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Royal Orchid Hotels Ltd. Earnings Conference Call Summary
Financial Highlights • Standalone Income: Increased by 12% to ₹198.29 crores. • Consolidated Income: Rose to ₹312.7 crores. • Consolidated EBITDA: Decreased by 3% to ₹95.16 crores due to rising operational costs and refurbishments. • Consolidated PAT: Increased by 3% to ₹50.83 crores. • Dividend Proposal: Final dividend of 25%.
Growth Strategy • Expansion Plans: Focus on adding new hotels and enhancing customer experience. • Occupancy Rates: Declined in Bangalore from 76% to 69% due to refurbishments. • Projected Growth: Anticipated top-line growth of ₹370-380 crores and EBITDA increase of ₹10-15 crores for the current year.
Refurbishment Insights • Mumbai Hotel: Expected to generate ₹100-120 crores at 75-80% occupancy, with EBITDA of ₹15-20 crores. • Average Room Rates (ARR): Estimated for Navi Mumbai hotel between ₹8,000 to ₹9,000. • Refurbishment Costs: Projected for FY '25 to be between ₹2 to ₹3 crores.
Corporate and Market Trends • Corporate Bookings: Optimism for rebound in Q2 post-elections. • ARR Growth: Projected 4-5% growth despite a dip in March. • Smart Hotels Strategy: Focus on larger assets with high returns, exploring smart hotel concepts for younger travelers.
Sales and Financing • Multi-Hotel Sales: Actively seeking buyers, with increased inquiries but no finalized deals. • Financing Conditions: Improved, with banks more willing to lend at lower interest rates.
Banqueting Strategy • Market Focus: 20 hotels with significant banqueting potential, targeting weddings and quality food offerings. • Innovative Marketing: Utilizing unique booking software and honeymoon packages.
Competitive Positioning • Growth Rates: Slower revenue growth due to a portfolio of managed hotels. • Return on Capital Employed (ROCE): Competitive compared to peers.
Conclusion • Management Outlook: Cautiously optimistic about future growth, citing stable government and favorable market conditions.
Royal Orchid Hotels Limited Q3 FY24 Earnings Conference Call Summary
Earnings Performance • Date of Call: February 12, 2024 • Standalone Revenue: Increased by 13% to INR 54.74 crores • EBITDA: Rose by 14% to INR 19.79 crores • Consolidated Revenue: Grew by 13% to INR 86.61 crores
Hotel Expansion • New Hotels: Added five hotels in Q3; total of 20 since April 2023 • Total Hotels: Operating over 100 hotels, targeting 138-140 by March 2025 • Focus: Larger hotels for revenue sharing to enhance growth
Financial Guidance • Revenue Targets: INR 350 crores for FY24; INR 450-500 crores for FY25 • Expected EBITDA: INR 110-122 crores • Management Fees: Clarified to be approximately 6% of revenue
Renovation and Operational Insights • Renovation Timeline: Varies from 2-3 months to 2-3 years; typically ready within 6-12 months • Room Count: Decrease from 6,500 to 5,800; aiming for 7,200 by March 2025
Market Strategy • Cautious Investment: Focus on observing market developments, especially in Ayodhya • Expansion Plans: Ongoing projects in Goa and Bangalore; targeting 72 new rooms • International Markets: Exploring opportunities in Nepal and Sri Lanka
Shareholder Engagement • Profitability Enhancements: Plans to introduce new upmarket hotel brands • Shareholder Incentives: Consideration of incentives for hotel stays to boost occupancy
Regional Focus • Eastern India: Signed a hotel in Tejpur; cautious approach due to economic challenges • Future Opportunities: Exploring Central India and Northeast regions
Closing Remarks • Management's Commitment: Emphasis on shareholder interests and operational excellence • Future Updates: Looking forward to sharing more insights in the next quarter
Royal Orchid Hotels Limited Q2 FY '24 Earnings Conference Call Summary
Conference Call Details • Date: November 10, 2023 • Submission Date: November 15, 2023 • Participants: Chairman Chander Baljee, COO Philip Logan, CFO Amit Jaiswal
Financial Performance • Consolidated Earnings from Operations: ₹70.08 crores (11% increase YoY) • Consolidated EBITDA: ₹18.94 crores (7% decline) • Profit After Tax (PAT): ₹7.67 crores (18% decline) • Reasons: Increased employee costs and maintenance expenses from 12 new hotels
Strategic Focus • Revenue Enhancement: Emphasis on banquet services and modernized F&B offerings • Growth Projections: Anticipated 10-15% annual growth in F&B sector • Hotel Operations Goal: Aim to operate 100 hotels by end of 2023 (currently managing 95)
Renovation and Inventory Management • No rooms blocked for renovation this quarter • Future renovations planned during lean months for specific hotels • Marginal revenue impact noted due to heavy rains
Revenue Guidance and Room Additions • Potential shortfall of ₹20-25 crores from ₹400 crore revenue target • Projected addition of approximately 1,200 rooms this year • Expected 10% growth in Average Room Rate (ARR) for Q3 and Q4
Growth Strategy • Focus on leased hotels and revenue-sharing models • Plans to add 25 hotels in the next year, with 3-4 on revenue share basis • New hotels expected to yield results in 6-10 months
