Q4 18/19

Apr 30, 2019

Good day, and welcome to the Indian Hotels Company Limited FY 'eighteen-'nineteen Results Conference Call being hosted by Mr. Puneet Chattwal, MD and CEO IHCL and mister Giridhar Sanjivi, EVP and CFO IHCL. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. At this time, I would like to turn the conference over to Mr. Puneet Chattwal, MD and CEO, IHCL. Please go ahead, sir. Good afternoon, ladies and gentlemen, and welcome to the announcement, and the call on the full year twenty eighteen, nineteen results. Let me begin first with certain highs and lows for the year and the industry trend. For the Indian hospitality, the demand growth has been outpacing the supply. There has been a sustained RevPAR growth and an average rate growth of 2.9% and an occupancy growth of 80 basis points. However, on the low side, the year saw the outbreak of Nepa virus, Kerala and Karnataka floods, a depreciation in the rupee and a turmoil in the airline industry. Most of the markets performed very well with the exception of a couple of markets where I would say Goa came from a very high of the average of last ten years. So there was a marginal decline, but the maximum decline was only in Kochi. And all other markets really did quite well, especially for our portfolio also. In terms of the key highlights for our performance for the fourth quarter, our revenue grew by 10%, our EBITDA grew by 21% to INR $3.22 crores, our EBITDA margin went north of 25%, an increase of two thirty basis points and an increase in profit after tax of 52% to INR115 crores. When we look at the full year, it's even a stronger performance with a 10% growth in top line to almost INR4600 crores and EBITDA of 25% increase to an absolute amount of INR913 crores and EBITDA margin of almost 20%, an increase in two twenty nine basis points and a profit after tax of INR287 crores. This is the highest profit after tax that we have posted in the last eleven years. When it comes to our pipeline, we were able to manage our pipeline as we have given the guidance based on aspiration 2022 by signing 22 new contracts amongst all our brands, in the full financial year and added another four signings, which you must have read about, a few of them have been announced in the month of April. Some of these signings are iconic assets both in both within India as well as in international markets like Dubai or London Heathrow. More importantly, we have given the guidance of having a balanced portfolio in which we would have 50% fee based business contracts and 50% lease to own. And today, as the portfolio stands, after this financial year, we've been able to increase our management contracts from 32% to 40% of the portfolio. So there is a clear shift in the business model as we go forward. The year also saw five new openings and 500 plus keys, and we have given the guidance already, in different media, forums that we will be opening a hotel four months, in this financial year. And we started the year with the opening of Siddhartha Goa in Goa. We finished last year with the opening of Simla and Rishikesh, which you see on this slide. And the ones in May and June, are going to announce and for the remainder of the year also. But we are very confident to open 12 hotels in this financial year. In terms of some of our important assets where we had been struggling and everyone was reading in the newspapers, we were able to secure a thirty three year term for the Mansingh in Delhi. We were able to relaunch, the Konamara in Chennai, and we were able to also extend our contract, with Lake Palace in Udaipur, the most photographed hotel in the world. With that, I hand over to my colleague, Giridhar Sanjeevi, to take you through some more details on the financials. Thank you, Puneet. I think this is Giridhar. I think what we have seen is that as a result of focus on execution on the aspiration 02/2022, quarter on quarter, we have seen revenues go up 10%, EBITDA go up by 25% on a quarter on quarter basis, that go up, and EBITDA margins go up. So we are so this is a consistent performance that we hope to sustain. In terms of the network revenue performance, what we have seen is on the domestic side, a room revenue growth of 6.9%, a RevPAR of 6% and an SMB revenue growth of 9.7%, which is essentially a strong performance and above what the overall industry has achieved. On the international side, we did room revenue of 9.4%, RevPAR grew by 9.3%, and SMB grew by 9.8%, once again demonstrating a strong performance. Coming to the consolidated q four indicators, our revenue grew by 10%, 2,282 crores, and EBITDA grew by 21% to INR $3.22 crores with a margin expansion of 2.3%. On the continuing on profit before exceptional items and taxes grew by 48% to INR 189 crores and profit after tax by 52% to INR115 crores. For the full year ended March 2019, our total revenue grew to slightly under INR4600 crores with a 10% growth and EBITDA grew by 25% with a margin expansion of 2.29%. Profit before exceptional items and taxes grew to INR $3.95 crores, which represents 144% growth, and profit after tax to INR $2.87 crores, which represents 184% growth over last year's INR 101. Just just on the details, I