Thank you for taking out the time to join us today. I have with m e today Janadas , who is the Vice President of Investments, Rajat Mehra, who is our CFO, and Nakul , who is VP of Investments. We also have our investor relations advisors, specifically those advisors. We have uploaded our Q1 and FY 2026 financials and presentations on the exchanges, and I hope everybody had a chance to go through the same. Our objective today is to walk through the quarter's performance, share the context behind the numbers, and give you a clear sense of where we are heading the rest of the year. Before we get into the numbers, I want to touch on a few enhancements we have made to how we report results.
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On a year-on-year basis, total income grew at 13% to INR 287 crore, EBITDA grew 19% crossing the INR 105-crore mark, and PAT rose more than three-fold to INR 19.2 crore. The broader macro environment remains robust. Office net absorption across key Indian markets in Q1 was around 14 million sq ft. That's a strong base for corporate travel demands. The four markets that matter most to us, Bangalore, Hyderabad, Pune, and Delhi NCR, which together make up over 3/4 of our income base, captured 56% of the country's total net absorption for the quarter. On the aviation side, cities like Mumbai and Delhi saw a softer demand due to the geopolitical event and also the Ahmedabad crash. The overall travel network remains healthy, with cities like Hyderabad and Bangalore demonstrating 18.5% and 9.6% year-on-year growth in passenger traffic, respectively.
I'll now pass over the mic to Rajat, who will take you through the detailed financial performance. Over to you, Rajat.
Thank you, Ashish. Good morning, everybody. Our total income for the quarter stood at INR 287 crores, up 13% year-on-year. Revenue split was roughly 42% from upper-upscale and 58% from upper-midscale and midscale. Given our current pipeline of upscale assets, including the W Hyderabad and the rest in suburban Bangalore, this number will go towards the 60% mark, giving a boost to our overall portfolio revenue per seat. When we break down income growth for the quarter, the majority of it comes from our same-store portfolio, which grew at 9.1% over the same period last year, supported by contributions from new openings. We did see a loss of INR 5 crores of revenue from discontinued operation related to asset sales in Chennai and conversion of Sheraton Hyderabad commercial space into hotel rooms.
However, once the Sheraton rooms are operationalized in H2 of FY 2026, we should see a strong ramp-up of the top line from there. On the EBITDA side, we reported a consolidated number of INR 106 crores. Our same-store asset saw a 10.4% year-on-year growth. We did see a marginal loss of EBITDA from discontinued operation, mostly related to loss of rent from Sheraton commercial space. We maintained a consolidated margin of around 37%, which is a healthy level for our portfolio risk in the seasonally weaker quarter. Depreciation and finance costs mostly remain flat. Given that the GIC capital proceeds were received towards the end of the quarter, the finance cost benefits of the debt reduction will be seen starting quarter two of FY 2026 onwards. On the basis of this, I'm happy to report that the company reported a profit after tax of INR 19.2 crores for the quarter.
Going forward, increase in the same-store revenue, new inventory opening, stronger flow through to EBITDA, and lower finance costs on the back of the GIC recapitalization will further enhance our CAC levels. Finally, from a capital structure perspective, our net debt to EBITDA now stood at—sorry, our total net debt stood at INR 1,434 crores. However, accounting for the sale of Caspia Delhi, which we have signed yesterday, this was further reduced to approximately INR 1,370 crores, entailing a trailing 12-month net debt to EBITDA of 3x. On the back of the strengthened balance sheet, our credit rating has also been upgraded by ICRA from an A- to A with a positive outlook. With an annual interest outflow of around INR 135 crores going forward, we will now see a strong free cash flow generation to fund our growth endeavors.
With this, I will now request Ashish to take you through the growth projects and the concerning figures. Over to you, Ashish.
Thanks. From a growth perspective, we are not just managing the portfolio we have today. We are reimagining what it can even look like tomorrow, building a pipeline that will transform our scale, our brand presence, and our growth registry over the next few years. Capital recycling remains core to our approach. We have signed on the definitive documents to sell our Caspia Delhi assets for an enterprise value of INR 65 crore. Since FY 2023, we've monetized over INR 210 crore of assets at an average EBITDA multiple of 20x . This, coupled with the INR 750 crore capital raised from GIC through the minority stake dilution and co-investment for STDs, has helped us raise a cumulative INR 960 crore to help us strengthen our balance sheet and create capital capacity to fund our growth.
We, at the same time, have invested or committed to invest about INR 1,000 crore towards inventory duration and repositioning of some of our existing hotels, where we target a 15%+ NOI yield. Therefore, the shift of capital from a 5% yield disposition to 15% investment will allow us to create value beyond the typical market cycle opportunity. All of this is being done, keeping a sharp focus on our balance sheet. We have over 1,000 rooms in active rebranding, expansion, and development. This includes market addition flights to Hyderabad and the Westin portfolio in Bangalore . The new rooms in the upscale segment will transform the revenue profile of the company. We also have exciting redevelopment of the Four Points assets in Pune and Jaipur, which will materially change the earnings profile of these hotels.
We have attached some of the project's progress and renders of these developments in our investor presentation for your reference, which will give you a good idea on the quality of these projects. Outside of these secure growth projects, we continue to actively evaluate additional attractive opportunities in our core markets. Expecting same-store growth of 9%- 11% and impact of new openings over the next few years, we should generate an investable surplus of over INR 1,700 crore over the next five years, in addition to what we will require to fund committed CapEx. We are seeking opportunities to deploy this towards technical M&A and variable leases. This will materially add to our existing base and augment our same-store growth. To wrap up, Q1 FY 2026 shows that our model is resilient, our markets are fundamentally strong, and our strategy of disciplined growth and capital recycling is delivering results.
The temporary net disruption is behind us, and we are tracking well for the rest of the year. Thank you for your time today, and we are happy to take questions now.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands free while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is handled. The first question is on the line of Jinesh Joshi from PL Capital. Please proceed.
