question is that, like, there are many opportunities for management contract because of this pandemic. You said that maybe a premium property comes for the management contract. You will see where it fits in either Ginger or Vivanta selection. Hypothetically, situation arises where you need better than Ginger or maybe it doesn't fit into Vivanta. Are you open to maybe come up with a new brand into in the mid segment leisure travel? We have that. You see this on the board selections. It's a collection of hotels. So that really is made for that purpose, not try to fit a brand into another brand, which is very clearly defined. So Ginger, Vivanta, Taj are our clearly defined brands. Their Selections is more like a distribution platform where people can benefit from our sales and marketing, from our procurement synergies because we can buy materials cheaper from our website distribution, from our contracts with OTAs. If you're a part of us, then it costs you less than if you're an independent hotel. So that kind of opportunity will go then into the Selections brand, which is stretched between both mid market and up market. We have a couple of raised hands. Yes. Sir. Shobhit here sir from Anand Rathi. Sir, any update or a plan on a joint venture with GIG? No, I think the platform exists and we have been we tried last year in terms of some monetization opportunities. The pricing was not right, so we have not done it. But now with the opportunities for M and A that we spoke about, we will see how that goes in terms of using the platform, but certainly the platform is available. In the past, we had explored acquisition of a couple of properties, but those because of the pandemic could not go through. So we continue to explore is what I would say. Okay, thank you. We move back online, and we have Mr. Hitesh Mahida with a question. Mr. Mahida, you're unmuted now. Could you please switch on your camera and ask your question? Yes. Sir, thanks for taking my question. So firstly, I mean, you had a couple of interesting slides on costs. I mean, what proportion of initiative taken in FY 'twenty one are sort of sustainable going ahead once things normalize? No, I think I think as we said, we are doing a three sixty degree approach to cost reduction. Last year, we saw that we were able to reduce fixed cost by around 45%, which is a combination of both fixed and variable costs. And on the fixed cost, we had a reduction of about 28% actually. So therefore, I think there are two parts here. One part of it is some of the fixed cost reductions that we got last year were on account of some of the wage subsidies that we got and some of the force majeure concessions that we got last year. Some of those will go back. But if you look at the sustainable steps that we are taking, there is a big cost culture in the company. One of the things we are doing in the manpower is the redeployment of people. That's the biggest effort. We have, as you know, management contracts, hotels being opened up. We have redeployed about two zero six people so far. That's number one. There's a huge effort on reskilling people through a project called A1 where we are multiskilling people to do different jobs and that will help us in terms of manpower planning going forward. Shared services in revenue, in finance and HR are all being set up to sort of drive through some of those cost relation. Corporate overheads we spoke about in terms of a 39% reduction last year and that will now settle back at levels which are sustainable. And more importantly, as we expand the number of hotels that are opening up, corporate overheads will get spread over so much more actually. So I think all these efforts are sustainable. The initial efforts were more variable, but now it's getting on to much more fixed cost driven, reshaping service standards, focus on digitization. So all these are emerging and I think watches quarter on quarter to give us an update in terms of how we progress on this actually. Can you give some ballpark numbers, sir, on cost savings? I think no, wait. I would talk about it at the end we'll talk about it at the end of the quarter in terms of the progress made in this quarter, Okay. And sir, continuing on the cost front, I mean as the furlough benefits come off in U. K, U. S, how do you see costs coming back in these geographies? So as far as U. S. Is concerned, we put up a slide, which are $5,000,000 in terms of cost savings and those are three elements actually. One was the manpower saving, some permanent manpower will let go and those will not come back actually. That's almost like 25,000,000 about $2.5 $3,000,000 or so of savings which are not going to come back. That's number one. Number two is that the way we operate the hotel also. Currently, for instance, it's operated because of low occupancies without the F and B offerings actually. So that's giving us tremendous savings in terms of cost. And we'd only open that up with improved occupancies actually. So that's number two. And as far as UK is concerned, some of the furlough benefits will start dropping off after June. But having said that, we're also working the business recovery is happening. But a business recovery should get delayed. I think we are anyway planning a forty two switch from forty hour week to say thirty two hour week, which will also help in terms of reducing the cost actually. So we continue to be very carefully focused in terms of cost in these jurisdictions. Okay, sir. And on the supply side, do we I mean, are we sort of getting some pillars from the industry as to there will be drop in valuations? And are there some assets already available? And for what time frame do you think some of these assets may be available for you to think about? Yes. There are such opportunities coming up, as you've been all reading in the newspaper also. And I think we can afford to wait still. There will be more, much more coming. And the pricing level, as the gap