I will just highlight the key items. Our expenditure control remained consistent where our expenditure growth was about 7% as against the revenue growth of 10%, giving us the boost in terms of the leverage in terms of the EBITDA. Our finance cost, we had a substantial saving with a total annual cost of INR190 crores as against INR269 crores in the previous year. All this resulted in a profit after tax of INR287 crores. Now coming to stand alone, the Q4 stand alone was INR $8.75 crores with a 9% uplift and EBITDA uplift of 19% and a margin expansion of 3.3%. And profit before exceptional items and taxes were INR $2.43 crores, which is 25% growth and PAT of INR 165 crores, which is 152% growth. For the full year ended, the stand alone had a 9% growth with a top line of INR 2,871 crores, EBITDA of INR $8.20 crores at 20%, margin expansion of 2.6%, and profit after tax of $2.64 crores, which represents a growth of 78%. One point to note is that after a long time, the consolidated PAT of 287 crores is higher than the stand alone PAT of 264 crores, which is a good thing that is showing that the rest of the network is begin to contribute positively. Also, the same similar patterns on the stand alone as well, where the expenditure control was even better at 3% growth to 5% growth for the full year, while the revenue grew by 9% with which gave us the EBITDA uplift. And the EBITDA margin for the full year was 28.56% for stand alone, which represents a strong number. Interest cost went down. Profit after taxes were 264 crores, as just explained. In terms of debt, we did not do any incremental borrowing on stand alone. It's remained constant at thousand $7.84 crores. We continue to have liquidity, good liquidity position of INR282 crores and net debt to equity was 0.33 in standalone and weighted average cost of debt at 8.2 and net debt to EBITDA of 1.83. Similarly, in consolidated, our net debt to equity was 0.44, weighted average cost of debt was 7.2, and net debt to EBITDA was 2.11, which represents a 0.47% reduction from the opening net debt to EBITDA of 2.58. This is an area that we'll continue to focus on. These are the key highlights in brief on the financials, and we will be happy to take questions. Thank you. Dear participants, if you like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. And I would request everyone to say their name and the company they belong to before asking a question. Once again, the participant, if you like to ask a question to audio, Alright. We'll take the first question. Hi. Can you hear me? Yes. Good evening, everyone. This is Satyam from Morgan Stanley. I had a couple of questions. One, on the cost control targets that you had outlined at the CIO event last year where you had mentioned around 400 bps of margin improvement is what you expect by fiscal twenty three. And we know that in fiscal nineteen, you have had good cost control that you already kind of begun with. So, you know, if you can share any sense of how much of that 400 bps cost control target is already, you know, done in fiscal nineteen itself and how much more is there to go on that? And the second question that I had was on management contract side. We have had very good healthy run rate of, you know, new signings that we have done in fiscal nineteen and further in April as well on the new new management contract side. But we have based on announcements that we hear from global peers as well, it clearly, it seems that, you know, there is a lot of aggression on getting management contracts from other players as well. So have you seen any increased aggression in bidding for management contracts from your peers as well? And as a result, are you seeing lower fees become the norm or something like that? Any outcome of that that you're seeing in your new contracts that you signed last year? That's all. Okay. Satyam, the first one, I would go the reverse order on the management contracts. I think, obviously, when the competition increases, there would be certain pressure. But last year, we did not witness much. However, going forward, I think there could be some pressure coming on the fees by, you know, five or 10%, but, you know, the fees is worth six to 10% of the top line. So that is not a a big number. Important is to get those plain vanilla management contracts so we can have a change in our business model. And it is also very difficult to benchmark in a heterogeneous country like India as certain mega markets you could do with a lesser percentage of fees as the average rate in markets like Mumbai and Delhi and Bangalore is far higher than in secondary tertiary markets. So I think going forward, what we will do is in the next quarter when we announce the results or the following quarters, we might start doing some of the analysis by brand and by geography. So I think it's very important to know is which brand and what geography because a smaller fee on Ginger is very small versus a smaller fee on a Taj brand in in Mumbai or in Delhi. So I think that, that factor we will put in going forward. The second one is on the cost side. We did say that our 800 basis point margin expansion will come 300 to 400 basis points from the cost. I think