Q1 2027 Ventive Hospitality Ltd Earnings Call
Speaker #1: Ladies and gentlemen, you have been connected to Ventive Hospitality. Please stay connected—the call will begin shortly. Thank you. Ladies and gentlemen, welcome to the Q1 FY27 conference call hosted by Ventive Hospitality.
Speaker #1: As a reminder, all participants currently on the line will be in listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes.
Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded.
Speaker #1: I now hand the conference over to Ms. Aishwarya from PR, Investor Relations Department at Ventive Hospitality. Thank you, and over to you, Ms. Aishwarya.
Speaker #2: Thank you. Good evening, everyone, and thank you for joining the earnings conference call for Q4, ended June 30, 2026. Our financial results and investor presentation have been published on the exchanges, and the information pack has been placed in the investor relations section of our website, www.ventivehospitality.com.
Speaker #2: Before we proceed, I'd like to highlight that management may make certain statements that could constitute forward-looking statements. Please be advised that actual results may differ materially from these statements.
Speaker #2: Ventive Hospitality does not guarantee these statements or results and is not obligated to update them at any point in time. Specifically, any financial guidance and pro forma information that we share on this call are management estimates based on certain assumptions, and have not been subjected to audit, review, or examination procedures.
Speaker #2: Joining me today on the call are Ranjit Batra, Chief Executive Officer; Parish Bafna, Chief Financial Officer; and Shoaib Sharif from the Investor Relations team.
Speaker #2: We will start off with brief remarks on our business and financial performance, and then open the floor for Q&A. Over to you, Ranjit.
Speaker #3: Good evening, and thank you all for making time to join us today. Let me begin with the external backdrop that shaped this quarter: the single most important external variable for our Maldives portfolio.
Speaker #3: Shipping disruptions through the Straits of Hormuz have been pushing crude, jet fuel, and diesel prices sharply upwards for us. In April, we saw the first disruption in Maldives inbound tourism.
Speaker #3: And then recovered strongly through May and June, ensuring our Maldives revenue still grew by 5% year on year in the quarter. The more material effect was our cost base.
Speaker #3: Through a sharp rise in Maldives fuel cost, which has been addressed shortly. Coming to India hospitality, in India, our business delivered a strong quarter yet again.
Speaker #3: Revenue grew 13% to ₹203 crore, supported by resilient corporate demand. Strong MICE activity and a premium ledger led our Pune, Bangalore, and Goa assets to perform considerably well.
Speaker #3: India grew 16% to ₹74 crore and, most importantly, our India margin expanded to 36% from 35%, even after absorbing higher power and wage costs during this quarter.
Speaker #3: This reflects the operating leverage inherent in our portfolio. Pune, in particular, continues to validate our long-standing thesis—it's now India's fastest-growing GCC hub.
Speaker #3: And with very new or limited supply in hotels, which leaves our top-tier assets structurally well placed on both rate and occupancy. I would also like to highlight the structural progress we're making on energy costs in India.
Speaker #3: Around 70% of the electricity used by our Poona hotels portfolio already comes from green sources, which insulates us from tariff increases. We have now invested around ₹60 crores in a captive solar plant with battery storage for our Poona hotels, targeting commissioning in Q4 FY27.
Speaker #3: This will raise our green energy contribution to around 85%. We expect this to reduce our Pune energy bill by close to 45%, and have a positive impact of 5% to 6% on India EBITDA.
Speaker #3: With a payback of roughly three years, I'm proud of the team that structured this, and it has given me confidence in the continual improvement of our India hospitality margins.
Speaker #3: In Maldives, revenue grew 5% to $218 crore—a resilient outcome, given the war-related cancellations early in the quarter and the sharp recovery that followed. The pressure this quarter was on costs, not on demand.
Speaker #3: EBITDA was ₹32 crore, down 32%, almost entirely due to fuel. Diesel prices reached roughly 2.1 times pre-war levels, driving a fuel and ancillary cost increase of around ₹19 crore.
Speaker #3: At Raya, we are increasing solar capacity, taking the resort to about 80% solar with battery backup by April 2027. With further capacity being added at Conrad and Anantara, together we expect this to save us around $1.5 million a year, roughly 2.5% of Maldives EBITDA.