is narrowing, is making deals more possible. But at the same time, I think still there is some benefit of ECLG as there is some benefit of other moratoriums. Once that goes away, think there will be a further price correction. Okay. Thank you, Mr. Mahida. There's anybody else online who would like to ask a question, do raise your hand. In the meanwhile, we'll get back to the ballroom for questions from our investors present here. Puneet. Hi, Giri. Thank you so much. This is Shaili from UBS. Very, very interesting presentation. So I have a bunch of questions. I think your turnaround on strategy on ginger is very, very attractive and very interesting. But we also have a financial partner here and who's been invested with us probably for a decade, right? So they might be looking for some kind of exit. So do you have a plan even in medium term? What kind of exit strategy do you have over there? It could be a value unlocking for the group as well if you tap the capital market or you take over because ginger can be a very, very interesting asset over a medium term or long term. No, I think you are right. I think Tata Opportunities Fund has been a partner for us for ten years actually. And I think there are discussions around the timing of exit for them. There are really two options for us. One option is that given the potential for Jinja in terms of taking it up to 10,000 rooms and 100 hotels, I think it could very well be a potential company which can IPO actually. Now the question is ahead of that, but not today, it may happen three, four years down the line. But ahead of that, I think there are really two choices. One choice is to really our preference, if you ask me, is whether we can just buy out that shareholding and make it 100% subsidiary. That we believe strategically has greater value going forward actually. The other option of course exists which is to get somebody else to buy them out actually. But we have not taken a call on any of these. But if you ask me, the preference is more to sort of buy them out and let's see how that discussions go forward actually. Nothing no discussions right now. But yes, it has to dovetail into what makes the best strategic sense for us, I think this is what. Okay. Just some clarification on QMin. This GMV of INR50 crores is the revenue for us, right? No. GMV is the because the QMN revenue happens in a hotel like, say, Taj Lanzan out of the restaurants, and Taj Lanzan is a hotel a restaurant in hotel in the Indian hotels legal entity. It could also happen from, say, Taj Gurgaon, which is a management contract property actually. So when we talk of GMV, it is what it is. So what happens is to the extent that the revenues happen from here, the margin of 50% flows through to us. But for others, we do collect a 22% fee from all the restaurants actually and that comes through. So if you have INR 1 crore of revenue from a particular restaurant, so you'll get INR 22 lakhs. So that's the way it works. So the blended margin is what you will get. So I said if you have about INR 60 crores, 70 crores in terms of GMV, a blended margin is what you will get actually. Understood. Just one more clarification that permanent cost saving of INR5 million on PR, is it outside of the fixed cost rationalization that we have done or it's separate or is it a part of the same? Some of it is coming through, Nana, in the sense that like the banquet, so there were three parts to it. One part of it was the manpower rationalization, which we did last year. So that continues. That's number one. Number two is the some of the lease rental savings that we did with the seven ninety five Corporation it owns. That is permanent now. It will start coming through. Came some of it came last year. Some of it will flow through from now on actually. And the third bit is the banqueting space, which we gave up, the one which was belonging to Barney's from the neighboring building and that's a permanent saving because we have given up space actually. So those are the three parts to it. So you will see this year for instance, all the three coming through in that sense actually. So that 28% reduction in fixed cost, part of is it separate out of this or No, part of it has come in the previous year. So when you said fixed cost last year INR163 crores was run rate pre pandemic, It came down to INR118 crores, which had impact of all of this as well actually. Not completely, some of it will flow through, like the banis will come this year actually. Anybody else with a question here in the ballroom? Nobody else? We do have someone. I think there is one question, yes. I reckon your asset light strategy is a permanent kind of a strategy, right? It's not a response to a crisis right now, if you can confirm that. And this fifty-fifty number, is there a map to it or will you want to go up to seventy-eighty at some point? Yes. There is firstly, it's a permanent strategy because we come from a very asset heavy past. Fifty-fifty, what you see is the total portfolio. And eventually, the day we have achieved that, it will become the total portfolio in operation also to get to fifty-fifty. So portfolio includes hotels in pipeline, so the contract type base that we have. And eventually, it will go into hotels in operation. The pipeline is already 94%. So there will always be some strategic asset, which will be 5% or 10 but the pipeline growth will be mostly asset light. And a related question, if I am a potential existing asset owner, what are the competitive advantages you have relative to, for example, a Marriott or Hyatt or a Hilton who can pitch their brands to the same guy in terms of, say, OTA exposure or distribution or See, it depends. So one is, again, as you say, international versus national. Today's biggest competitive advantage is we are with Taj especially, we are the strongest hotel brand in the world. So at least that's a force to reckon with. That's not the other names that you mentioned. Number