we have a long way to go on the cost side. We have just started because the cost we are not into a cost cutting game. It's more like driving efficiencies and finding new ways of conducting business. So that itself would drive the efficiency. So I think we would have kind of started maturing on the cost side of the business in another fourteen to sixteen months as some of that requires remodeling of the spaces. It requires the remodeling of the kitchens, you know, the the whole the whole journey of, you know, from a receiving to a storage to a production to a service, supply thing. So I think all that is a very significant part of that cost journey. I think if I may just add to what Puneet has said, I think if I sort of look at the number, our raw material cost in stand alone actually did grew by 1%, and payroll cost remains flat. And for and fuel, power, and light also remain flat. So I think on all these three elements, we were able to maintain the cost. Our profit overheads also were broadly at a flat level. In fact, we were able to save some even though our top top line went up. So we continue to keep a tight focus in terms of cost function. Thanks for that. Just like one follow-up on that. Essentially, reason for the question being sparked is that this year, we have already had almost like two fifty bps of consolidated margin expansion on a Y o Y basis. And so then to go to your target of 25% margin by fiscal twenty three, the incremental run rate required is lower. So that's why one is trying to understand whether, you know, a lot of cost control has already happened this year. And going ahead, are we going to see lesser benefit from cost control? Or would you not agree with that? I think, Sathya, if you are wanting to ask us, if we want to give a higher guidance on margin expansion, then we need to wait, as we have said last year, the same. Q1 and Q2 in any fiscal year is not the time to give the guidance, because the majority of our business is in the Indian Subcontinent and what determines the performance here on absolute terms and margin terms is mainly Q3 and Q4. We remain confident that we'll be in line with whatever we have communicated and if there was an improvement possible, we'll give that guidance as we come towards September, October. Great. Thanks a lot, Puneet. Thanks, Giri. We'll take the next audio question. Yeah. Hi. This is Itas from HSBC. Can you hear me? Yes. Yeah. Sure. We can hear you. Sure. So thanks for the opportunity, and congratulations on closing FY 'nineteen at a double digit growth rate. Arun, my first question is we have been able to achieve this kind of growth after seven years. So how confident we are that we that that we can maintain this kind of growth going forward? And and also on this 10% growth, how much of this was contributed by the new rooms addition? So I'm looking for like to like growth, How much, what that number was? That's that's my first question. Yeah. I don't think there was a big impact because of the new additions. As I mentioned, two of the five hotels or three of the five hotels opened in q four. All three are on management contracts. So they are not even, you know, six months in operation. They're in a kind of a soft opening phase. That's the Vivanta and Kathmandu, the Taj in Theog in Simla, which is not in a seasonal period, and the Taj in Rishikesh, which has been in operation for less than six weeks. So I think that's the three of the five. And then there was one in Kutcher, which is undergoing serious renovations. So mainly, you can think that the 10% growth for the year is more or less like for like. I think the growth story becomes interesting as of this year where I said we'll be opening a hotel every month. And as we go forward, as I said, we'll do by brand and by geography. We will also start giving, you know, kind of comparison on like for like in total because it will have some impact on our occupancies and rates. The more hotels we open new, the more they're in the stabilizing phase, they might dilute our RevPAR or occupancy, which is very normal for a growth company. And, so that would be very important. We will start giving you guidance as of next quarter on that. Sure. Sure. And and secondly, sir, how is your direct booking shaping up? Just just if you can give us a trend in past few quarters. I mean, are we are we been able to build on our direct bookings because we have talked about the digital channel in the past. So so so yeah. Yeah. Yeah. We saw a lot of traction and improvement in our direct bookings, especially during our winter campaign, through our advertising. And and the total almost reached through our, reservation center worldwide and our own website to almost 22%, and that's quite a healthy number. I mean, there is a there is a good growth on that number. And and maybe, Gideon, you wanted to add something. No. I think 22% on the reservation network and website is a good number. And the HR, which is about the reservation office, is 48% of the business in any case. So therefore, we continue to make progress on our web strategy there and also through our R and D products. But that number, you know, in corresponding to the growth in the portfolio