Analyzing...
Ladies and Gentlemen, Good Day and Welcome to Juniper Hotels Limited Q2 FY'25 Earnings Conference Call.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touch tone telephone. Please note that this conference is being recorded.
Today, from the Juniper Management we have with us Mr. Arun Kumar Saraf – Managing Director, Mr. Varun Saraf – Chief Executive Officer, Mr. Tarun Jaitly – Chief Financial Officer and Mr. PJ Mammen – Chief Operating Officer. Thank you and over to you sir.
Thank you. Hi, this is Tarun Jaitly. I would like to welcome everybody on to the 2nd Quarter FY'25 Call for Juniper Hotels and thank you for taking time out. I would like to hand over the floor to Mr. Arun Saraf.
Thank you, Tarun. I am excited that we have 50 people online at this moment and I am really excited that there's so much interest in our Company.
First of all, I would like to share with you the biggest achievement of this last quarter. We have been able to acquire a superb trophy asset at Bangalore airport. This has excited all of our management team and is really giving us the opportunity to go on to the next phase of growth of Juniper Hotels. As you recall, last time we spoke about how company is in a growth path in terms of getting more out of its existing assets in terms of revenue and EBITDA and also eyeing to add 1,000 more rooms into our existing inventory over the next one year. So, with the first acquisition, we have been able to add 220 rooms. We have completed the acquisition of a 220- room luxury hotel in Bangalore. It is built on 6.5 acres of freehold land and the development has a potential of adding 300 additional rooms to supplement the extraordinarily large banqueting facility, approximately ~50,000 square feet (Including open lawns and event garden) of space in this existing building. We target to complete the completion of the construction of the hotel and get it operational in eight to nine months. That is in Q3 of Financial Year ‘25-26. This asset has been acquired at a price of ₹ 325 crores and would cost the Company ₹ 400 crores upon completion. Bangalore is the fastest growing market in India with strong demand. Apart from the existing Taj Hotel at the airport, no additional inventory will be added to this micro market before 2028.
BIAL is also projecting of doubling the passenger traffic to 50 to 55 million by 2029. BIAL, which is the developer of the airport, is also planning offices and convention center to replicate Delhi Aerocity model. That is where the excitement is that we have been able to acquire this property, which is 90% complete and will become operational in eight to nine months. So, it gives us a head start. So, the opportunity is superb. I am really excited that we are going to get on. I was there last week for four days. We have organized our teams to take over the property.
It's registered in our name now. Take over and start running with the completion of the project.
Page 3 of 13 This quarter has been a very healthy quarter with a revenue growth of 32% year-on-year despite having 25% of the Grand Hyatt Mumbai room inventory under renovation.
We have achieved the EBITDA of ₹ 73 crores which is 21% YoY growth. We achieved the PBT of ₹ 20 crores in the quarter compared to a loss of ₹ 27 crores over comparable period last year.
I will ask Tarun to explain to you this chart of how we have achieved this because we have taken a one-time tax adjustment cost of ₹ 42 crores as per the changes in indexation regulation. So, I will let Tarun explain this to you in more detail but let me continue with my part of the presentation.
H2 for Financial Year ‘2025 will be stronger given the industry tailwinds, strong demand for MICE and social events. As you are aware, we have recently completed the Grand Showroom at Grand Hyatt Mumbai, adding 49,000 square feet of additional MICE facility at Grand Hyatt, Mumbai.
Along with this, I would like to update that we have completed refurbishment of our existing Grand Hyatt Rooms, and we have given a brand-new grand club to supplement the room inventory. This will allow us to re-establish ourselves as the market leader in our micro market in suburban Mumbai.
I see a continued and robust increase in demand leading to greater ARR across all properties, especially Mumbai and Delhi. With our continued focus on asset acquisition, I am confident of adding 1,000 keys in Juniper inventory in the next year including the Bangalore acquisition that we have completed just now.
I would like to thank you for being with us this afternoon and listening to us. Your Company is in right trajectory of future growth and I can see this happening right now. Thank you very much.