Thanks for the opportunity. My question is on our revenue growth for the month of May, which is at about 4%. If I look at some of the markets like Bangalore and Hyderabad, wherein we have a very strong presence, the PRR growth in the month of May was quite strong. If I talk about Bangalore, it was up by anywhere between 15%-2 0%. Even Hyderabad, the growth was in the band of about 20%- 25%. In that context, our growth predominantly appears to be a bit low. Also, the geography that we are present in in the southern market typically was less impacted by the disruptions that we spoke of. Is there any specific reason for our growth in the month of May to be so low?
Janaya, thank you so much. No, you're right. Across the portfolio, what we've witnessed is that only the occupancies took a dip in the month of May at the height of the India-Pakistan situation for about two or three. The rates actually remained pretty strong. To that extent, we see rates continue to grow in high single digits to early double digits. That actually also reflects it you see in the April and June performance. Other than the month which was directly impacted, we have seen performance remain strong in the other two months in the same quarter, largely reflecting the rate growth. Our rate growth also has been in line with what you are seeing in the broader market.
Now, when it comes to the impact of that particular incident, we feel one of the North Indian markets, both leisure and business, got impacted because they were nearer to the conflict area. The business travel per se got impacted for that two or three weeks, which is where it has hurt us in the month of May. Other than that, we didn't see any other concerns. As I said, as you look at June, our total revenue growth went to about 12% year-on-year, which was about 13.6% in the month of April. We don't see any reason for concern. It was largely a dip in the occupancy because of cancellations, shifting of events, so on and so forth. We did not see any reasons to drop the rates because it was a very sharp impact.
Understood. Taking them, if I remember right, I think we opened Holiday Inn Express , Kolkata, in the month of May, and I think even 12 rooms at Sheraton Hyderabad. I believe in this quarter, we may have had some kind of an incremental revenue contribution from these hotels as well. Is it possible to kind of share some color with respect to how the opening response has been to these hotels? If you can maybe specifically also share the revenue numbers just for us to get some sense as to how these hotels are doing.
Yeah. So we have here, see, flight number total INR 7.3 crore was the incremental revenue from new openings. The breakup of that was about INR 2.2 crore from Greater Noida, which opened actually in the last quarter. This quarter was the first full quarter. IH Kolkata, the Holiday Express Kolkata, which actually opened only in the middle of the quarter, had just a very small revenue of about INR 0.5 crore. Trinity Bangalore, which was acquired last year, did INR 4.7 crore. The total incremental revenue was about INR 7.3 crore. If you look at the investor presentation slide number 12, page number 12, it does articulate the impact of the new openings. The second part of it is about the lease strength. Kolkata is a really good market. Our hotel is located in the heart of the new town. We actually expect a really good ramp-up.
H2 should be very good in this hotel. Greater Noida is a little. That market tends to be very heavily skewed towards H2 because of the very large event spaces in the Noida and Greater Noida market. We have recently seen that H2 is the dominant part of the year for that market. I think just the fact that this hotel has opened and started ramping up really well, we are quite excited about the performance of this hotel starting October for a six-month period, which is a peak season. Trinity Bangalore is exciting because as of 1st August , this hotel, even though it's not been materially renovated or rebranded, is now being sold on marriott.com and managed by Marriott. That transition only happened on 1st of August after we concluded some simpler renovations and IT upgrades and finalized the STU upgrades, right?
Now that the hotel is being managed by Marriott from 1st August , it's distributed on marriott.com. We actually remain plenty excited about this hotel again in H2. This was quite a bit of a pleasant surprise to us from what we had originally thought, where we were anticipating this hotel to remain status quo for a much longer duration before it was renovated and rebranded. Because of our strong partnership with Marriott, we've been able to get this to be sold on marriott.com sooner than we expected, and therefore, the results should start reflecting. Very early days, but I think generally, we are seeing a very good response. The markets are all very, very good, and that sets a good base for the current quarter, but more important for H2.
Got that. Just one small follow-up on this bit. If it is getting sold on the Marriott website, has the rebranding already happened to Trinity, and are we fetching the rates of Marriott currently, or maybe from 1st of August , are those rates that are into play?
Remember, Trinity is not the final brand. Trinity is the brand that the hotel was carrying before rebranding. This is an intermittent sale where the existing brand is distributed on marriott.com. We obviously expect to get some benefits on how we are distributing the revenue management and all of that. Eventually, the hotel will be rebranded as a part of the Tribute Collection, which is still due. This is an intermittent step. Otherwise, you can just sell this hotel as Trinity self-managed for a period of time. All we have done is made sure that this hotel is now managed by Marriott and sold on their website and part of the Bombay program. Eventually, this hotel will get fully renovated and rebranded, but that's in the future.
For now, it's fully operational with a slightly different structure that we had originally planned for and which I think will work well for this hotel.
Understood, sir. Thank you. Thank you so much and all the best.
Thank you. The next question is on the line of Samarth Agarwal fr om Ambit Capital . Please proceed.
Hey, team. Am I audible?
Yes, Samarth.
Just a couple of questions from my side. On Caspia Delhi, if we decide to rename the quarter, what kind of EBITDA was this asset making in the FY 2025 rank? Why was it the case that the asset was not doing that well despite being present in a TMR location?
There are two points. First, the hotel actually was not reducing in EBITDA. It had resulted in a net loss, operating loss of about INR 15 million.
Sorry, INR 1.5 million-INR 2 million?
INR 1.5 crores.
INR 1.5 million in FY 2025 was the net loss from this asset. Having said that, the peak EBITDA from this asset before that was about circa INR 30 million, right? So INR 30 million was the peak EBITDA. We actually put the hotel into a graded shutdown because it was not performing well. Yet the holding cost was about INR 1.5 million. The second part of your question as to why this hotel was not doing well, actually, a couple of reasons. Some which we inherently like as a company, which is poor product, lack of brand. This is a textbook study opportunity. One would argue, why have we sold the asset instead of doing what we do?
The bigger part was that while it is, when you look at it into Google Maps as Delhi, it's actually not a Delhi, where the business profile is very different to the business profile that we are used to. Number one, it is heavily driven by food and beverage. This asset was a part of a mixed-use development, which did not allow us to create the right size and capacity of food and beverage to attract what is the core business there, right? Two, we follow the two key themes of demand being driven by business travels, both office space and airline. While NCR benefits from that, not Delhi was a bit of an aberration where the majority of my customers were not really coming from the thought of businesses like utility serve.