we'll not show much change. I think for us, it is important to keep, you know, promoting our own website, to keep promoting direct relationship with our customers. However, that's the state of the industry. I mean, it's not it's not that it's it's that others have their share too. And and actually for us, I would say it is a big help outside of our domestic markets so that our reach in places like New York, London, Cape Town, Dubai, you know, many other places is much higher when we have third party business channel possibilities to add to the revenue or to sell more room nights. Sure. Sure. Thank you. I just have one last question. One number, if you you might be sorry. I I just got, an advice from a colleague. There is one number. If you want to know overall website revenue has increased by approximately 11% for us in 1819 compared to 1718. Okay. Sure. Thank you. And sir, one last question. I mean, this quarter, the employee cost increased by 13%. And going forward, I mean, what are the margin lever left for achieving our aspirational target? I mean, that's my final question. So the payroll cost, you know, sometimes increases in a certain quarter because certain of our properties have a wage settlement. It does not happen, you know, like, on a we don't average it out for the year, so I would not like to look at it on a quarter by quarter basis. I think it's good to look at it as a percentage of revenue for the year, And certain wage settlements cost more, certain cost less. On our stand alone, there is it's just flat. There is a 0% increase in the in in the labor cost, and we don't see the trend changing going forward despite increase in wages. As we said before, we'll keep looking for new ways of business models, leveraging technology, etcetera, to remain efficient and relevant. Sure. Thank you. We'll take the next audio question. Yeah. Shreedharam from Sundaram Mutual. Sir, what was the ARR for the stand alone entity and the room revenue for the year for the stand alone piece? If you can give the number. Yeah. For the stand alone full year full year is what you're asking, Sheena? Yeah. Yes, sir. Yeah. The error for the full year was about 11,000. And the the room revenue absolute number full year for the stand alone entity? Room revenue full year number is about thousand 1,165. And, sir, the the the corporate negotiations, how did it go? If you could elaborate on what was the ADR increase that you had were able to, you know, take on those front. And how do we see the ADR shaping up forward? And the coming quarter, do we see some kind of disruption on account of the slowdown on aviation traffic or something? Yes. Just I think so the corporate business is only about 14% or so. And in terms of negotiations, we have had about 4% to 5% increase in rates. So I think which is consistent with our expectation in terms of in terms of what we say, the rate rate cycle. And in terms of aviation disruption, I think Okay. Thank you. I'll join the queue. Thank you. Can we take the next audio question? Yeah. Alright, sir. Sir, what was the occupancy expansion by 2019 and for q four? Quarter, I think it's about three to eight increase, 7¢. Profit is to in q four. Okay. And what could be the reason for the same for quarter four? What could be the reason for the same? I think I mean, no. I can't pin it down to specific factors, but definitely, I think well, there is there is one thing is, you know, in for for what we experienced was in the month of March, after fifteenth or March 16 till the March, there was a significant slowdown in pre and post Holi. That's the only thing we have seen. There there was a slowdown. There was a similar slowdown in October because Diwali was, this year a bit later, and so was that with, Holi being a bit later. But then December came out very strong, and so did January come out very strong. So March did see a did see a dip on that. And because March is thirty one days, it becomes, you know, even more relevant because February has only 28. It does have an impact if you're you lose fifteen, sixteen days in March. But in your presentation also in the month of March, if I'm not wrong, there were four or five weekends. I mean, not four. I think there were five weekends. It started let me just confirm that to you, Nast. I think yeah. The month of March started on a Friday, and it, ended on a Sunday. So there were five weekends in in that month. In your presentation, you mentioned that there is there is still a gap between the demand and supply. And for FY 02/2020, do you expect that gap to sustain, which would help me to see another good year in terms of better RevPAR? Yes. I think so. I think the supply demand gap is more structural actually because you do see new demand new supply, especially on the luxury side taking much longer to come. As far as demand is concerned, we are actually very positive on demand because of all the international passengers coming in as well as the domestic passenger traffic. We see that demand is likely to kind of surprise and supply constraints will continue to remain. So I don't think it is a one year event. It is the supply demand gap is likely to be for the next medium term, at