Thank you, Mr. Saraf. So, I would like to add some of the highlights for the current quarter. The presentation was already shared. So, I am sure all of you have gone through it.
So, I will just walk you through some of the key highlights.
In the 2nd Quarter, the top line has grown by 32% and on a like-to-like basis, this is roughly 14% growth YoY. This growth is primarily driven by ARR increase across markets. At Grand Hyatt, we have grown ARR at 10%, which is above 8% which city has seen and 6% vis-à-vis the compset. Andaz ARR has grown 16% vis-à-vis 4% of the city and (-1%) of the compset and same with Lucknow where we saw 12% ARR growth against the compset growth of 5%. So, our ARR have outperformed across all the major markets that we operate in, and the near-term trends remains positive given the strong tailwinds that we continue to see in the sector.
On the EBITDA front, our reported EBITDA has grown 21% YoY in 2nd Quarter. And if we look at the first half numbers and if we adjust the one-time items in the current first half of fiscal '25 and we add the CHPL contribution in first half of FY'24 to make it like-to-like for comparison, the EBITDA for the first half current fiscal is ₹ 159 crores versus ₹ 138 crores for
Page 4 of 13 the corresponding period last year which is 15% YoY growth and an adjusted EBITDA margin of 37.1% adjusted for the one-time items that appeared in the first half.
On the PBT, I am extremely happy to note that we have achieved the profit before tax of ₹ 33 crores in the current first half against negative ₹ 47 crores last year. And as Mr. Saraf was saying that there is a charge that we have taken which is notional of 49 crores in the first half, which basically reflects the amendments that were made in the Finance Bill 2024 relating to the capital gains. JHL has remeasured its deferred tax liabilities on items which were subject to capital gains, and this is a cumulative one-time charge that has been taken on. And had it not been for this particular notional charge, we would have strong positive profit after tax. And we believe that going forward given the overall trajectory, the second half is going to be better than the first half, we expect to achieve significant positive profit after tax for the second half of the current fiscal.
On major projects, I am happy to note that we have completed all the major projects in Mumbai.
As I've discussed before, Grand Hyatt constitutes roughly around 48% to 50% of my EBITDA.
So, it is the mothership, and it has been affected in the first half because of all the refurb that was getting done. All the projects have been completed and we will see the benefit of the same appearing in the second half of the current fiscal and that could be the positive trajectory for our top line and margin expansion for the rest of the year.
On the cost front, I mentioned that there are one-time cost that we have taken onboard in the first half, which is ₹ 18 crores. Majority of this which is ₹ 12-odd crores is on account of R&M, which is for the upgrade, the expenses that we have had to take on to the P&L because of the refurbishment across the assets.
On the heat, light and power, which is another major contributor of cost, it has remained flat despite the growth in revenue. So, that's a big positive contributor. And as we increase our green power across assets going forward, this will only become much more better.
On the employee cost, while on the face of it, it looks like a large increase, but there is ₹ 11 crores CHPL contribution that you have to add in the last first half and then we have also onboarded some senior leadership at the operating level, which has impacted the employee cost.
But what is more important is that we are tracking the 40 crores per quarter run rate that we had actually mentioned last time that we don't believe that the employee cost is going to increase materially from there on and we are well on track of that run rate.
On the balance sheet side, we had a cash balance of ₹ 247 crores. We are generating very strong net-free cash flows, and we have utilized ₹ 64 crores of cash post the September 30th to acquire Bengaluru in addition to ₹ 280 crores of debt that we have onboarded. But despite taking on that ₹ 280 crores debt, we are at around 1.5 to 1.55x net bank debt-to-prospective EBITDA, which leaves a significant headroom for us to get growth capital.
That's all that I had to share. We are open to questions and answers. Back to the moderator.
Page 5 of 13 We will now begin with the question-and-answer session. The first question is from the line of Krishna Shah from Ashika Stock Broking. Please go ahead.
Quickly wanted to understand what is the kind of ramp up period that we are expecting for all the new hotels that are going to come in the coming financial year and going forward as well?
