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00:00 We are taking stock of the quarter gone by for APJ Surendra Park Hotels, where we have
00:05 seen a quarter come through and the question really is what can we expect going forward
00:10 based on the assessment of the quarter gone by.
00:13 Well, we are in conversation with the MD of the company, Mr. Vijay Diwan.
00:18 Well, Mr. Diwan, good morning and thank you so much for joining in.
00:23 My first question is to do with your own assessment of the quarter gone by.
00:27 How do you see things span out from here on and what can we expect in the some months?
00:34 So Agam, firstly, good morning to you and good morning to your viewers.
00:39 And I'm absolutely delighted to be on your channel and thank you for inviting me.
00:45 So we have had an exceptional quarter.
00:49 It is probably the best quarter we have had as far as Q4 goes.
00:55 We got listed on the exchanges in February this year and we have recorded an EBITDA growth
01:04 of 23% and a PAD growth of 73% in this quarter.
01:11 And as far as the year which has gone by, it's also been exceptionally phenomenal for
01:16 us.
01:17 We have seen a growth of 13% on the top line and an EBITDA growth of 16% and a PAD growth
01:26 of 43%.
01:28 And this trajectory, as I see in terms of EBITDA growth, is going to continue.
01:36 During the quarter which has gone by, we have added about 97 rooms, 97 keys and 3 hotels
01:44 to our portfolio.
01:46 Adding the total number of keys to 2,395 with 33 hotels.
01:55 As we move forward, we plan to add, we have added actually during the course of the year,
02:01 we have added 374 keys with 8 hotels.
02:06 And as we move forward, we plan to add about 238 keys in the coming year.
02:12 We have another very strong business in the F&B service space, which is through our brand
02:20 Flurries.
02:21 Flurries is a brand of celebration of confections and cafe and this is the fastest growing business
02:29 at the moment in the country, growing at a rate of 18 to 20%.
02:34 In this, we have 82 outlets of Flurries at the moment and we plan to take it to 100 outlets
02:43 by the end of quarter 2 and then take it to about 120 outlets by the end of the financial
02:49 year.
02:50 The key growth, Agam, for us is going to come because we are today a net cash positive company.
03:00 The debt has been fully retired.
03:02 We are among the few companies on the listed space where the debt equity ratio is virtually
03:08 nil and we have a cash approval of almost 200 crores during the course of the year and
03:17 this trajectory is going to continue.
03:19 And we are going to use this cash for development of our hotels.
03:26 As you know, deployment of cashes or deployment of funds or capital is the fundamental task
03:32 of management and that too for wealth creation.
03:35 So we are going to launch through three very large development projects.
03:41 One is our hotel in 200 room hotel in Pune, a 100 room extension in Vishakapatnam and
03:48 in the growing market of Calcutta, we are going to be launching a mega project, which
03:53 is a 250 room hotel and 100 service apartments.
03:57 Right.
03:58 Mr. Dheeman, if I can just come in.
04:00 So I do want to talk about your plans in future and I also want to talk about the hotels that
04:07 you will launch and the kind of addition to your total keys that could come through.
04:12 But on an immediate basis, I want your assessment on occupancy levels.
04:18 Firstly, in the first quarter, what sort of occupancies are you seeing?
04:24 Moving on, do you see any sort of disruption or do you see a further improvement as far
04:29 as occupancies are concerned?
04:30 And I take that seasonality will have a lot to play here.
04:35 And I'm also assuming the fact that you guys are looking to add more keys to your overall
04:41 portfolio is that you are certainly seeing enough demand to sustain that as well.
04:46 So could you give us a little more idea on this one?
04:50 So firstly, as far as occupancies are concerned, we are market leaders in occupancy.
04:57 In fact, we have India's highest occupancy of 92 percent for the year, which has gone
05:04 by and this percentage continues for us at 92 percent.
05:08 The park brand enjoys 20 to 25 percent premium in terms of occupancy.
05:16 And the main reason why our occupancy is so high, because we have a huge focus in terms
05:22 of our revenue management system.
05:25 We have a very high percentage of repeat customers and the park, wherever it is located, it is
05:31 located very strategically and it's located in the key growth markets.
05:37 So we enjoy this 20 to 25 percent premium and we are market leaders.
05:43 We enjoy the leading occupancy in the country.
05:48 And this position has been there with us for many, many years.
05:53 Even during the covid period, we had the highest occupancy first year of 67 percent and second
05:59 year of 79 percent.
06:01 And as far as the demand supply is concerned, the demand is growing in India at a very healthy
06:09 space of 10.5 percent.
06:12 And the supply side is actually going at only 7.1 percent.
06:19 So there is a huge gap which is there and this is going to significantly help the hospitality
06:25 industry to continuously grow at the rate of 12 to 14 percent in the in the years to
06:31 come.
06:32 In fact, we are at the beginning of the super cycle of the hospitality industry and this
06:37 is going to continue for years and years to come.
06:41 The way I look at demand, Agam, is that, you know, India has been so far fueled.
06:47 The growth has been fueled by domestic demand, which is based on the fact that India is growing
06:53 at a very, very fast pace in terms of economy.
06:57 But also the international travel this year is expected to be fully back or exceed the
07:02 pre-covid levels because of improvement in economies in the in the West as well as in
07:07 the United States.
07:09 So it's very, very positive.
07:12 And the coming quarters are going to be even more stronger.
07:15 That is Q2 onwards post the formation of the new government and hopefully once again a
07:22 stable government.
07:23 Sure.
07:24 So a final question then.
07:25 So you were, you know, alluding to the projects that are now under development where you're
07:32 talking about the number of rooms that we could seek.
07:34 So can you, you know, finish that point and tell us a little more about that one?
07:38 So currently, as I said last year, we added 374 keys.
07:44 This year we plan to add 238 keys.
07:47 And in these 238 keys, there are going to be 52 keys which are going to be palace hotels,
07:53 which are high revenue generating hotels, palace hotels opening in Patiala as well as
08:00 in Chettinad in Tamil Nadu.
08:02 And we are going to launch the development of three of our hotel projects this year,
08:08 which is going to be 250 rooms at EM Bypass in Calcutta along with service apartment.
08:16 This project is going to start in January, February of this financial year.
08:21 And of course, 200 rooms hotel expansion or hotel new project is going to be launched
08:27 at Pune.
08:28 The development work of this project is going to start in September this year.
08:33 And then we have a 100 room extension taking place in Vishakhapatnam.
08:39 The Calcutta project is the key project for us because it is a mega project.
08:45 It has a residential apartments and it has the hotel.
08:49 So the apartments are going to be sold and the proceeds of the apartments are going to
08:55 be used to actually make the hotel in which is going to be virtually free.
09:00 And all these hotel projects are going to be on our existing land banks.
09:05 So because they are on our existing land banks, what's going to happen is that the project
09:09 IRRs are going to be much, much higher.
09:14 So in the range of anywhere between 28% to 40%.
09:18 Significant about the EM Bypass Calcutta project that the sale of service apartments is going
09:24 to give us close to about 90 to 100 crores of cash accruals in each of the three following
09:34 years as far as the cash accruals are concerned.
09:38 So we are very well positioned in terms of positioning as luxury boutique hotels and
09:45 our growth plans continue to be very solid and very robust.
09:50 And the industry can look forward to superior results going forward.
09:54 Right, right, right.
09:55 All right, sir.
09:56 We leave it at that.
09:57 Thank you so much for joining us and taking us through the quarter gone by as well as
09:59 what we can expect going forward.
10:01 We wish you the best.
10:02 Thank you.
10:03 Thank you.
10:04 Thank you.
10:05 (dramatic music)