least four to five years. Thanks, sir. So just to, you know, ask second question on the same term. Then the ARR growth for this year, it was 2.9% as per the presentation, what sir gave. So should we expect that ARR growth, you know, improve, you know, for the second half considering the second half will be a key period for the hotel industry in India? So should we expect next season be good in terms of ARR? I think what we have said, the 2.9% of the presentation is mostly overall industry. I think we have always guided to a RevPAR of about 6% plus. So therefore, I think we should continue to maintain that 6% in front of that class. So there may be variations. For example, q one may be a little different. But, nevertheless, I think 6% is a is a fair has had to go after. Right. And one last, if I can, sir, international properties did well for you this year. We have seen 10% growth in the revenues. So can you throw some light how the performance would be in FY 2020? And what was the key highlights for FY 2019 in terms of performance? I think on the international properties, all the properties did very well. In fact, I think we continue to focus on US, the peer, the captain, as well as the James Court. I think all of them have done very well in terms of business performance. Yeah. I think despite all the news on Brexit, we are very well positioned in London to take benefits. San Francisco is doing very well for us. We've been able to improve significantly the performance in PR. Dubai has stabilized at a low level. You know, it's been under distress. So generally speaking, we think the international and it started also very well. The international properties in the month of April have, till date, done quite good numbers on the top line. For us, we would be happy if this trend continues, but I don't think anybody today can judge with certain amount of, you know, confidence What is going to happen in London? What is going to happen with Brexit? What else will happen? So I think I can only say what as, figures stand today. Everything is looking good, and we feel we are very blessed to be present in the two largest lodging markets of the world, namely both London and New York. Right, sir. Okay. Thank you. Thank you, sir. I will get back in the queue. Thank you. We'll take the next audio question. I think while we wait for the next audio questions, there are a couple of questions which have come on the slide as well. Let me take them up one by one. I think question number one from Salil Garga is what are the plans for capacity addition in FY twenty? As we have clarified, we we we will we have signed a number of management contracts, and we expect to kind of, probably, say, open about every month. So if a basis that plan, I think in twenty nineteen, twenty, we should open approximately about 1,800 rooms in the in the current year, actually. No. I think assuming 1,800 to 2,000 rooms in operation this year would be would be what we can provide guidance for. Correct. The second question, which is there on Slide Assistance, how do you classify the rooms between owned and under contract? And what are the numbers historically and what has been the trend? I think the management rooms are around 4,900 out of the 17,823 rooms. And owned in ICL is about 4,350 rooms. And in the group, we own about 8,500 rooms. I think these are the two questions that I have on Slide Assist. I don't have any other question on slide assist. Yeah. Hi. This is Charlene from UBS. Yes, Charlene. I hope I'm So, Gary, if I if I heard heard it right, you said 7% ARR increase for for this quarter? We had a, yeah, we had a 7% ARR increase for this quarter, fourth quarter, stand alone. Oh, stand alone. Stand alone. He sent some console? Any sense of console is a little hard. I think we would like to look at it for in terms of the network, actually. Well, I think it is because console, what happens, Darlene, is that it gets consolidated differently. Like, Orient Hotels will cover the one liners. Mhmm. Mhmm. But but I think if I look sort of look at it from a domestic perspective, the air the room revenue did grow by around 8% on a network basis, and AirR did grow by 6.66 and a half more than 6% actually. Got you. Okay. Well, that's very impressive actually. So the corresponding number, if I if I go by my notes for last quarter was 4.6%. And and this this year, we are talking about this quarter, we are talking about 7%. And that's the reason we are seeing a significant jump in your EBITDA margin for the for this quarter in the stand alone. So there's a deflection. Your your EBITDA margin has improved significantly from last quarter in stand alone, but not so significant in the consolidated, and that's the reason for this. Great. So that's I wanna understand. So pretty much in the right direction. Most of my questions have answered. One question, I want to understand, you know, if I look at your that doing I can follow around $2.80 crores depreciation. We are doing roughly roughly $3.30. So 600 crores of cash flow without considering the working capital we're to generate, and our debt has also increased marginally. I mean, when do you think that, you know, you will start reducing