Speaker #3: And to protect the portfolio from exactly this kind of diesel shocks in the future, Raya will be able to generate and operate around 17 hours of solar capacity, and it will be the first resort in the Maldives to do so.
Speaker #3: Our annuity business remains a steadily high-margin backbone of the group. Revenue grew 3% to ₹128 crore. The EBITDA was broadly flat at ₹111 crore, at an 87% margin.
Speaker #3: And committed occupancy is holding at 98%. This dependable cash flow is what allows us to keep investing through cycles. And we recently added Narmada Estates in Pune, which will extend the base further.
Speaker #3: On growth marquee additions this quarter, the Shyadri Hills wellness estate, a Ritz-Carlton Reserve—the 10th in the world—has been set out at around 425 acres, roughly two to three hours from Mumbai and Pune, and around 45 minutes from Alibag.
Speaker #3: It's an 80-key wellness resort with 33 branded residences alongside. And it takes Ventive firmly into luxury wellness and branded residences, one of the fastest-growing segments in global travel.
Speaker #3: We have acquired it 100%, at an equity consideration of around ₹281 crore and an enterprise value of around ₹466 crore, targeting a yield on cost above 12%.
Speaker #3: The acquisition completed in July, with the occupancy certificate already received. The branded resident sales are designed to release capital early and help us fund the build.
Speaker #3: And there is an embedded upside in the land bank with unused FSI. A wider pipeline of over 1,700 keys across eight upcoming hotels remains on track.
Speaker #3: Our own and developed projects—the AC by Marriott in Whitefield, Bangalore; the Varanasi Marriott; the Ritz-Carlton Reserve in Puttevale, Sri Lanka; and the Soho House Delhi—are progressing through consideration and construction towards completion between FY28 and FY30.
Speaker #3: Alongside these, our promoter group ROFO pipeline of 1,114 keys—spanning the JW Marriott, Navi Mumbai, and three Moxy Hotels—gives us long-term visibility towards our ambition of 4,000-plus keys.
Speaker #3: Without near-term capital strain and with each addition, there is a clear path to double-digit stabilized returns. Looking ahead, we enter the rest of the year with confidence in India, where the structural demand story remains strong. In the Maldives, margins should recover as diesel prices ease and our solar capacity comes online.
Speaker #3: Our annuity business continues to provide stability; our priorities are unchanged. Growth, REFPA, grow REFPA. Widen margins through hands-on management, execute the pipelines with discipline, and pursue acquisitions only when the risk-return equation is right.
Speaker #3: With that, let me hand over to Paresh to take you through some of the financials and balance sheet in more detail.
Speaker #2: Thank you. Thank you, Ranjit. Good evening, everyone. Before turning to the quarter's performance, a brief note on comparability: with the acquisitions completed in August 2024 now fully annualized, both Q1 FY27 and Q1 FY26 are presented on a like-for-like reported basis.
Speaker #2: Accordingly, unlike previous quarters, a proforma comparison is no longer necessary. The only factors affecting comparability are the temporary closure of the Bengaluru property for renovation, and the addition of Goa Hilton following its acquisition.
Speaker #2: The quarter marked a strong start to the year, with consolidated revenue growing 7% year-on-year to ₹554 crore, driven by healthy performance across our operating segments.
Speaker #2: Hospitality revenue increased 9% year-on-year to ₹420 crore, continuing the strong momentum in our core business. Within this, the India portfolio delivered standout growth of 13% year-on-year, reaching ₹203 crore, supported by sustained improvements in both occupancy and average room rate, as Ranjit highlighted earlier.
Speaker #2: The Maldives portfolio contributed ₹217 crore, reflecting a solid 5% growth over the prior year, despite being a quarter affected by geopolitical tensions. Our annuity business also delivered steady growth, with revenue increasing 3% year-on-year to ₹128 crore.
Speaker #2: Demonstrating the resilience and stability of this segment. Overall, revenue growth during the quarter was broad-based, led by the continuous trend in the hospitality business, supported by the stable contribution from the annuity segment, displaying the quality and diversification of our portfolio.
