Any current/future capex/capital investment/strategic investment?

Major CapEx planned for FY25 related to expansion of owned Goa hotel by adding ~40 rooms, estimated around ₹25 crores. Additional smaller CapEx of ₹15-20 crores planned for various minor investments and renovations. Focus predominantly on asset-light strategy—most new hotels under management contracts, requiring minimal investment except for some revenue share or lease models. Plans to add about 50 hotels by end of next financial year, with 25 already signed and another 25 in negotiation. Investment in renovation and brand presence to boost long-term revenue and profitability. Explor

Future growth expectations in sales/revenue/volumes?

The company expects substantial growth over the next three years with revenue growth targets of 25% to 30% annually. (Page 13) Addition of 23 new properties is anticipated this coming year, expected to create a snowball effect on growth. (Page 21) Room additions: Around 1,200 to 1,500 new rooms expected this year from new hotel openings. (Page 8) Food and beverage business expected to grow substantially, driven by increased banquet and social/wedding functions demand. (Page 5) Average Room Rate (ARR) projected to grow around 10% in Q3 and Q4 compared to last year. (Page 7) Occupancy is expecte

Future growth expectations in earnings/operating earnings/profits/EPS?

Royal Orchid Hotels aims for revenue growth of 25-30% per annum over the next few years (FY '26-'27). Management expects substantial growth in both top line and bottom line, with profitability improving over time. Cash profit for H1 FY '24 stood at around ₹30 crores, showing strength and supporting future growth. New hotel properties added recently are expected to stabilize and contribute more solid income in 6-12 months. ARR (Average Room Rate) is expected to grow around 10% in Q3 and Q4 FY '24 versus last year. EPS and overall shareholder value are forecasted to improve with ongoing good qua

Current/ Expected Orderbook/ Pending Orders?

Royal Orchid Hotels announced 23 new hotel openings planned for the coming year. Since April 2023, the company has added 12 hotels totaling roughly 600 rooms. An additional 7-8 hotels (around 500-600 rooms) are expected to open before March, aiming to achieve between 1,200 to 1,500 room additions for the year. Expansion projects like the Goa hotel are awaiting regulatory approvals (Coastal Regulation Zone clearance) with investment and construction expected to begin next financial year. Renovation work on existing properties is ongoing but planned carefully to avoid impact during peak

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Royal Orchid Hotels LtdQ3 FY23Leisure Services

Royal Orchid Hotels Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹343P/E: 23.9Market Cap: ₹892 CrSector: Leisure Services

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company expects substantial growth over the next three years with revenue growth targets of 25% to 30% annually. (Page 13)
→Addition of 23 new properties is anticipated this coming year, expected to create a snowball effect on growth. (Page 21)
→Room additions: Around 1,200 to 1,500 new rooms expected this year from new hotel openings. (Page 8)
→Food and beverage business expected to grow substantially, driven by increased banquet and social/wedding functions demand. (Page 5)
→Average Room Rate (ARR) projected to grow around 10% in Q3 and Q4 compared to last year. (Page 7)
→Occupancy is expected to surpass 75%. (Page 9)
→Management operator business boasts high ROC (~75-80%) with yields around 40-45%, contributing positively to overall profits. (Page 13)
→New hotels opened recently and those coming online are expected to show results 6-12 months after opening. (Page 13)

Margin guidance

Category 3

→Royal Orchid Hotels aims for revenue growth of 25-30% per annum over the next few years (FY '26-'27).
→Management expects substantial growth in both top line and bottom line, with profitability improving over time.
→Cash profit for H1 FY '24 stood at around ₹30 crores, showing strength and supporting future growth.
→New hotel properties added recently are expected to stabilize and contribute more solid income in 6-12 months.
→ARR (Average Room Rate) is expected to grow around 10% in Q3 and Q4 FY '24 versus last year.
→EPS and overall shareholder value are forecasted to improve with ongoing good quarterly and yearly performances.
→Company focuses on solidifying working capital and taking calculated investments to enhance value.
→Promoters hold 63% stake, aligning interests towards wealth creation for all shareholders long-term.

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Fundraise plans

Yes

- The company has taken personal loans from promoters during a time of exigency and dire need for funds but is now repaying that money; this was not for profit but to support the company (Page 22). - They have sought approval for ₹200 crore debentures at a market rate around 9%-10%, although related-party loans were at higher rates previously (Page 18-19). - There is no explicit mention of a new equity fundraising or IPO in the near term. - They are exploring selling a stake in Multi Hotels Limited to raise around ₹20 crores cash (Page 15). - The company follows an asset-light strategy focusing on management contracts rather than owning many properties, reducing capital expenditures (Page 15). - Future CapEx is moderate, with around ₹25 crores expected next financial year on owned properties (Page 15). Overall, debt issuance (debentures) and asset sales are the primary funding mechanisms discussed; no new equity raising was mentioned.

Order book

→Royal Orchid Hotels announced 23 new hotel openings planned for the coming year.
→Since April 2023, the company has added 12 hotels totaling roughly 600 rooms.
→An additional 7-8 hotels (around 500-600 rooms) are expected to open before March, aiming to achieve between 1,200 to 1,500 room additions for the year.
→Expansion projects like the Goa hotel are awaiting regulatory approvals (Coastal Regulation Zone clearance) with investment and construction expected to begin next financial year.
→Renovation work on existing properties is ongoing but planned carefully to avoid impact during peak seasons.
→The company views these openings and renovations as part of a growth strategy aligned with India's readiness for expansion in the hospitality sector, projecting a "snowball effect."

Capex plans

Yes

→Major CapEx planned for FY25 related to expansion of owned Goa hotel by adding ~40 rooms, estimated around ₹25 crores.
→Additional smaller CapEx of ₹15-20 crores planned for various minor investments and renovations.
→Focus predominantly on asset-light strategy—most new hotels under management contracts, requiring minimal investment except for some revenue share or lease models.
→Plans to add about 50 hotels by end of next financial year, with 25 already signed and another 25 in negotiation.
→Investment in renovation and brand presence to boost long-term revenue and profitability.
→Exploring sale of stake in Multi Hotels Ltd to generate about ₹20 crores cash inflow.
→Working on enhancing leased and revenue share hotel portfolio to increase profitability and turnover.
→Greenfield projects not planned immediately; focus on revenue share and leased assets.

How does Royal Orchid Hotels Ltd rank vs peers in Leisure Services?

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