the the debt? Because I don't see much of the much of the capital also happening over here. Yeah. I mean, I think we continue to be very strongly focused on debt, Shalim. I think as we saw the consolidated debt to EBITDA was about 2.11, and our debt equity was about 0.44. I think what we are now seeing is that the cash from operations will be good in terms of meeting all our requirements actually. And and then, of course, we continue to focus on whatever we can do on asset monetization as well. So while we are getting some details of that type of interest coming up in the current year, While we will you know, while we are planning to refinance, I think you'll probably see as we go forward with the monetizations also. We we could we could bring it down. Our target is to bring down the debt to EBITDA and getting to keep further during the current year. Sure. So what's the CapEx plan for this year and the coming year, FY 'twenty? The CapEx plan The CapEx plan always stays the same, which we have given the guidance. One is system wide and one is the revenue that is reported. So, basically, anything which is four to 5% of system wide revenue, our revenue system wide would be around 8,000 crores. Then you can assume three fifty to four hundred crores as the total CapEx expenditure. If you want to take only of the reported revenue, which is this year, 4,600 crores, then it will be around 250. So that's a very standard amount that we have. I think we would be operating within that level. That's a standard accepted guidance globally for the hospitality industry. Sure. Sure, Puneet. Just on the last bit, of the 12 hotels that you're talking about, all will be management contract, or is there any any of them as a part of a group or or or IFC? There is one which, if, all goes well and opens in time is the Kanot, in Kanot place in Delhi. We are hoping to open it by January, early February, so it would have been open for six, seven weeks for this financial year. Sure. Sure. Cool. That's it from my side. Thank you so much, and best of luck. Thank you, Shafen. We'll take the next audio question. Yeah. Hi, Sumant here. Sumant, Kumar from Sumanti Lab as well. So for FY nineteen yeah. Hi, sir. So for FY nineteen subsidiary EBITDA, the console minus stand alone was around 100 crore versus around 42 crore previous year. So could you please discuss the key subsidy performance, how the key subsidiary like US, UK and other domestic subsidiary like PM performance for the year and for for FY '19? Sure. I think Yeah. I think, fundamentally, I think one of the things we are focused on is to make sure that not just in the hotels, but also all the other companies do well. So if I look around the batch, I mean, I think PM hotels has definitely done better. In fact, their their performance top line went up by around 16%. I think those you will see in a subsidiary balance sheet coming through. Bruce Corporation also improved in terms of top line. Fanaris Hotel is a small company, listed company that also went up significantly. The US top line went up by actually 17%. St. James Court Hotel also went up by nearly 19% or so. That that's 7%. So I think across the batch, you will see that all the hotels have kind of all the entities have performed positively. So therefore, we will see overall improvement through the line. So when you talk about the 17% growth in US business, so is there any improvement in operating performance? Yes. There is. There is actually. There is very Could you please quantify the the EBITDA of the respective subsidiary like US, UK, and PM? Yes. Of course. Yeah. In fact, I think if I just look at the clear Camden place in St. James Court, I think the swing in performance is nearly about, you know, what do you say, 6,000,000 or so in terms of the swing. So therefore, that is a very, very strong swing in operating performance. So 6,000,000 US dollar, you are saying the swing in the EBITDA? Swing swing in the EBITDA, yes, decreased. It's a little more than 6. In fact, it's about nearly 7,000,000. So I think the EBITDA loss Yeah. On the cash level, cash profit level, that's about $77,000,000 or so in in these three hotels, which is Pier, Camden and St. Helmsford. These are the three hotels that are driving the international performance and, you know, are very relevant in our margin expansion story as well as our absolute improvement in EBITDA. So so what is the EBITDA loss for US business in FY nineteen? Yeah. Let's EBITDA loss is just under 9,000,000. 