two, we are a company with one hundred plus years of legacy, ethical, ESG, belonging to Tata Group, financing, etcetera, becomes easier if you're a partner of a group like this. Number three, we have the Pan India footprint of almost 90 plus locations, very soon maybe 100, which no one else has. We have sales offices, we have distribution network, we have procurement synergies, we have better rates or maybe the best preferred rates on the OTA platforms, etcetera. So there is a lot of talent available. There is a lot of policies and procedures, which are not like an international fit, but you have to fit domestically. Have a different accounting standards. We have different ways of doing things. So once you're a partner with us, you have a lot of benefits, but also it's a very good cultural fit. The test of relationships comes when the times become very difficult. So in the recent times, you know, I don't think you've heard anything coming from our group which went negative or wrong, but you would hear from others. So because it's difficult times, and this is a very important, our home territory is very important to us. This may not necessarily be the most important territory for others because they also have a certain home somewhere else, right? A home market of someone else might be different. So there is definitely a lot of advantage that is there for investors, for all stakeholders in working with the strongest domestic player that is available. UNIDENTIFIED Are you saying the number one choice when he is presented with the Hyatt, Marriott, Hilton and Touch? See, I don't think we want to make those claims personally. I think that is the answer customers should give. We are definitely a preferred choice because the market data, if you check the data on Goa, you take STR, which is the benchmark we all use, What is the STR data saying and how much is our revenue growth index? So you will see that our RGI in certain markets, if you do 20% more, 30% more as a brand, as a strong brand, including all international brands, they're all great brands, is very good. But in certain markets, by virtue of our location, by virtue of our heritage, by virtue of our design, we just tend to outperform anyone else by a very, very big margin. That's one. Second, what we have noticed is something I have not seen before. For me personally or us as a company, during this pandemic, people were very scared. So we did feel that we were a preferred choice. For example, Fort Aguada has been there since '70s or Holiday Village in Goa. But the kind of market penetration we saw with these hotels or with the Taj West End in Bangalore or with the palaces in Rajasthan, we always did very well. But it significantly improved in the pandemic. And that is very evident. If you look at the numbers, I don't know about the international ones, but there are companies that report results, you can always see how much is they and their revenue recovery versus pre COVID and how much is ours. And it's not coming because there is a big growth in the market on revenue, you can only grow your share. And I think we have definitely demonstrated an ability to grow our market share very strongly. And that can only come from customers. So I have not answered your question directly, but if you take the if you try to match the dots and draw some parallels, it cannot come from somewhere dropping from an unidentified source. At the end of the day, it's the customers. Okay. We can take one more question here before we move online. Is there anybody else? I see a raised hand there. Afternoon, Puneet and Giri. Rahul Arora here from Nirmal Bank. In the context of what happened with SeaRock, what were the learnings that you could potentially take forward into future M and A? We've seen what's happened with the Hayat next to the airport. What are likely to be sort of the predetermined factors that would govern potential acquisitions? Would you have a preconceived ROCE in mind before making an acquisition? Or are you happy to overpay if it gives you an entire market? I'm sort of trying sorry, I'm trying to reference it from what happened in the multiplex industry where we had a North based multiplex player that overpay I mean in the context of market valuations, we felt overpaid to acquire a very significant South India player, but was happy to draw it out because he felt he caught the entire market. So just your thought process on the learnings and how would you apply it and what would be the governing factors because I'm sure a lot is going to be thrown at you over the next one year? Thanks. No, no. See, I Rahul, I think we number one is that we continue to be asset light. So therefore, I think the bulk of the growth will come asset light, that's number one. As far as M and A opportunities are concerned, we are conscious that there are M and A opportunities. And we don't have the capital at this point of time. We can't take borrowed money to do it. That's very clear. We have a GIC platform, which we need to activate to sort of do it actually. And you're absolutely right that when we work with platforms like GIC, I think what happens is that there is automatically a return expectation threshold, which has to be crossed before you buy to be honest actually. So there's no question of overpaying for acquisitions. I think, Siroc, the learning was that the approvals, I don't think anybody anticipated that the approvals will take so many years actually. I think maybe the learning is, I think we probably won't do brownfield and greenfield to build, maybe we will hesitate actually is what I would say. I don't know whether you want to add to that. First of all, Rahul, I was wondering why no one has asked the question on C Rocks. So it's good. I think there is a key learning all the time as things keep changing and evolving. So today, as a company, would we go and buy a property in this kind of magnitude? The answer is no. Not only we would any