Speaker #2: Consolidated EBITDA remained resilient during the quarter, with consolidated EBITDA at ₹205 crore and a healthy margin of 37%. The year-on-year decline of approximately ₹16 crore was largely attributed to our Maldives operations, where geopolitical developments led to a sharp increase in fuel costs.
Speaker #2: Our India business continued to perform strongly, delivering a 16% growth in EBITDA to ₹74 crore, reflecting the strength of our operating platform and portfolio performance.
Speaker #2: Our higher EBITDA growth versus our revenue growth reflects our strong operating leverage in our Pune and Bangalore markets, Bangalore Hotels, and the addition of Hilton Goa to our portfolio.
Speaker #2: Our same-show revenue grew by 10% year-on-year, while our same-store EBITDA grew 15% year-on-year, which shows that our legacy portfolio is outperforming strongly.
Speaker #2: Our Maldives business was impacted this quarter, with an EBITDA of ₹32 crore, declining 32% year-on-year. To put it into perspective, the decline in absolute terms is ₹15 crore, which is a 3 to 4% impact on our annual Maldives EBITDA.
Speaker #2: Fuel and other ancillary costs rose to ₹38 crore from ₹19 crore in the corresponding period last year, with fuel cost per liter doubling from pre-war levels during the peak war in April-May. We are already seeing fuel costs recover in July by 26% from the peak war levels, and we are also confident of recovering this decline in our Q3 and Q4 peak seasons.
Speaker #2: This geographic cost headwind was not indicative of any broad-based deterioration in operating performance, as reflected by our revenue growth. At an overall level, our hospitality EBITDA declined 4% year-on-year to ₹106 crore, which shows the strength of our India portfolio, which was able to absorb the decline in Maldives to a significant extent.
Speaker #2: Our annuity EBITDA remains stable at ₹111 crore, with an EBITDA margin of 87%. I'll now explain the adjusted EBITDA numbers after normalizing both years for the identified one-off items and for the extent of fuel cost type.
Speaker #2: On that basis, consolidated adjusted EBITDA was ₹230 crore versus ₹219 crore, a growth of around 5%. In our India business, we adjusted Q1 FY26 EBITDA for one-off electricity benefits received in Aloft overall last year.
Speaker #2: With this adjusted EBITDA would have been 18% in would have been 18%. In Maldives, if we adjust the EBITDA for the one-time fuel and ancillary cost spike due to the West Asia war, then it would have been then it would have grown 10%.
Speaker #2: Our adjusted hospitality EBITDA would have grown 14% year-on-year. The higher diesel cost is a real external input pressure that we are structurally addressing through our solar program, which will future-proof us from external future price volatility.
Speaker #2: Our annuity EBITDA was also affected by one-time transaction costs. Adjusting for that, the annuity EBITDA would have grown by 3% year-on-year, with a 90% EBITDA margin.
Speaker #2: Overall, the underlying operating performance of the business remains robust despite the temporary cost pressures in the Maldives. Our profit after tax for the quarter was $124 crore, on account of the tax regime transition, which resulted in tax expense going down by $102 crore during the quarter. Based on the assessment of expected future profitability and current tax liability, we have elected to transition from the old tax regime to the new tax regime. As a result, the applicable tax rate has reduced from 34.94% to 25.17%.
Speaker #2: In addition, the change in tax rate required the re-measurement of deferred tax assets and liabilities recognized in earlier periods. This resulted in a net reversal of deferred tax liabilities amounting to ₹102 crore in the consolidated financial results.
Speaker #2: I'm pleased to report a continuous improvement in our debt profile, with the cost of funds for our Indian portfolio reducing to 7.2%, while the cost of funds for our Maldivian asset declined to 6.1%.
Speaker #2: An improvement of 12 basis points over the previous quarter. As of 30th June 2026, total debt stood at ₹2,095 crore, comprising ₹1,329 crore linked to Indian assets and USD 881 million, equivalent to ₹766 crore, associated with our Maldives portfolio.
Speaker #2: Our balance sheet remains strong, with a comfortable net debt position of ₹1,514 crore. Our disciplined approach to capital management continues to enhance financial efficiency and provides flexibility to deploy capital toward strategic growth opportunities.