9,000,000? Plus, it's only peer and. Sorry. I think if you add, you know, the the the profit in one and offset it against the loss of the other, we are talking about a a positive of 4,500,000.0 for these three hotels together, Peter, Campton Place and St. James Court. It's around 4,500,000.0 positive. Okay. Okay. Okay. Okay. And what about the PM or EBITDA? I I think we can take that offline. I'm not sure if we can give individual EBITDA for every property. We have confidentiality clauses with certain owners and co op, and we don't want to be in that breach. Okay. So the because this hotel is owned by a corp, and we are a tenant. Okay. So talking about the q four performance of subsidiary, I think I think it is a flat the EBITDA loss was at the 10 crore and at the same level of the previous year. So what was the key reason where we have not seen an improvement in the key subsidiary like PM and US and UK? Or, sir, losses in US had increased in q four? I think maybe it's got something to do with the change in currency. Otherwise, if you actually look at the amount and put that 10 percent depreciation in the currency, it would be the same. Okay. But also this, we can get back to you by tomorrow. Okay. And talking about the for Indian hotel, we'll have what will be the impact on the Indash one one six on our return ratio and the the new accounting policy? So on Indash, we are kind of evaluating. We will have a separate conversation around the impact of India. Very speaking, under the standard, all the leases are now being classified as financial leases. And therefore, directionally, what will happen is that the lease rentals will go below the EBITDA line, and therefore, the EBITDA percentages will improve. Having said that, the depreciation and interest would come through, and therefore, this will have an impact on the PPC. On the balance sheet side, there will be a capitalization of those leases, especially where there are fixed leases actually. So this is something that we are still in the process of evaluating, and we will kind of talk separately. Okay. And, sir, in for q four FY nineteen, you you talked about the dip in occupancy by 2%. So what was the occupancy in q four FY nineteen for a stand alone business? The occupancy in stand alone for was was about seven the last year last year was about 75.8 or something like that. 76 and 76. 7674. Yeah. That's correct. '76. So this this quarter will be 74%? Correct. Okay. And the two you said the the 2% decline in your frequency and the the stand alone business have a growth of, say, ARR growth of 9% in this quarter? No. No. No. No. I said about 7% of service this quarter. Seven oh, 7% growth in ARR? Yes. For a standalone? Yes. Okay. Okay. Thank you so much. We'll take the next audio question. Hi. This is Bharat Shet from Quest. Congratulation on good setup number. Puneet, we are talking of adding around 1,800 to 2,000 rooms in FY 'twenty. So can you give some color key which brand will be more, I mean, and how do our portfolio mix will change and which geography, if you can throw better color? Yep. More almost all hotels will be domestic, and almost you can say 900 rooms will be added under the Taj brand. Okay. Another another 500 under selections. Okay. Great. And we are hoping a minimum of 500 rooms also with Ginger. Okay. Okay. And what when do we expect, I mean, that Santa Cruz ginger to come up? I mean, what is the status at this level? Sorry. I couldn't understand the question. See, we have I mean, we're working on opening a new, I mean, Ginger at airport in San Jose. So what is the status of that? So we are progressing, and we are in the final negotiation with the general contractor contractor for the terms of the construction of the property. And we are awaiting the final, you know, planning. The preliminary planning is approval has been granted. And then now we're going for the final planning. It will take at least two and a half years to open, but it will be a real flagship property with 375 plus rooms. Okay. And any color, I mean, how do we look at, I mean, ARR for FY 'twenty, I mean, overall for domestic and international business, both separately? I think you should go back to guidance that we are talking about is that 6% RevPAR Okay. Okay. And you said that up to pre Holi and post Holi, I mean, we see some dip in occupancy in Indian market, domestic. So how was the April, I mean? How was April? I think April and May, both months are significantly impacted by the elections. So for example, you do not get government delegations visiting heads of states. I think all that will start coming as of June. So there is a also last time, I'm told by my colleagues when there was elections last time, we saw similar trends. In April, we have not seen a dip versus last year. We're more or less flat in terms of revenue. May and June, we will see what happens. June June outlook looks very good. So it's only we have to say April was okay. We have to see how May will perform. Okay. Thanks. And wish you all the success. Thank you. That's all. What I will do is that there are a couple of questions which has come on the slide assist. So let me take that. One is that there's a what is what is the reason for the increase in other income? I think other income includes the the sale of apartments, about 14 crores or so. So that is kind of included in other income. Then the other thing is second question is throw some light on domestic subjectry, but that is something that we have answered in some of the earlier questions. What is the growth in foreign guest in India with respect to foreign tourist growth in India? I think I have to ask that all those consulting with SDR. Correct. Correct. Because we don't keep we get that data historically. I don't think they'll come up with that data for the last financial year. Yeah. There is a question on what is the management contract revenue for FY