other hotel company go and do that, I would say 95% of the companies would not do such a thing. Because for that amount, you could buy hotel companies with fifty, sixty, 70 hotels, you know, in on the asset light model because nobody is owning hotels, people seeking an exit. So why would you put all your money in one project? So this whenever this was done fifteen, sixteen years ago, driven by the success of what we did in Lands' End, it was a very normal choice. So if we took the value of what we bought Taj Lands' End for what it is worth today, then you did business that way. But buying single assets as a hotel company is not seen that often anymore in the last seven, eight, ten years across the globe. And this is a trend that is also coming very strongly on the Indian Subcontinent because all the players who have been around for thirty, forty, fifty, sixty years, that was the model that was there. You were the owner and the operator of the asset. And now that is not needed because there is enough capital available. It's not that the capital is not available. Before, you had to bring in the capital also yourself. So there is enough capital available if you can provide a good brand, good service, people are ready to invest. But in the '60s, '70s, '80s, there was no one. Now this one got done in February, but I think what would have happened at that time would have been the success of Lands' End. And also, you can't look at that property in isolation. Whenever we do something and whatever we do, it would be building the next landmark for the city of Mumbai together with this property for the next one hundred years. So would we do that on our own now going forward? No, we will not. So that statement we have made in the previous calls also. We'll bring in a development partner because as a hotel company, we are not going to make that kind of investment in a development risk, in the whole real estate development. So Santa Cruz Ginger is being built by data projects. We are not building it on our own. We would do small renovations in hotels that but previously, we used to build hotels also on our own. So that is a big shift, but a very normal shift in the sector. It's not just the Indian hotels thing, it's a sectorial shift, which has happened and will even get stronger and stronger in the years forward because we have to move. As a sector, we have to move from being a very capital and labor intensive sector. Thank you. Okay. We'll move online. We've got a question from Mr. Bharat Sheth. Mr. Sheth, you're now unmuted. Could you please switch your camera on and go ahead with your question? See, the we have a very good footprint of leisure hotels, it is growing, and it will continue to grow. And it will not grow in every brand. So I've answered that indirectly before, you want to add something? No, I agree. I think with our footprint, I think when we look at management contract hotels, I think we are not necessarily saying it's a leisure only or business only. So we look for the right opportunities or the right returns and right potential to sort of go in. So you will see hotels coming across, I suppose, in all the both leisure as well as business, actually. Last question. I answer that? Was there anything else that you asked? Maybe I missed parts of it, yes. Mr. Sheth, has your question been answered? I think as the COVID recovery from COVID has been happening, people have been taking holidays in drivable destinations to begin with. That is right. I think we saw that's how we saw Goa and a lot of these places, people driving around. But we've also seen airline passenger traffic improve as you must have seen. And you know yesterday the government announced 65% capacity back in the airlines actually. So as confidence in airline travel picks back up, I think people will be willing to fly and take holidays and we have seen that. We have seen people flying for holidays as well. So I think that should not be a constraint as we look at new management contracts around that. See, Mr. Shah, I'll add to that. When you say 200, 300 kilometers, I think most of the leisure destinations in India are covered by us within that 200 to 300 kilometer drivable distance. There are very few left which are not, but either they will get covered through the hotels which we have in the pipeline or through new initiatives that we will take, but that is definitely a part of our plan with or without COVID. Because this thing about driving and taking vacations with the family driving to a holiday is going to stay even if COVID goes away. This is how life works on the Western Hemisphere. So it will eventually also work here as the qualities of see, the government announced in its budget a significant investment in infrastructure. The infrastructure improves, roads quality improve, all these kind of destinations will start coming up and will benefit. And we are rightly positioned with all our brands to take advantage of it. Okay. We come back to our audience here at the ballroom. Do we have anybody still with a question? One last question maybe. Nobody? Okay. Mr. Giri, Mr. Chattwal, over to you, sir. No, I think, no, I must thank you all for coming and attending this presentation today. We were honestly, when we started off, we began it as a physical event and then we made it phygital. To that extent, we may perhaps be the first to have done it like a phygital event. And thank you for those who have come in and thank you for those who have kind of dialed in, not just from India, but I can see some names from outside India as well. So thank you so much. And we are of course available for any questions subsequently. So happy to interact. So thank you so much. And in terms of lunch, there is lunch organized in Salisat. So please stay back, those who are here, to sort of go for lunch and have lunch with us actually. And thank you all. Thank you. Thank you very much.

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