We felt that even if we were to undertake the renovation of this hotel, which would have cost us incrementally about INR 150 million -INR 200 million and a purchase sale price of INR 650 million, if you were to look to INR 800 million of opportunity cost, and this typically falls for 15%- 20% NOI yield, we were talking about the breakup of that hotel to be in this zip code of almost INR 120 million - INR 140 million. We could underwrite that and pretend that outfit in the forecast series. Of course, I'm sure it will come at some point in time. Therefore, we felt that this is a very good candidate for extracting our capital out. We continue to find really good opportunities in core markets like the rest of Delhi, which is where we have core corporate demand: Bangalore, Hyderabad, Pune, Mumbai.
We actually want to make sure that we take the capital out from an asset where our yield will always be suboptimal and keep that capital prepared to be deployed in markets which will be far more attractive for us.
Understood, understood. Just one last question from my side. ICRA upgraded their long-term outlook recently. I think Rajat referred to that during his opening remarks as well. Given this and the recent repo cuts, what kind of stabilized interest cost are you expecting by, let's say, FY 2026? What would be the quantum of change from this reduction of interest rates?
First of all, we've already seen almost a 30% reduction in our finance costs. They've gone down from INR 195 crore to about INR 135 crore. That's about a 30% reduction. Current interest rate, which is average blended interest rate, is at about 8.5%. The third data point, which is important, is the marginal cost of borrowing. What costs are we borrowing recently? That is in the zip code of 8.2% or so, 8.2%, 8.25%, right? We've already seen that given our strengthening of the balance sheets, consistent delivering the numbers that we have indicated, leverage, of course, going down. We have moved from what used to be a really high pricing to about 8.5%, reaching incremental financing and refinancing which happened in the zip code of 8.2%. We do continue to see nothing short of 12 - 15 year financing.
There is an idea of saying 20 basis points premium to be safe for that, usually if you were to borrow a five-year or six-year financing. We know this business requires long-term financing with very little repayments in the first three to five years to make sure that from a cash flow perspective, you're fortified. We are happy to pay an ended premium for that at 80 basis points. We are at this point, 8.5% is going down to 8.25%. If you were to ask me a guidance towards where we should be towards the end of FY 2026, we think we should be targeting around 8.3%, 8.35% because there will be some legacy loans which we can refinance, but there are certain costs attached to that. The benefit of interest saving and whatever cash costs attached to that sometimes doesn't justify in the short term.
FY 2027, which is when we think we'll be more issued to deal with some of those legacy financing costs, we should target the financing to come down closer to 8.1%. In the current interest rate regime, I obviously am not qualified to comment on where the interest rates are headed, but in the current interest rate regime, we think it should be closer to about 8.1%, all inclusive long-term between 12 - 15 years.
Understood. That's all from my side. Thank you.
Thank you. The next question is on the line of Prashant Biyani from Elara Capital. Please proceed.
Thank you for the opportunity. Sir, in the presentation, you have mentioned in line as we grow SAMHI into being a market leader, and then it continues. What kind of market leadership are you looking at? Will it be in terms of number of rooms in a particular segment, or would it be about profitability or something else? If you can share some tangible, measurable benchmarks which will define your leadership.
Very good question, Prashant. Not easy to answer, but I'll try. I think one thing we want to be clear is we don't chase vanity numbers, which could potentially be the number of rooms, right? We're clearly not aiming that we will be the largest in terms of number of rooms because it all depends on the segment you're investing in. It all depends on the market you're investing in. It all depends on the quality of assets you're investing in. I think when we talk about market leadership, we're talking about our relevance within the hotel industry in terms of total revenue and therefore total profits, right? Why are we so confident about saying that we are targeting SAMHI to be a market leader is obviously explained in subsequent flows.
You know, we closed last year at a reported top line of about INR 1,100 crore and an EBITDA of INR 425 crore, our profit after tax was INR 22 crore, right? What's happening in the next three years is quite exciting. Also, even more exciting is the fact that a lot of it is already in our hands. First is the growth of the portfolio going from 4,600 rooms, you know, because of the addition of W, the Westin Bangalore, and some other projects. The second is the transformation of some of our mid-scale portfolio into the upscale portfolio.
If you look at, you know, I'll get to the flight number, basically, the installed capacity that we have in our portfolio right now, you know, and if that was to operate at FY 2025 average rate, FY 2025 RevPARs, this portfolio could have delivered about an INR 1,500 crore top line, right? Which means we do not buy anything. We don't have to use our future cash for anything else. Yet this company, without any growth in RevPARs from FY 2025 level, will get to a top line of about INR 1,500 crore, which is almost a growth of 40% from where we are right now. In the business, our target will be about INR 600 crore-INR 630 crore . Because of this growth that we are seeing, and these are investments we've already made, W, Hyderabad, Westin Bangalore, so on and so forth. You know, we've said them several times.
We are continuously seeing the same-store growth to be in the zip code of 9%, 10%, 11%. I'd like to reemphasize on that. Even though we know May was really bad, what is heartening to see is in spite of almost 1/3 of a quarter being significantly impacted, the same-store revenue growth maintained that high single-digit number, right? That only gives me a confidence that when we say 9% - 11%, we are earning on five or two quarters. Because in probably one of the worst quarters, because of a geopolitical event, we still delivered a 9%, 9.5% same-store total revenue growth.
If you were to just calculate that 9% - 11% same-store growth for the next three to five years, add the new inventory that we are committed to add, and we don't have to buy anything, we actually expect that our core revenue should get to about INR 2,200 crores -INR 2,300 crores. This whole expansion leaves us with one gift, and that is INR 1,700 crores of investable surplus. I'm talking about investable surplus after accounting for the money we need to spend to complete the W and Hyderabad and the Westin and the renovations and all of that. Now, one thing SAMHI has delivered in the past is actually growth. They've demonstrated that we have the ability to find the right M&A opportunities at the right price. They've demonstrated our ability to secure long-term leases which are highly capitalization.