Speaker #2: Reflecting strong operating performance and stability, annuity cash flows, our net debt to EBITDA ratio remains healthy at 1.2x. Our financial strength is further reinforced by a credit rating. Ventive retains its Crystal AA stable rating, with key subsidiaries holding Crystal AA+ stable ratings.
Speaker #2: The group generated ₹156 crore of operating cash. This reflects healthy underlying cash generation from operations. The operating cash was effectively deployed towards capex and acquisition.
Speaker #2: Our strength is rooted in a diversified business model powered by three complementary growth engines: India Hotels, Maldives Resorts, and our high-margin annuity portfolio.
Speaker #2: With our strong balance sheet and diversified business model, Ventive will continue to deliver resolute resilient financial performance at the same time remaining well positioned to pursue growth opportunities execute strategic investments focused on disciplined execution including capital allocation and creating enduring value for our stakeholders.
Speaker #2: Thank you.
Speaker #1: 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 touch-tone telephone.
Speaker #1: If you wish to ask a question, please press star then one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star then two.
Speaker #1: Participants are requested to use the 'hands up' feature when asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Speaker #1: The first question is from the line of Kunal Lakhan from CLSA. Please proceed with your question.
Speaker #2: Yeah. Hi. Hi. Thanks team for taking my question. My first question is on you know despite the you know global situation you know we we did well in the in our India portfolio particularly our EPAR was up about 20% driven by both occupancy as well as rate now just wanted to understand like you know what gave us this ability to you know drive such growth in both especially in the rates in this in this you know seasonally soft quarter and secondly like do you see any further you know headroom for growth on these in especially in your in your Pune portfolio?
Speaker #3: Okay. I'll take that answer that question. Ranjith here thanks so much Kunal. break the question into two parts. So what actually drove our occupancy and ADR simultaneously?
Speaker #3: I think that is the key part here. As you know, Q1 is actually seasonally one of the softer quarters, and we've shown really strong occupancy, RevPAR, and RevPAR growth.
Speaker #3: Our occupancy grew to 67%, up about 7%, which is reflecting very, very strong demand both in Pune, Bangalore, and Goa. Most importantly, the key point is we added occupancy and rate at the same time.
Speaker #3: I think that's something that's very unique. ADR is also up about 8%. So that only happens when the demand is genuinely strong and the discounting is not really happening to fill rooms.
Speaker #3: So, this is what we did in our Indian portfolio, resulting in 20% RevPAR growth. To identify a few structural drivers behind it, I think one could definitely be our dominance of the Pune market, where we have a very dominant position—literally controlling the market with the addition of the International Convention Center at the JW Marriott, combined with that.
Speaker #3: I think that could be one very big pillar for this. That, of course, creates some nice business and weddings and conferences, and in effect, there's rooms as well, with indirectly a lot of effect on F&B.
Speaker #3: Resilient corporate demand, as Pune and Bangalore micro markets anchored by IT, manufacturing, and BFSI, still remain very, very resilient and favorable for the industry. I think our industry is still on the upcycle as a whole—hospitality industry.
Speaker #3: So the demand supply gap is still there and and and I think I think lastly would be the strong wedding and social calendar throughout the year.
Speaker #3: So this is this is where we are and to I think the second question was about Pune pricing I think. So I think like I said before we we literally control 65% of the luxury inventory in Pune and and the important point here is not only that we control the inventory in Pune the most important point is that there is no new supply announced in Pune and we have a very clear runway at least four to five years.
Speaker #3: As you know, typically it takes a long time to make a hotel in the luxury segment. So that is why I feel the pricing power in Pune is here to stay, and strong.
Speaker #3: Our hotel occupancy is also directly linked to office stock expansion. I think what we have in the data is that around 45 million square feet will be added in Pune by 2030.
Speaker #3: So this will feed into our hotel room nights, to the existing 95 million square feet of current office stock. So in my view, in this base scenario, we expect to add about 200 to 300 luxury and upper-upscale room nights on a daily basis.
Speaker #3: which will also mean about a 7 to 8% occupancy increase. Over and above, Pune still has a very strong presence of the GCC market, about 15 to 20% of India's GCC market.
Speaker #3: That also is a big driver, and it's also here to stay in Pune. So that office demand fueled by the GCC, with over, I think, 50% leasing in Pune now.