nineteen, and what is the total pipeline of management contracts from Deepika. I think the management contract revenue was about 157 crores or so, which is the base and reimbursement for about 66 in all beyond about $2.22 crores on management contracts, including fees actually. And that pipeline of management contracts, as we mentioned, we have we expect to open one hotel a month, and most of these are annual contracts. Of course, I think there's a question on the update on. Right? I think we we did not wait. So therefore, ultimately, we are we are not in the project. And then the other question which has come is what are the initiatives taken to increase food and beverage revenue across properties, and what are the expectations for FY '20? I think our F and B growth continues to be strong, double digit growth. This is driven by both restaurant income as well as the banker income. They continue to be very strong. So we will continue our efforts in terms of driving this. I have one more question. JV and associate performance, we spoke about guidance on 20 EBITDA margin expansion. I think it's in line with the aspiration. They will be back on ginger properties, not as yet, and that is something that is unfolding for this. I think we have another five minutes or so For the last couple of questions perhaps. Alright. To all the participants, if you find that your question has been answered, you may remove yourself from the queue by pressing star two. K. We'll take the next question. Please go ahead. Hello? Hello? Yes. Yes. That's it. Yeah. Thanks, sir. Thanks for the opportunity. Sir, can you just outline the reserve and item assets held for sale in the balance sheet? So what an what is it pertaining to as of FY nineteen around 84 crore? This is basically residential apartments. Some of these have been 10%. Nothing else actually. This is 8 crore. Okay. And this is oh, sorry. 8 crore. And okay. And this will be more these are residential apartments? This is where employees stay. You We have as you know, we have always said that we are we are selling our residential apartments where the employees are staying. We have sold about two in the last quarter, and we have sold one in the current quarter. And this is something that we will kind of monetize as we go forward. Okay. you can just provide some guidance on tax rate. Well, it has been trending downwards, but if you could just provide some color on tax rate, either at console level or at stand alone books level? I think stand alone is more relevant to look at it because I think 37% is the stand alone tax rate. I think stand alone will probably head up a little bit next year because what is what happens in stand alone is that because we take the if we take an impairment of U. S. Loss in stand alone, and this year, the losses provided were lower, and those losses do not get a tax deduction, we got a benefit where the tax rate went down from actually 48% to 37%. We expect the stand alone tax rate to probably head up to 40% or so. I think that's probably number that you should assume. I don't I mean, that is we don't get a tax rate on that. We have we have been working on. Okay. Sir, I'm just trying to understand why is it higher than the in the corporate tax rate? Is it with the especially in the stand alone? Yeah. Basically, I think basically, that's what happens. I think the 35% is the basic tax rate because we don't get a tax break for US losses, so that takes it up, actually. Sir, I'm talking about at stand alone level only on the stand alone books level. 40% is the guidance for stand alone. Right? Yeah. Yeah. Because, you know, stand alone, we you know, what happens is that to the extent that there are cash losses in The US, fund from there. Early earlier, when cash losses were funded from India, we were used to add it to the investment account. We stopped that factor roughly around three years ago. And therefore, what we do is that to the extent that there are cash losses, we check-in that, we charge it off in a stand alone P and Because it's The US loss which is charged in the stand alone p and We don't get a tax break for that. That is the reason why Okay, sir. No issues. Actually, an investment through the international. Sure. Just last question. Basically, this quarter, release performance has been quite slightly weaker. Mean, there has been losses in subsidiary come versus the fourth three quarter where we saw a healthy performance. Anything specific over there? No. Nothing nothing very specific, to be honest, actually. I think I think I'm not we didn't say anything specific in terms of subsidy. Fine, sir. It's not just that. And that's okay. Thank you. I think if there are no other questions, I think I would like to close the call. And if there is any follow on questions, don't hesitate to reach out to us, and we'll be more than happy to sort of clarify that offline. Thank you very much for your participation. Thank you, everyone. Thank you for joining the call, and we look forward to speaking to you in the next quarter. Thank you. Thank you. This concludes today's conference call. Thanks for your participation, ladies and gentlemen. You may now disconnect your line. Thank you.