One thing we suffered from in the past was our balance sheet, and that was a factor of our young company growing fast, right? Today, I see SAMHI more as a mid, I would say, a mid-cycle company which is mature, does not need to rely on external capital. A lot of all of that growth is being funded from internal accruals. Prashant, when I put all of this together, and I look forward for the next three to five years, I actually think that our target share is to position SAMHI amongst the top tier of hotel companies in India in terms of core revenue, in terms of EBITDA, and of course, it will slow down to earnings because as I said, all of this is being done from internal accrual or capital recycling and not from leverage.
You'll see interest costs being stable or going down, and everything else expanding. Sorry for the long answer to your simple questions, but that's how we articulate our statement of saying we want to be established as the market leader.
Thank you for your clarification. Secondly, sir, on CNBC in the morning, you had, if I heard you correctly, you mentioned that we may potentially transfer two assets from SAMHI to GIC platform. Sir, why would you want to transfer already established assets if that is the plan? Why not use GIC platform itself for organic greenfield growth as capital from that platform will be more patient capital than the SAMHI, if I have to say it that way?
No, no, no. Prashant, what we are intending to say is we've already confirmed that our upscaling growth will happen through the GIC platform. Obviously, I have to caveat it by saying that will really depend on the view being liked by both us and GIC, right? Assuming that is the case, the GIC platform will be the principal vehicle of growth of the upscale hotels for us. We believe there is an opportunity, and there's an optionality more than an opportunity for us to transfer one more asset to that joint venture, which will basically allow us to recapitalize that joint venture with incremental INR 350 crore-INR 450 crore and giving us the buyer power for growing that joint venture.
It's an optionality we have, and I think it is important for a company like ours to keep options to fuel future growth with that not being that option, right? Let me be very clear. Other than leverage, we want to make sure all options are available for us to grow the company in the future, and potential ability to transfer one more asset to the joint venture to recapitalize that with additional capital is just one of two options.
Okay, sir. Thank you. That's it from my side.
Thank you. The next question is on pathe line of Veer Moli from YES SECURITIES . Please proceed.
Hi, Ashish. First of all, congratulations on a strong takeoff number. My first question was on your, you had mentioned earlier that there is an opportunity for SAMHI to onboard an investor similar to GIC for your mid-scale portfolio. Is there any development on that front?
No, too early. I think there are, as I said, capital recycling is going to, how we see, will create value in the long term, feeding the market cycle. At this point of time, I don't want to talk much because there is no conversation.
All right. Regarding your Navi Mumbai litigation, have you received the outcome from that litigation? When do you expect that process to commence construction?
The matter is still under discussion. It will be unfortunate for me to raise hope. Having said that, there's no reason for any concern. We have maintained a very healthy dialogue with the administrations. We've made applications. We'd like to believe that given our merits and our credibility, we should be able to sort out all issues by the end of the year and then commence work on that project.
All right. Lastly, on your market insight.
Sorry, the markets will come to know as we formally resolve that because we'll make an announcement. That also will require us to iterate back. The losses we have taken in the past fiscal year. Don't worry. At the moment we receive a formal notification, we'll inform the markets about it.
Perfect. Lastly, on your asset recycling strategy, post-sale of Caspia Delhi, I think most of the properties remain core to our operating portfolio. Can we expect any more of that asset recycling plans in the near future? Do you think now asset recycling is more on the floor?
No, asset recycling will, on a very selective basis, we still think there are markets and assets where we can extract capital. If you look at our, yeah, I mean, I think we were, yeah, if you look at slide number 26, we had indicated about an INR 200 crore asset recycling. Our INR 65 crore is done with the Delhi sale. We think there's still a THC window open for an increment of about INR 130 crore of asset recycling in the future. No near-term guidance on that. We believe we'll get it done in the period that we have indicated, which will further bolster our ability to invest that capital elsewhere.
All right. Sir, this is related to your asset recycling of Caspia . Will any other market remain focused going forward, or do you want to focus on your core markets, that being Bangalore and Hyderabad?
No, core markets, but I'll clarify the core markets is Bangalore, Hyderabad, Pune, Delhi, Bombay, Chennai to some extent, Kolkata, all the large metros which are large office space and airline-facilitated traffics, right? Yeah, we are looking at all of those markets.
All right. Thank you so much .
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is on the line of Ashwini Agarwal from Demeter Advisors. Please proceed.
Hi, good morning. Could you just share what is the scale of EBITDA from the four operating properties that are the Kanakapura 5% owned by GIC?
Our total EBITDA from GIC assets on a trailing 12-month basis is INR 194 crore.
INR 194 crores. For the trailing 12 months, INR 194 crores. How much did you say?
Sorry, INR 130 crores. What is that, INR 194 crores?
INR 134 crores.
INR 134 crore. Out of the roughly INR 425 crore of EBITDA last year, INR 130 odd crore is from properties that are now co-owned by GIC.
That's right.
Do you have kind of a right of first refusal type of arrangement with GIC that any new upscaling property that you pursue will be jointly developed unless they pass on it or something along those lines?
That's right.
Okay. It becomes kind of a balance sheet that's available to you for a 35% capital infusion. That happens at a cost basis. It's not like you develop the asset and then you roll it down into this daily. Would that be a fair assessment?
No. Each asset will obviously present the economics of those assets. For instance, even in the Bangalore asset that we acquired recently, because of the work which had been done there, it got revalued at about a 30% premium. In addition to that, we're entitled to a development fee. All putting together, we want to make sure that the economics for our offers and our, if I use the word loosely, intellectual property to acquire is well valued. Yes, generally, any new asset will come at a ground floor level. Having said that, if we were to transfer any existing upscale asset, the valuation discussion will be afresh, very similar to what we have done for Courtyard or Hyatt Regency Pune . There we want to make sure that the valuation reflects a fair value that we need to deliver to our shareholders.
Yeah. I want to come back to the first piece that you said. You know, how do you realize the IT for locating an asset for developing an asset? You said that there's going to be a development fee that you will collect, and then you said something else, Ashish.