So, for our Bangalore asset, we expect it to be operational in about nine months. Post that, the ramp up would actually be quite fast according to us. The market is already there and we would assume that within the next three to six months we would be able to actually achieve a good healthy occupancy and ARR. With 220 rooms, we think that it is possible to achieve this in a significantly quick manner.
My next question is on the CAPEX front. So, are we planning for any fundraise to fuel our future CAPEX as of now? Sorry, could you repeat that?
My next question is on the CAPEX front. So, are we planning any fundraise for the future CAPEX in the next financial year or going forward?
So, we are well funded right now. We have just come out of an IPO, raised ₹ 1,800 crores. We do have significant operating cash flows being generated right now. And as I said, our net bank debt-to-EBITDA is only 1.5x. So, we do have significant headroom to take on more capital if required to fund growth. So, we don't foresee any immediate fundraise to fund our growth. We are well funded for the future projects that we anticipate.
The next question is from the line of Aman Goyal from Axis Securities. Please go ahead.
Sir, my question is related to the margin. So, before the IPO on an annual basis in Financial Year ‘23-24, we have margins around 40%, but now margin is tracked to 30% level. So, could you throw some light on it?
I think that's a good question. So, there are two broad things which you need to take note of. One of them is that the Grand Hyatt has been under upgradation, and we have seen that impact playout. As I said Grand Hyatt contributes roughly around 48% to 50% of my EBITDA and so, it's mothership. We have taken an extensive refurb, we have upgraded all the inventory of the rooms, we have added and refurbished a significantly large area into the grand showroom which led to the loss of ₹ 2 crores of rental. But now that area has a potential to generate ₹ 55 crores plus of revenue annually. So, that's a very, very profitable refurbishing that we have undertaken at Grand Hyatt and also the Grand Club also has all been upgraded. So, what that has done is that's impacted my occupancy and hence it has impacted the margins in the first half and also the R&M costs associated with the refurb has come in the first quarter and also, we have seen that happen in this quarter. And those are the two contributors for the margin impact. Having said that, the positive contributors for us are the ARR growth and we are seeing quite robust ARR growth continue across our assets. And as we move into the second half, the positive traction of ARR growth coupled with the full inventory of upgraded rooms at Grand Hyatt being
Page 6 of 13 available to us and the traditionally strong season as we enter into the second half we would definitely see the margin expansion happening to normalcy. As I said, in the first half adjusted for the one-time we are at 37% EBITDA margin and we anticipate the second half to have a margin expansion.
My question is regarding the newly acquired hotel, Bengaluru. So, the inventory will be available in the phases manner or the 220 will be deployed in a single shot? It will be done on single shot.
My question is regarding the overall industry view. For example, the economy if you recently see the FMCG sector, retail so they have some sluggish growth. So, how do you see the impact on your industry level like in hospitality, especially?
That's a good question. Basically, you have to look at hospitality growth trajectory primarily on the basis of the lack of new supply coming in the market and continuing robust growth in demand. We are seeing that in the metro city market there is already a growth coming in from the foreign travelers who were not coming to India for the last two years post-COVID, now has been steadily increasing. So, I am absolutely am gung-ho about the rising in our occupancy rates and higher average room rates across board. You would see all the peer hotel companies are also experiencing that same. So, the overall market in terms of revenue growth is significant and it's being projected also in the business plan being given by the operators to all the operating owners, including us. So, there is continued robust demand, it is not as sluggish, and it's not dependent on the same as FMCG market. This market is actually precursor to the growth that is likely that's coming into India market.
Could you give some guidance regarding the EBITDA for the second half or for the next year if it is available from your end?
As I said, we are at 37% adjusted for one-time items in first half, we would see expansion happening in the second half towards normalcy. We strongly believe that Juniper can achieve, on a sustainable basis, 40%+ EBITDA margin, and we should see that trajectory coming along.
The next question is from the line of Sushant from RBL Bank. Please go ahead.
Sir, my question is on the growth pipeline of the Company. So, the slide speaks about 1,000 keys to be added from FY'26 to FY'28. It also mentions about certain ROFO assets. If I am not wrong, these are Rights of First Offer that is there with Juniper. So, I just wanted to know which are these ROFO assets?