Speaker #3: I think that is also further excel, and lastly, I would like to conclude by giving some flavor on the infrastructure. I think we have some huge infrastructure development, the missing link, the proximity to Navi Mumbai airport, and the outer ring road, etc.
Speaker #3: I think that would also contribute to the Pune pricing. I hope I answered the question.
Speaker #2: Yeah. Yeah. Pretty much the a follow on to that is you know considering all these tailwinds for the for the Pune portfolio and then you know the sustained demand in our other markets where do you see the margins settling right you know we already saw some improvement in this quarter for the India in I'm talking about the India margins particularly where do you see.
Speaker #3: So, like I said—yeah, like I said in the opening remark—we are doing some margin improvements. Pune, at this stage, is probably the most expensive city in India when it comes to electricity per-unit cost.
Speaker #3: So, with our capex of that ₹64–60 crores and the three-year payback, I think that itself will increase the margin to maybe translate into four to five percent.
Speaker #3: In my view, solar is a pivoting catalyst in our margin improvement, and this will happen in the first quarter next year.
Speaker #2: yeah yeah. My my question is more so on the on the on the operating leverage side right with not so much on the cost side.
Speaker #2: More so on the operating leverage side, with the, you know, uptick in the occupancy and ADR. Potentially, yeah.
Speaker #3: So, there's inherent operating leverage that is coming anyway through our cost structure, which is there. On the demand side, what we've seen is that the operating leverage is coming through high occupancies. A Q1 jump of 7% in occupancies is exceptional, given that we've always had great growth in our rates. This time, we've had a 7% occupancy increase. I think that's a phenomenal jump in occupancy, and this is going to stabilize over some period in the high 70s, is my estimation.
Speaker #3: Apart from that, I think I'm seeing a very strong domestic demand, offsetting some FFTAs. That itself is also a very, very healthy move. Big new accounts actually coming in and helping, and driving new business, will further accelerate the margins.
Speaker #2: Understood. Understood. and my one last question on the international business front. I mean you did articulate well in terms of like you know the impact of costs that we saw diesel and and other stuff.
Speaker #2: But if you can talk a little bit on the demand side, right—you know, how did demand play out for the international business over, say, April, May, and June? And then particularly, how has July been? And if you can give some direction for the rest of the year.
Speaker #3: So our commercial strategy—and I'm now talking purely about the Maldives—our commercial strategy continued. We shifted our focus. There was disruption, as we all experienced it, and more so in the Maldives.
Speaker #3: The commercial strategy continued shifting to higher value supply and source markets. I think that is one thing. India demand increase—actually, that's a good data point—from 6% to actually close to 9% for Maldives.
Speaker #3: And there was some shift in the China business. China and Russia turned out to be two of the top performing countries, giving huge double-digit occupancy growths for our resorts.
Speaker #3: And yeah, that's that whole segment mix in Maldives continues to play out within retail loyalty and wholesale business. More on the direct bookings is where the focus is.
Speaker #2: In July, are we back to double-digit growth in revenues, or are we still...
Speaker #3: July tourist arrivals have actually recovered to 2025 levels, and this is with only 27 disrupted flights. This indicates the travel disruption seems to be easing.
Speaker #3: This was compared to about 107,170-odd flights that were disrupted before. So July arrivals have already recovered. In short, that's the answer.
Speaker #3: To 2025 levels.
Speaker #2: Okay, okay. Understood. Thank you so much, and all the very best.
Speaker #3: Thank you. Thank you so much.
Speaker #1: Thank you. The next question is from the line of Vaibhav from Hitech India Securities. Please proceed.
Speaker #2: Hi, thank you for the opportunity, and congratulations on a good set of numbers. My first question is on our acquisition of KZ Eco Reserves. We have mentioned in the presentation that we are targeting a yield on capital of 12%.
Speaker #2: I wanted to understand, given we are funding this project primarily via debt, where the cost of debt will be somewhere around 7.8%.
Speaker #2: Does that reduce our overall IRR in the near term and extend the payback period? And related to this, what is generally the criteria that we consider while acquiring a new property, including, you know, threshold IRR, etc.?
Speaker #2: That's my first question. Thank you.