There are both things. There are actually three things to it. There is a development fee. There is an asset management fee, which is obviously providing a platform to the joint venture. Even though we are majority owners, the minority shareholder is benefiting from the platform that we've set up. There is an asset management fee that we charge from the platform in addition to the development fee. Last but not the least, as I said, each deal will have its own economics. Those economics may include us acquiring an asset at a point of time, undertaking certain work that we do, and then transferring it to the joint venture for which there will be a certain price. All of that will be on a case-to-case basis depending on the risk and reward profile that we see for each asset.
To summarize, I think we wanted to ensure that, A, we have access to three high-quality capitals to grow. Given upscale tends to be more capital-intensive than the rest of our portfolio. I mean, look at Courtyard, look at the Westin Tribute Bangalore. It's about INR 15 million, INR 31.5 crores per key, whereas some of all these whole assets or mid-scale and mid-cap capital are at lower INR 50 lakhs per key, right? To that extent, by the way, Tamil operates still in a bit of an archaic world. Our cost per key that we talk about for investment, I think, are stuck in time, but we are happy with that. We've seen the markets move to a level where we are finding it difficult to underwrite acquisitions. We continue to find what we need to do.
Secondly, get the benefit of a very high level of governance and diligence from a partner like GIC. Trust me, that is equally valuable as a company starts deploying a large pool of capital. We run a perpetually managed company. Therefore, it's even more important for us that when we deploy capital, we have the ability to get that tested from multiple sources. Again, I'll repeat, there is capital concentration in the upscale portfolio. When we do that jointly with GIC, if we do that, it brings an additional layer of whether or not we do it with them, one thing is certain, we get it vetted by them. I think there are many intangible benefits beyond the ability to get an additional capital.
Okay, thank you so much. All the best.
Thank you. The next question is from the line of Raghav Malik from Jefferies. Please proceed.
Yeah, hi. Thank you for the opportunity. Firstly, you mentioned in the opening remarks that because of some of the renovation at Sheraton Hyderabad, apparently, there was some impact on revenue and RevPAR this quarter. Compared to the 10% number, if you just explain to me what would the RevPAR revenue growth have been for this quarter, if you could share?
If you see, there is an adjustment of about, let me take you to the numbers I've saved. There were about INR 20 million in a quarter in fact of the shutdown of those two floors, which have been converted from office to hotel rooms. There was about INR 28 million in fact on a, if you were to compare last year to this year, which was largely the revenue from Four Points Chennai, which was sold earlier, right? If you see, there was INR 47 million of revenue from what we call sold or discontinued operations, and that's the impact. What is interesting is that just the INR 28 million or, sorry, INR 19 million a quarter loss in Sheraton Hyderabad, which will continue in the current quarter also. The rooms will open in time for, I would say, Q4, if not Q3.
The number of rooms being added is actually about 42. That's a significant increase in the inventory in that hotel, and we are adding those rooms at just about INR 5 million per key. As I told you, revenue per key today is about INR 5 million per key, right? We are actually seeing pretty different profiles from these two floors relative to the INR 19 million we used to earn on a quarterly basis, right? We think this is going to multiply multiples when those rooms are ready.
On the surface, the per enter is about, for the uptake not far revenue. You're talking about INR 1.9 crores on the EBITDA?
Country.
Yeah, yeah.
Because it was an office space, it's low space, yeah, because there were no expenses attached to it.
Okay. Okay. Understood. Just on the cost, I mean, just the cheapened, but the F&B and employee cost is not a key significant fee compared to revenue. Is there some part of this revenue momentum? Is it like a bit of a flexible fee? Anything you could say?
No, I think largely you are seeing an aberration because of the dip in the month of May. Also, what has happened is that we have these new hotels which have opened. When the new hotels open, there is some bit of a pre-opening expense, which gets into the P&L because, you know, in the first quarter of a hotel, they will end up designing expenses and all of that. A combination of the pre-opening expenses and the pack for the new hotels, which is Kolkata and Greater Noida, and the fact that we had a current dip in the month of May, which was obviously, if it was known earlier, one would have taken corrective action because the dip happened for about two to three weeks. No, we couldn't take a corrective action. That's why you see some bit of a change in the cost.
Otherwise, on a normal basis, you're not seeing any concerns on either of those two cost line items.
Thank you. Okay. Understood. Thank you. Thank you and goodbye.
Thank you.
Thank you. The next question is on the line of Rajiv Bharti from Nuvama. Please proceed.
Yeah, once again, thanks for the opportunity. Thanks for sharing the detail on Great Bombay in terms of the sources. In that, can you explain row L60? There's corporate income, which is INR 139 million, and the overall net corporate G&A is basically a positive number. How is that coming?
Hi, this is Rajat here. This is a one-time index income, which is on account of conversion of a convertible instrument that we had in one of our subsidiaries to equity. This is at the time when the money evolutionary came, there was a total breakup of that money, which was done into an equity portion and also in terms of the liability. That liability had a certain number, while the value of the instrument while it was converted was lower. The liability had to be actually written back. That's the one-time adjustment in the entry that is appearing in the corporate income. Rajiv, what is also important is, and sometimes we under-index only a partial viewer there.
While there was a one-time income because of the GIC transaction, and that was because in Athens Hotel, where GIC participated at 35%, there was an earlier minority investor where he had a convertible instrument, which was headed. There was income came. At the same time, interestingly, there were expenses also, which were with respect to the GIC transaction, right? Unfortunately or incidentally, they don't reflect in the separate line item. Those expenses are largely on account of the ROCC. Because we had taken equity investments in these subsidiaries, and in some of the subsidiaries, we had to increase the authorized capital. There was also another INR 200 crore of incremental expense that came because of the GIC transaction. These expenses income are all with respect to the GIC transaction in the last quarter.
In regard to Caspia and Greater Noida, which you had converted, what was the total capital employed? I mean, to start with, and what was the conversion required? You said for New Delhi, you said INR 80 crore. I remember in QC, you had said that it's INR 10 lakh per key. I thought it was, no, INR 12 crore, INR 15 crore of.
