Any current/future new fundraising through debt or equity?

There is no specific mention of any current or future fundraising through debt or equity in the provided transcript. Management emphasized that most renovations are being funded through internally generated resources and they are not taking aggressive loans from banks for these activities. They appear focused on capital deployment strategies that do not rely heavily on external borrowings. There is no indication of planned equity issuance either. The company is concentrating more on operational enhancements and organic growth rather than external fundraising at this time.

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

The Mumbai hotel project (close to 300 rooms) is underway with expected completion and operations starting by the end of the current financial year. CapEx for the Gurgaon hotel is estimated around ₹5 crores. No significant renovation expenses are anticipated for FY 2025; minor renovation of about ₹1-2 crores may occur in FY 2026 for Brindavan Garden hotel. Most renovations are internally funded without bank loans. Management is actively expanding through new hotel openings and revenue share/management contracts, targeting an addition of approximately 2,100 keys including 1,600 rooms ex

Future growth expectations in sales/revenue/volumes?

Revenue is expected to increase by approximately 15% next year from existing hotels, driven by renovations and new properties such as the upcoming Bombay hotel. The addition of 1,600 new rooms is mostly expected to be operational by end of the current financial year, with 16 out of 21 hotels opening in the next 4-5 months. Growth will come from a combination of higher Average Room Rate (ARR), improved occupancy, and increased Food & Beverage (F&B) and other income per hotel. New loyalty program with 3.5 lakh+ members is expected to reduce customer acquisition costs versus OTAs, fostering

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

Royal Orchid Hotels expects a 15% revenue increase next year from existing hotels, boosted by renovation benefits and new properties like Bombay. Growth will come from a combination of ARR (Average Room Rate), occupancy, F&B, and other income per hotel, not just ARR increase. The company anticipates substantial revenue growth in the next 2-3 years, with some expansion projects possibly delayed but targeted for completion soon. Management projects crossing ₹100 crore PAT by 2026-'27, considering current upgrades and expanding bandwidth. The increased costs seen currently (e.g., renovati

Current/ Expected Orderbook/ Pending Orders?

The company has 21 upcoming hotels in the pipeline. Out of these, 16 hotels (adding around 1,600 rooms) are expected to be operational within the next 4 to 5 months, predominantly by the end of the current financial year. Three hotels are scheduled to open within the next month. Six hotels might get pushed into the term between April and Q1 of the next financial year. The target is to add approximately 2,100 keys (rooms) in total. There may be some delays with certain projects, but the company is actively onboarding and reflagging existing properties to achieve or surpass the 8,000+ rooms goal

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Royal Orchid Hotels LtdQ3 FY24Leisure Services

Royal Orchid Hotels Ltd Q3 FY24 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 3

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Revenue is expected to increase by approximately 15% next year from existing hotels, driven by renovations and new properties such as the upcoming Bombay hotel.
→The addition of 1,600 new rooms is mostly expected to be operational by end of the current financial year, with 16 out of 21 hotels opening in the next 4-5 months.
→Growth will come from a combination of higher Average Room Rate (ARR), improved occupancy, and increased Food & Beverage (F&B) and other income per hotel.
→New loyalty program with 3.5 lakh+ members is expected to reduce customer acquisition costs versus OTAs, fostering higher loyalty and sales.
→New upscale lifestyle hotel in Mumbai (close to 300 rooms) will contribute to revenue growth starting late this financial year.
→The company is cautiously optimistic, avoiding undue risk amid uncertainties but aggressively driving growth across all segments.

Margin guidance

Category 1

→Royal Orchid Hotels expects a 15% revenue increase next year from existing hotels, boosted by renovation benefits and new properties like Bombay.
→Growth will come from a combination of ARR (Average Room Rate), occupancy, F&B, and other income per hotel, not just ARR increase.
→The company anticipates substantial revenue growth in the next 2-3 years, with some expansion projects possibly delayed but targeted for completion soon.
→Management projects crossing ₹100 crore PAT by 2026-'27, considering current upgrades and expanding bandwidth.
→The increased costs seen currently (e.g., renovation, staffing) are investments toward future growth, with earnings expected to improve as these investments start yielding returns.
→EPS was strong at ₹2.73 per share for Q2 FY25, up from ₹2.49, indicating positive earnings momentum.
→New upscale lifestyle offering in Mumbai poised to add value and differentiate earnings growth.

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Fundraise plans

→There is no specific mention of any current or future fundraising through debt or equity in the provided transcript.
→Management emphasized that most renovations are being funded through internally generated resources and they are not taking aggressive loans from banks for these activities.
→They appear focused on capital deployment strategies that do not rely heavily on external borrowings.
→There is no indication of planned equity issuance either.
→The company is concentrating more on operational enhancements and organic growth rather than external fundraising at this time.

Order book

Yes

→The company has 21 upcoming hotels in the pipeline.
→Out of these, 16 hotels (adding around 1,600 rooms) are expected to be operational within the next 4 to 5 months, predominantly by the end of the current financial year.
→Three hotels are scheduled to open within the next month.
→Six hotels might get pushed into the term between April and Q1 of the next financial year.
→The target is to add approximately 2,100 keys (rooms) in total.
→There may be some delays with certain projects, but the company is actively onboarding and reflagging existing properties to achieve or surpass the 8,000+ rooms goal.
→Overall, the company is optimistic about hitting its expansion targets and expects these openings to positively impact revenue from Q4 onwards.

Capex plans

Yes

→The Mumbai hotel project (close to 300 rooms) is underway with expected completion and operations starting by the end of the current financial year.
→CapEx for the Gurgaon hotel is estimated around ₹5 crores.
→No significant renovation expenses are anticipated for FY 2025; minor renovation of about ₹1-2 crores may occur in FY 2026 for Brindavan Garden hotel.
→Most renovations are internally funded without bank loans.
→Management is actively expanding through new hotel openings and revenue share/management contracts, targeting an addition of approximately 2,100 keys including 1,600 rooms expected to be operational mainly by the end of this financial year or early next year.
→The company plans ongoing phased renovations and product improvements to boost ARR and revenue growth.
→Introducing new upscale lifestyle offerings beyond current portfolio, with the Mumbai project being the first.
→The company is also exploring opportunities in serviced apartments and reflagging existing properties.

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

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1Royal Orchid Hotels Ltd

Rev 3Mar 1

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