Speaker #3: So hi Vaibhav. this is Parisha. on the acquisition of KZ KZ as you are aware you know we going to brand it with the Ritz-Carlton Reserves so that itself brings a big good value to the project.
Speaker #3: We are expecting you now, as you mentioned, that everything is not going to be funded by debt. You will be using a certain amount of internal accruals also.
Speaker #3: for the construction and completion of the project. And, you know, we expect certain tourism incentive subsidies—captive tourism in the range of 15 to 20%. We are looking at this all being operational in around two to two and a half years.
Speaker #3: And you know, whatever the result, it would be funded by way of debt, but it will be in a stage-wise manner. So, you know, everything would not be committed earlier, and the funds will be done—you know, funds will be taken as required.
Speaker #2: Understood, sir. And regarding the general threshold or criteria for considering an acquisition, what are those? And regarding the KZ Eco Reserves again, what will be the total land that will be utilized now for the 80-odd keys that we are planning for a wellness resort and the sale of branded residences?
Speaker #2: So, if you can provide more color on that.
Speaker #3: So the total land is around 420, like I already said. The key is this—yep. Okay. Can you hear me?
Speaker #2: Yeah, I can hear you now.
Speaker #1: Yes sir.
Speaker #3: Okay, okay. Just to give you a perspective, I think this land cannot be looked at in isolation as a green.
Speaker #2: I think I lost you, I think.
Speaker #3: Yeah, okay. I don't know how much I shared and how much you heard, but I'll repeat it. There's some problem that's going on with auto-mute.
Speaker #3: Vaibhav can you hear me?
Speaker #2: Yeah, I can hear you, sir.
Speaker #3: Okay, just to give you a perspective, I think I have to go back and do a little bit of history of the land. This is a fairly big chunk of land.
Speaker #3: Not easy to accumulate. This land was actually conceptualized by the Khanna family, who are the owners of the Ananda Hotel in Rishikesh, Ananda Wellness.
Speaker #3: Probably the first wellness resort in India, at that time conceptually with the Mandarin Oriental group. So, when we actually acquired this asset, it comes with very strong inherent positives.
Speaker #3: One of them being that the completion certificate is already there, and the 80-key structure is already complete. So that, in itself, is a huge plus.
Speaker #3: The 80-key structure will be on 72 acres, to answer your question. And the balance, 33 villas, will be for sale; that itself will be around 69 acres.
Speaker #3: So you see that these very generous, well-laid-out villas are designed for exclusivity and a lot of privacy. So that is the inherent plus side of having a big land charge.
Speaker #3: We are not actually trying to maximize FSI or do over-construction there. Balanced land will be in phase two—phase two. And we'll see after phase one what we have to do.
Speaker #2: So just adding to what Ranjit said, you know, even the sale of villas will also bring down our cost of acquisition, which will further increase our YOC over the tenure.
Speaker #2: Understood sir. Perfectly clear. my second question was on our Maldives business. we have seen a slightly lower revenue growth but a bit of performance has been a bit of decline has been quite significant you have mentioned in the presentation it's because of the diesel cost spike.
Speaker #2: Can you bifurcate this in terms of how much was because of the diesel cost increase and how much was because of operating performance? And related to that, what will be the margin outlook for Maldives for FY27?
Speaker #3: Okay. Yes, I think I tried to explain it in the open sheet, but I will give more details as requested. For us at Ventive, you know Maldives has always been a very, very revered market, and that's why we are there.
Speaker #3: I think this quarter we grew at 4.9% in revenue—almost 5%—and this portfolio for us has only compounded in both revenue and EBITDA in all the past six quarters.
Speaker #3: And that too with double digits. So that's important to give you a little bit of the flavor. This quarter, our EBITDA fell, yes, by 15%.
Speaker #3: The fuel bill actually rose by ₹17 crore over the same period, and ₹2 crore in indirect impact. So, the total is about ₹19 crore. And the entire EBITDA decline was because of the diesel rates.
Speaker #3: So, in price terms, the diesel price doubled in the April and May peak versus the pre-war level. So I think I'm still—thanks to our cluster procurement, since we have three resorts, we have some cluster advantages.
Speaker #3: Our diesel price was still 20% below the spot market, but this is the only quarter where we've acquired—where we've run into a one-off. In my view, it's definitely a one-off impact.