The renovation expense in New Delhi would have been about INR 15 crore-INR 20 crore. INR 65 crore is the same price. When we look at opportunity costs, we had to decide today that if we hold this asset, we need to at minimum solve for a 15% - 20% ROC on what is the opportunity cost of the INR 65 crore and the incremental capital being deployed, right? We were comparing it to total opportunity cost, not just the renovation. The renovation cost will be in the zip code of INR 15 crore-INR 20 crore, which is for a 142-room hotel. That's about INR 10 lakh per key.
Total capital employed is INR 23 crore.
INR 23 crores.
As in 125?
Corporation audit, total capital employed is INR 23 crore.
What is the annualized ARR? INR 4,070, percent of occupancy? How is it plotting?
For Greater Noida, yeah, Greater Noida, you will underwrite at about INR 4,000 occupancy of 70%-72%. That is what you would underwrite for Greater Noida.
That asset is a 40% ROC in terms of.
Yeah. ROCs in Holiday Express tend to be very high. I mean, if you look at, for instance, Holiday Express, HITEC City , Hyderabad, FY 2025 ROC will be an equal rate of, but should be upwards of 40%, right? That's what we are kind of trying to explain, that when we are extracting our capital from some of the assets where after all the hard work and INR 65 crore sale price, INR 15 crore renovation, we would have gotten to, let's say, barely 10%, we find that the same money can be taken in another asset where potentially there's already much, much higher ROCs. You're absolutely right. Capital employed in some of these assets is really low.
The external question is, let's say, if you were to sell this asset for INR 70 crore, that is, I mean, you're not hooked on to that 40% ROC, we will milk it for some more years or however. At least INR 70 crore or INR 80 crore, it's sellable, right?
If that's agents per se, I think the question we'll ask ourselves is, at the sale price and plus incremental CapEx that that hotel may require, what is the sort of EBITDA we can generate? To give us reasons of the asset, let me be very clear. People should not expect that we'll keep buying and selling hotels. That's not our job, right? We would, as a management team and a board, on a periodic basis, take a call on if our investors' money is invested in the right asset, and if there is a better opportunity to deploy that capital. At this point of time, we were very convinced, and the sale of Caspia Delhi was debated at board for two board meetings, right?
We realized that we have to take a call of this INR 65 crore that we're receiving from Caspia sale, plus what we would have invested of about INR 15 crore-INR 20 crore in renovation. What should we do with that CapEx? Get it invested in Caspia, remain invested in Caspia, or take it elsewhere? Just the ROC profile told us that what we have as an opportunity, let's say in Hyderabad or Bangalore, is far more lucrative and with a huge margin of safety. Therefore, the call was humongous. Other than that, you know, we're not short-term traders of assets. We believe Greater Noida is only going to grow from the current level. It is the start of the Delhi-Mumbai Express Ring. The UP government has taken substantial steps to increase the industrial activity in Greater Noida.
We are sitting on an asset with a capital employed of INR 23 crore. We therefore feel this is a prime asset which can potentially help us overall improve the ROC profile of SAMHI. I mean, it's a small asset, but each small asset contributes to the future success. I think Greater Noida is a market that, as of today, we remain very excited about. I think it's just the start of the performance of that market.
Perfect. Thanks a lot for the explanation. All the best.
Thank you.
Thank you. The next question is on the line of Sardar from Fidelity International. Please proceed. Mr. Sardar, your line has been unmuted. Please proceed with your question. Did your note respond? We move on to the next question. The next question is from the line of Yesavar from IIFL Capital Services. Please proceed.
Hi, thanks for the opportunity. I'm interested in looking at the total revenue under the name of the reason that SMB revenue growing at around 7% versus the rest quarter of growing at 13%. Is it fair to argue that SMB revenue is going to grow in the similar line? If not, then what are the steps taken by us to improve it?
In the past few quarters, we had seen that SMB was a bit of a drag on our same-store growth. This time, we've seen that while in the same store, we have seen a total revenue growth of about, let's say, 12% in upscale, 11% in upper mid-scale. That's not growth. Room revenue growth. SMB growth was in the range of about 7% - 8%. That has led to the total revenue growth of about 9.9%, 10%. SMB growth is in line to what we expect. It is slightly lower than the rest of our growth in the current quarter. This is a quarter when a lot of events don't happen. Don't forget, a large part of our SMB income in our hotels is driven by corporate demand, MICE, and similar events. Unfortunately, because of what was happening geopolitically, those are the events which take the biggest hits.
We have seen a reasonable growth in food and beverage. Our mid-scale, interestingly, where you see our dependence on MICE is less. The SMB growth actually has been pretty decent.
I see. Okay, sir. If I look at the presentation, is it given that we are going to be capable of around INR 350 crore between FY 2026 and FY 2030? Can you please give me year-on-year numbers for FY 2026 over FY 2028?
Year-on-year, we are currently estimating an annualized capital expenditure of circa INR 175 crores-INR 200 crores. It's quite well spread. This year, our capital expenditure is largely towards completion of the additional inventory in Sheraton and Hyatt Regency Pune , the work that we're doing in W, Hyderabad. That work is largely done this year. Next year, total W expenditure, for instance, is about INR 175 crores-INR 180 crores. Sheraton and Hyatt Regency Pune, large part of capital has been invested already. Only some is pending over the next month and a half, two months. Next year, we will see again the same run rate of about INR 180 crores -INR 200 crores. That's towards commencement of work for the Westin Bangalore, the conversion or completion of W, and commencement of work for the conversion of Pune and Jaipur assets.
A year after that, we'll continue to see the investment in the W in Bangalore and completion of the renovation. Annualized expense will be on an average of about between INR 180 crores-INR 200 crores.
Okay, sir. Speaking with clear. Just the last question from your side. On the expansion plan, how is it going for the expansion plan that we have announced for records limited sales? When can we expect that to go live? The same question for the W Hyderabad as well. If you can share with some additional numbers on the W Hyderabad, what is the revenue or EBITDA per seat that we are expecting?