Capital Expenditure and Future Developments • CapEx Guidance: ₹25 crores for Goa property, ₹15-20 crores for smaller projects • 25 hotels signed and expected to be operational within a year • Exploring sale of a stake in Multi Hotels Limited for anticipated cash flow of ₹20 crores
Shareholder Concerns • Shareholder Rajesh Agarwal expressed frustration over stagnant share value • Criticism of management for not implementing shareholder suggestions • Amit Jaiswal defended high-interest loans due to market conditions
Management's Commitment • Emphasis on premiumization in the hotel market • Assurance of alignment of management interests with shareholders • Reflection on past challenges and commitment to corporate governance
Closing Remarks • Chander Baljee highlighted resilience and tough decisions made for company survival • Gratitude expressed to participants and management for their contributions
Royal Orchid Hotels Ltd. Q4 FY '23 Earnings Conference Call Summary
Submission Details • Date of submission: June 2, 2023 • Earnings call date: May 30, 2023 • Platforms: National Stock Exchange and Bombay Stock Exchange
Financial Performance Highlights • Q4 Revenue: Increased by 84% to INR 72.55 crores • Full Year Revenue: Increased by 90% to INR 263 crores • EBITDA and Profit After Tax: Substantial growth reported
Growth Strategy • Hotel Portfolio Expansion: • Targeting over 100 hotels by September 2023 • Potential to reach 140-150 hotels by FY '24 (7,500 to 8,000 rooms) • Financial Targets for FY '24: • Revenue target: INR 400 crores • EBITDA target: INR 120 crores • Room Additions: 1,500 to 2,000 rooms through conversions and brownfield projects
Market Outlook • Positive hotel industry outlook with demand expected to exceed supply in 2-3 years • Anticipated 10-15% growth in Average Room Rate (ARR) with occupancy rates around 77% • Revenue share model expected to yield lower EBITDA margins compared to owned hotels
Investor Inquiries • Return on Equity (ROE) and Return on Capital Employed (ROCE): Significant improvement noted • SEBI Update: Interim order stayed; hearing scheduled for June 30 • Expansion Strategy: Aggressive growth plans in North India, East, and international markets
Operational Insights • Maturation Timeline: New hotels take time to reach average occupancy • Capital Expenditure (Capex): Estimated at INR 5-6 crores per hotel for revenue-sharing models • Cash Deployment Plans: Potential buyouts of partners and increased dividend payouts
Dividend Policy • Current payout: 10-12% of profits • Aim to increase payout next year
Additional Notes • Manpower-to-Room Ratio: Stabilized at 1.27 • Food and Beverage Revenue: Expected to remain around 66% of room rental • International Expansion: Exploring opportunities in Sri Lanka, Thailand, and Nepal • Brand Recognition: Enhancing Regenta brand through social media marketing
Conclusion • Management expressed gratitude for inquiries and reaffirmed commitment to growth.
Royal Orchid Hotels Limited Q3 FY2023 Earnings Conference Call Summary
Earnings Performance • Date of Call: February 14, 2023 • Revenue Growth: • Consolidated revenue increased by 37% to ₹72.49 crores. • EBITDA rose by 46% to ₹27.75 crores. • PAT before exceptional items surged by 165% to ₹15.18 crores.
Industry Recovery and Growth Expectations • Strong recovery in the hospitality sector post-COVID. • Anticipation of continued growth in upcoming quarters. • Plans to add approximately 1,500 rooms by September 2023, targeting a total of around 6,100 rooms.
Promoter Holding and Dilution • Potential minor dilution of promoter shares (1-2%). • Promoters currently hold over 65% of the company. • Any dilution is expected to be minimal and aimed at increasing market float.
Management Fees and Revenue Breakdown • Management fees recorded in subsidiary Royal Orchid Hotels, with 30% transferred to standalone entity. • Management revenue for the quarter: ₹9.7 crores; leased business: ₹9 crores. • Nine-month totals: Management revenue of ₹26 crores; leased business of ₹47 crores.
Expansion Plans • Goa hotel expansion: Adding approximately 68 rooms and a banquet hall, targeting completion by September-October 2024. • Focus on geographical growth in southern and northeastern India, and potential overseas ventures in Sri Lanka and Southeast Asia.
Financial Health and Debt Structure • Net debt reported at ₹81 crores, down from previous months. • Debt rates range from 9% to 11%, with plans for potential NCDs at around 9-9.5%.
Future Projections • Revenue target for the year: ₹290-300 crores. • Topline target for next financial year: ₹375-400 crores. • EBITDA target for next financial year: around ₹125 crores.
Management Insights • Shift in booking patterns towards last-minute reservations. • High volume of inquiries for hotel management services, prompting expansion of the development team. • Positive turnaround in the financial performance of the Jaipur hotel, now profitable for three consecutive quarters.
Conclusion • Management expressed confidence in the company's growth trajectory and the overall industry outlook.