Speaker #3: Purely due to external factors, inherent revenue has still been growing. Our occupancies have also been strong. I think this conflict is very, very unfortunate, and oil prices did spike—no denial. We saw the impact; we braced for the impact.
Speaker #3: Our Maldives is hugely dependent on energy. So, luckily, this happened in a weak quarter. But I could look at it in a different way.
Speaker #3: So if we strip the diesel spike suppose this spike didn't happen what would be the number? So if we look at the cost of Maldives EBITDA it would have been actually it would have grown by 10% versus the minus 32% EBITDA decline.
Speaker #3: In a non-peak quarter under war conditions. So, these are the numbers I think you are looking for, and I hope I was able to answer.
Speaker #2: Q3 recovery and Q4 recovery will, I'm pretty sure, offset the Q1 and Q2 one-off impact. Perfect, sir. Clear and clearly understood. Just lastly, on the Goa resort that we acquired—the Hilton property.
Speaker #2: How has the initial performance been after the acquisition? How is it trending in terms of the overall IRRs versus expectations? And what is the outlook going forward?
Speaker #2: And the brownfield expansion that you have mentioned of around 50 keys—when does that start? And the related capex for it? That's it from my side.
Speaker #3: So the so the 104 keys Goa is showing in you know encouraging signs of occupancy and and both revenue growth after Ventive has actually taken over.
Speaker #3: What we're doing is, actually, without disrupting operations, we are doing the entire—well, we don't give unit-level numbers, but I'll still give you enough data so that you can see what's happening there.
Speaker #3: We are doing our planning, commissioning, and designing—everything—for the extension of that 50 rooms plus, which will happen, and the existing rooms that need to be refurbed and rebranded.
Speaker #3: So, that is happening. Apart from that, there is All the Goa, which is a 21-room boutique hotel in Nerul. That is also under planning.
Speaker #3: And Saipin, his land is also under planning. All set to be delivered with refurbishment and brand gain in FY25–29, somewhere around FY29–30.
Speaker #2: Thank you for the detailed answers, sir, and all the best.
Speaker #3: Yeah, and I think by doing all this, we are definitely looking at, conservatively, doubling our EBITDA after doing all this.
Speaker #2: Great.
Speaker #3: Thank you so much.
Speaker #1: Thank you. Before we move to the next question, if you wish to ask a question, please press star and one on your touch-screen telephone.
Speaker #1: Thank you. The next question is from the line of Suman Kumar from Modula Loop One. Please proceed with your question.
Speaker #2: Yeah hi Ranjit. my question is for Maldives. we have seen a significant impact of diesel price hike. So what are the key initiatives we have taken during the quarter to protect the margin and how is this initiative is going to for the future it is going to be to have a negate whatever the increase we have in the diesel prices and for that is it is it and is it in the margin is going to improve in FY20 Q2 FY27 or FY28?
Speaker #3: Thanks, Suman. Yes, I mean on AI, the fundamentals of Maldives still remain. This is a one-off war situation with a spike in diesel prices.
Speaker #3: I think the uniqueness of the 'one island, one resort' story—the blue water, white sand—that's not going anywhere. The connectivity that Maldives enjoys, global connectivity, global distribution—I think it still has the top leisure destination as a global resort player.
Speaker #3: This has to be—this is not going anywhere. So, that is my view. Please treat this as a one-off diesel price increase leading to a margin decline.
Speaker #3: We have seen over the period, Suman, whether it was the 2008 financial crisis or COVID, or even this war, I think the Maldives has always bounced back and is super resilient.
Speaker #3: So please take that as very encouraging data. For we are, I think, confident about recovering to our current levels. The diesel and war-related impacts are beyond our control.
Speaker #3: But the controllable levers are all working. Q3 and Q4 are typically the high seasons, and the business looks very, very strong on our books.
Speaker #3: They will be revenge traveling. There are always inherent bookings that come up in leisure markets. What we've also seen is that the demand recovers faster and is least affected.
Speaker #3: In that too, in the luxury segment. That's where our uber-luxury resorts, Conrad and Anantara, have already—what we've seen, the data have outperformed the market.