Okay, so let's go year by year. This year, we are ready to open the additional rooms in Sheraton and Hyatt Regency. Total inventory in between these two would be about 75 rooms. Current revenue per seat for these hotels is going to be about INR 50 lakhs-INR 55 lakhs per seat. You can say that about 75 rooms at, so that's about INR 40 odd crores. Sorry, 75 rooms into INR 5.5 million for this year. So about INR 41 crores annualized impact. Because these are incremental inventory in existing hotels, we expect a closer of about 60%. Almost 60% of that, at minimum, will get thrown down to your EBITDA, right? That's about INR 25 odd crores on an annualized basis. The W Hyderabad is progressing quite well. The work is happening on, it's a real building, actually. It's more a retrofit project.
We've started the work on site. The design development is largely done. This market is really good, our competitors. We have a Sheraton in Financial District, which is about half an hour away. Typically, Financial District sells at about a 15% - 20% discount to H ITEC City. Just the Sheraton itself is selling at a similar revenue per key. In this case, yeah, INR 35 lakhs odd per key should be the revenue profile. You should expect an incremental revenue of INR 110 crores from this hotel. Caution, this hotel opens in FY 2027. We should expect that FY 2028 is a plus for the year of operations for this hotel. Market demand is very, very good. No new inventory getting added. Office sales growth continues. We actually expect that the revenue per key will continue to grow in this market as we open that hotel.
We should remember that the Trinity Bangalore, which was doing approximately, and I couldn't tell you, INR 20 crores a year top line, we actually expect that hotel to at least show 30% growth in the next one month, let's say, not in the current fiscal because the Marriott management has only started on 1st of August. For the next NTM-based days, September till next August, we actually expect that revenue from that hotel without any renovation or rebranding should grow at about, actually, things are measured at 25% - 30%. That's really the near-term project. In the future, we're very excited about as we open the Westin Bangalore, that market is very strong. That hotel could be at least 220 new rooms added to the current Trinity.
That market is easily in the same zip code of about INR 5 million -INR 6 million or INR 50 lakhs -INR 60 lakhs per key total revenue.
Thank you. The next question is on the line of Sardar from Fidelity International. Please proceed.
Yeah, can you hear me now?
Yes, sir.
Yeah. No, my question was around the SMB growth for the quarter. I think you answered it in the previous question, but could you just tell me again the SMB growth? I also wanted to understand on the initiatives which you have been talking about in SMB for the last few quarters. You were talking about the SMB growth could be better in the future. I just wanted to understand how are those things going and what is the SMB growth we can expect in the future?
Yeah. The SMB growth for the last quarter was about 8% year on year. This was in spite of the meeting spaces in Hyatt Place, Gurgaon, Sheraton Hyderabad, and partly in Hyatt Regency Pune, being provided for collective renovation. All these three spaces will be ready to actually, Hyatt Place, Gurgaon will be ready usually in the month of September. By the end of September, that place will be reopening for business. Sheraton Hyderabad should get done by October end. The same is the timeline for Hyatt Regency Pune. Hyatt Regency Pune is much lesser in convention, actually, than the rest two. We actually expect that in H2, when the three of our upscale hotels have their refreshed boardroom spaces, we should expect the SMB revenue growth to start comparing to the rest of our growth, same store, which is in the zip code of less than 10%- 11%.
SMB growth should grow from current 8% to about 10%- 11% due to those changes. Did I answer you there?
Yeah, thanks. That's all from my side. Thank you.
Thanks.
The next question is on the line of Marav Sheth from Quest Investment Advisors. Please proceed.
Hi. Thanks for the opportunity. I think my one question is that what level we are doing? While in new property, GIC management team, I check.
Marav, I don't know if I can hear you properly. Can you come closer to the mic?
Given no response, we move on to the next participant. The next question is on the line of Pranav from PINC Wealth Advisors. Please proceed.
Hello?
Yes, Pranav.
Yeah. Hi, sir. I just had a couple of questions. Sir, going forward, can we expect our debt to be around the range of INR 1,380 million at the end of this year?
Yes. I think your net debt will remain in the zip code of INR 1,400 crore. That's the INR 1,400 crore. There will always be quarterly shifts in the cash because of the CapEx. I would think we should maintain our INR 1,400 crore of net debt.
INR 1,400 crores of net debt. Sir, as per your slides, can we expect around INR 60 crores of debt being repaid every year, let's say to the FY 2050?
Yeah. There is a total reduction of about INR 300 crore over the next five years, and that is as per the current contracted payment schedules. There's some refinancing in place. The total repayment is about INR 300 crore over the next five years.
We expect about INR 60 crore net repayment every year?
Every year. Correct.
Understood. Secondly, sir, could you throw some light on our corporate G&A expenses? Is that like a percentage of our revenue, or is that expected to remain in similar lines?
Yeah. If you see, a large part of the corporate G&A is actually the salaries and wages of the corporate employees. For FY 2026, those salaries and wages are seeing a marginal growth of about 3.5% over the last year. We have kind of maintained the corporate expense growth at a significantly lower level than where the revenues of the companies are growing. We always believe we were well capitalized in terms of steam for a much larger revenue base, so that's reflecting now. That's the salary and generator, which is a large part. Rent and administrative expenses remain very stable. We're not seeing any significant growth in the corporate G&A revenue.
Understood. Sir, for the polyacrylics, just around INR 10 crore of ESOP expenses?
Of what?
ESOP.
Yeah. That's already accounted for in quarter one also. If you see both the note on the financial summary slide and the Excel sheet that has been uploaded on our website, INR 2.4 crore per quarter.
Okay. Thanks, sir. For FY 2027, can we expect the ESOP cost to come down?
Based on the current grants that have been approved by the shareholders, it will come down from INR 24 million a quarter to INR 10 million a quarter. You know, we need to be mindful that the NRC may recommend, if at all, any ESOP. At this point in time, you're right. It will go down from INR 24 million to INR 10 million a quarter.
Should we maintain that for one last?
What I'm saying is beyond FY 2027, we should maintain that, right, about that number, about INR 10 million.
Thank you. The next question is from the line of Marav Sheth from Quest Investment Advisors. Please proceed.
Hi. Thanks for the opportunity once again. First question is that what does the inner GIC platform for new property from W we select the site? If you can give a little more color, what are the other GIC activation kind of ROI on marketing platform? How do we measure our interest as minority?