Speaker #3: So yeah, the business on books is good. The ₹15 crore impact will be negated in Q1, Q3, and Q4. And you know, Raya also has performed as per what we expected.
Speaker #3: The good news here is to mitigate EBITDA margin what you asked is our solar program. The what we've taken is we've taken steps to mitigate this diesel cost impact for the in the future by commissioning a one off solar capacity along with batteries in all our three resorts but more so in Raya.
Speaker #3: So you'll see the results from FY28, the solar program. Raya will be moving to about 80% solar by April 2027. So 1.2 megawatts will go up to almost 5 megawatts.
Speaker #3: With additional capacity also in Conrad and Anantara, this will—in absolute numbers, if I had to answer your question—be about $1.5 million in savings every year, roughly about 2.5% of Maldives EBITDA, without any upfront capex.
Speaker #3: So our resorts will be future-proof, with a portfolio designed exactly for these kinds of diesel shocks. I hope I was able to answer your question.
Speaker #2: Yeah Ranjit. Thank you Suman.
Speaker #3: Also, I forgot to tell you, Raya, once we put in the solar, it will be one of the first resorts in the Maldives which will run without generators for 17 hours a day.
Speaker #3: This will be the first one in view.
Speaker #1: Thank you. The next question is from Anu Tupadia from Investec. Please proceed with your question.
Speaker #2: Okay, hi. Thanks for the opportunity. I just want to check on your Sri Lankan property. I guess that the commissioning has been delayed by two or three years. In our previous presentations, the timeline was mentioned as FY28-end.
Speaker #2: The current one mentions around FY31. Just wanted to get a sense of what's actually happening out there.
Speaker #3: So yes, this is the announced plan for 73 villas in Arugam Bay. It is a Ritz Carlton Reserve, the second one in our portfolio.
Speaker #3: I will answer your question, but I want to give you some perspective. Ritz-Carlton Reserve is only the tenth in the world. It's a unique property.
Speaker #3: What we're stuck on right now is a little bit on the front of permissions, because it's an environmental sensitivity since we have about 1.5 acres of shoreline, and one side is the Yala National Park.
Speaker #3: I think we are just on the verge of getting the completions and all the formalities past us. Once they are done, I think the targeted timeline is around FY30.
Speaker #2: Okay, okay. And quickly on Maldives again. So we understand that Q1 had an issue. Just want to get how things are moving in July, and the early inquiries of ours—are these in line with Q1 or slightly better?
Speaker #3: It's a bit early for me to say. Like I said, our KPIs are being placed in Q1 also—both our occupancies and and and rates.
Speaker #3: It's just that the EBITDA has taken a hit because of diesel cost. This totally—you know, I continue seeing occupancy being quite strong in this quarter as well.
Speaker #3: I can't tell you anything about the EBITDA margin at this stage. It'll all depend on the war situation.
Speaker #2: Yep. Thank you. That's it from me.
Speaker #3: But business on the books is strong. What I can tell you is my Q3 and Q4 are looking extremely strong.
Speaker #2: I understand. That's helpful.
Speaker #1: Thank you. Ladies and gentlemen, that was the last question from the participants. I now hand over the conference to Mr. Ranjit Batra for closing comments.
Speaker #1: Over to you sir.
Speaker #3: So thank you for all the questions. To summarize, Q1 showed real underlying resilience. The reported EBITDA decline was almost entirely a fuel-driven cost event.
Speaker #3: This is definitely not a loss in momentum for Maldives. India delivered a strong occupancy- and rate-led quarter. Maldives held revenue share against a softer market, and our annuity business stayed stable and with high margins.
Speaker #3: Our solar program in both India and the Maldives will address the negative impact from power and diesel pricing volatility, starting next calendar year. Alongside this, the rich carton reserve Shadri Hills adds a marquee wellness resort and branded residence opportunity.
Speaker #3: Our pipeline remains on track, and our balance sheet gives us the flexibility to fund this growth through internal accruals. I want to thank our team across India and Maldives, our corporate office, and our operating partner, and all of you on the call.
Speaker #3: For your continued support, we look forward to speaking to you again next quarter. Thank you once again, and have a nice evening.
Speaker #1: Thank you. On behalf of Ventive Hospitality that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.