My apologies. I'm not able to, the line is not here. I'm not able to react to that.
Hello?
Sorry.
Do you really involve GIC for them to come and pick up a particular asset? What's the kind of return profiles you look at when we decide?
Okay. I think, Rajat, thank you, Rajat. Please take two questions. One is at what time do we decide to go to a partner like GIC? The second is what sort of a return profile do we underwrite for new acquisitions, correct?
Correct.
Okay. Thank you. In the timing of the discussion for new acquisitions, we will remain in real-time discussion with GIC and upscale assets. Joint ventures specifically focus on upscale. As we look at evaluating opportunity in the upscale space, we will in parallel discussions at opportunity space with GIC. That's our contract. In terms of returns, we typically underwrite a mid-steam return on capital employed or NOI yield. For us, NOI yield in initial years is a more right indication because it ignores deficit in both the numerator and denominator. ROC is important because that's a real return in the long term. We look at both the numbers, but we solve for a near-term NOI yield of about 13% and a long-term ROC of 13%. The gap between the two will be about two years or so.
That's the sort of basic underwriting that we do when we look at deploying fresh capital.
How do we manage, I mean, the interest of both, I mean, our minority shareholder SAMHI as well as GIC?
No. See, both in all fairness, our interest is protected because we are responsible for deal origination and underwriting. Therefore, we would like to believe that we will only pursue opportunities which work well for our shareholders. When it comes to GIC, it's a very high-quality institution. Therefore, when we take the opportunities to them, they obviously look for their own point of view, in terms of how they solve recurring returns and the quality of assets. The good thing is that it has therefore gone through a dual lens of governance, one at SAMHI's level and our board and our investment committee, and two from a GIC perspective. The case in point is the Trinity Hotel in Bangalore, right, where first we acquired it, and obviously it went through a fairly detailed discussion and diligence at our end. We paid INR 205 crore for acquisition of that asset.
We believe that asset in the future is INR 100 crore potential EBITDA against a INR 600 crore total investment, so it kind of follows our return profile. Having said that, a few months later, this was again re-vetted by the GIC team. Therefore, that company has their 35% stake, which will be issued to them at a value, free money value of about INR 275 crore, right? That really reinforces our purchase price selection and decision that what we pay for that asset is well appreciated by a very high-quality institutional investor who themselves have multiple layers of vetting and opportunity. I think rest assured, when we are deploying capital, we are making sure there are multiple layers of validating what the opportunity could be.
I will reiterate here that if you look at the cost per key that we have committed, let's say in W Hyderabad, which will be less than INR 1 crore per key, or a Westin Bangalore, which will be about INR 1.6 crore per key, it continues to remain at a significant discount to both replacement cost, which is the cost at which you will build similar hotels in the same location, and the market price per key that we have seen for private transactions, which in the upscale space has remained upwards of INR 2.5 crore, going up to INR 3.5 crore-INR 4 crore per key. We do believe that, you know, in the long term, we are creating value for our shareholders by keeping to our discipline of investing our capital at a significant discount to replacement cost.
Okay, thanks for the detail now. Sorry I'm out of date.
Thank you. The next question is on the line of Smith Gala from RSPN Ventures. Please proceed.
Thank you for the opportunity. My question was related to the employee expenses. We have seen a slight uptick in the run rate. Can you throw some color on it? Can this run rate hold for the full year without any increase?
We've seen a discount for.
If you compare on the front, say the financials, basically, employee expenses have gone from INR 175 crore to INR 216 crore, right? That is on account of the new hotels, which is Regenta Inn Larica, Kolkata, right?
And Trinity.
A large part of that growth is on account of actually the addition of new hotels. Obviously, because these are new additions, they're not reflecting their true potential of performance in the revenue. In the short term, you'll see, even as a percentage, that number moving slightly up. Otherwise, on a same-store basis, we're not really seeing any reasons for concerns in terms of employee expense growth, you know.
Okay. That was helpful. Secondly, the room revenue to total revenue for this quarter was approximately 79%. The same number for the quarter one of 2025 was 71%. Can you throw some light to see why the room revenue, as a percentage of total revenue, is increasing? Can it improve going forward?
Yeah. That's because of the shutdown of two ballrooms, which is Ibis Gurgaon, Sheraton Hyderabad. A large part of that impact is that. Also, the fact that we've opened the Holiday Inn Express in Kolkata and Holiday Inn Express in New Town, Kolkata. Holiday Inn Express hotels, typically, you'll see room revenue being 85% - 90% of total revenue. A combination of two upscale hotels' ballrooms being in renovation and then incremental revenue coming from a portfolio which has a much higher room-to-total revenue ratio, that has led to that 71% becoming 79%. In the future, as those ballrooms become fully operational, as Trinity Hotels ramps up, which has good food and beverage, we actually expect to maintain close to 70%, if not better. When I say better, it means more coming from food and beverage, room-to-total revenue ratio.
Okay, thank you. That was it from my side.
Thank you. To you, to the design council. That was the last question. I now hand the conference over to Mr. Ashish Jakhanwala for his closing comments. Over to you, sir.
Thank you, everyone, for your time. We did enjoy the interaction today. I just want to reiterate that, you know, we remain fairly confident of how this year and the future of SAMHI i s shaping up. You know, I know there's a lot of discussion about the month of May, but whether it's April, whether it's June, or if there's a subsequent period after June, we are continuing to see a very comforting growth. We are very, very happy about the ability to deliver on asset recycling. You know, that's an activity where we'll likely rely on a counterparty, and we've been able to execute that in time and at price that we expected to.
The balance sheet that now we've created for ourselves, what used to be considered a weakness for SAMHI's t wo-year past, we had a promise that we convert that to be our biggest strength. I think we are well on our way to deliver that. My belief is that that strong balance sheet and our discipline will create the future value for SAMHI . Thank you very much for your support. We look forward to continuing to interact with you and talk to you at the end of quarter two, if not earlier. Thank you so much.
Thank you. Members of the management, on behalf of SAMHI Hotels Limited, that concludes this question. Thank you for joining us, and you may now disconnect.