We shared this in the past and the whole genesis of ROFO asset is that the promoters want to make Juniper as the flagship or the hospitality business in India. Today, apart from the portfolio that is here as part of Juniper, there are two listed companies which are currently outside this portfolio and they would be subject to the ROFO as and when if the promoters were to decide to get them in.
Sir, one last question is, does Company have plans to expand in eastern part of the country or maybe in northeastern market, because I think that's the only metro city where we're not there currently?
So, actually at this moment we are not driven by any geography or anything. We are driven by profit potential and opportunity. So, the Eastern part or Northeastern part is actually very much part on the radar of the Company's future expansion areas. I would like to share that we are working on an asset in Kaziranga which is being leased by the Assam government and that is going to come into our fold and once we have much more clear visibility, I think by this quarter, I will be very happy to share the full details of that project in the coming quarter. We are definitely certainly looking at that area and the Northeast is a great potential in terms of luxury, leisure travel. Our space is luxury, our space is upper-upscale. So, that's where we focus on. And if you remember that the Company has a very large piece of land in Downtown Guwahati which has been sitting in our opportunity list and we are re-examining if we should launch that project now or should we be waiting for more years. So, our jury is out, our studies are being conducted, and if we find that that is the opportunity should be taken up on a priority basis, we will move it forward. At this moment, Bangalore has been our priority and our priority is going to be enhancing the revenue potential of our existing assets and acquiring new properties. So, India is our playing field, market space is luxury, upper-upscale, big box, nice properties, revenue generating. We are not looking for Pan India presence. We are looking for best profitable assets.
Next question is from line of Sumit Kumar from JM Financial. Please go ahead.
So, I wanted to understand what would be the revenue loss impact for the rooms that were out of operations for the quarter, and if you could also help me with the last quarter number as well?
We said that roughly in the last quarter, there were 25% of the capacity, which is roughly around 130-odd rooms which were outside the available inventory. I think offline we can share that with you, but it's a material number at Grand Hyatt. As I said, 25% plus of inventory at Grand Hyatt, which constitutes 50% of my EBITDA.
So, this means that the entire inventory, which is like 600 plus rooms have been refurbished assuming that in a quarter you are doing maybe 300 rooms and that 100 rooms takes one month to refurbish?
This is Varun here. So, we have 547 rooms and 120 apartments, all of them have been refurbished. And in terms of the rooms out of the 547 rooms, 420-odd rooms are fully refurbished, the suites will also be done in a phased manner going forward, but as of now 420 rooms out of the 547 rooms are done and the remaining rooms which will happen in the immediate future, we actually have good strong demand coming in. And the reason why this was all taken in first half of this financial year was after the elections in May, we realized that the demand was a little soft in Bombay. So, instead of doing 40 rooms in a phased manner, we took the entire count of 420-odd rooms and refurbished it so we are ready for H2.
Page 8 of 13 Just adding to what Varun said, for the immediate month going forward, with the refurb inventory being released, we are finding tough to even accommodate the demand that is coming in, including the new rooms that have been released. So, that's the kind of traction that we're seeing in the market.
My second question is on the ballroom. If you could guide us, what is the business on books looking like for the upcoming quarter?
So, we expect this new banqueting space to generate approximately ₹ 50 crores of revenue on an annual basis. These are for high-end events, this is not your typical banquet where you accommodate 1,000 people at slightly lower rates, this would be a market leader in terms of average pricing and we have very strong demand in terms of business on books. This is high season; Q3 and Q4 are strong and this is what we are expecting. We had a large launch event on 17th, 18th of October, very well received by the market, all the event planners, the organizers were all there. They have experienced the new showroom, and we are seeing very healthy demand going forward.
The next question is from the line of Prashant Biyani from Elara Securities. Please go ahead.
Sir, extending on the last participant's question, how is the business on books for GHM as a whole for Q3 based on the current visibility?
For Grand Hyatt Bombay, if you are asking about Q3 and Q4, what I can share with you is as follows. With the full inventory back, we are expecting occupancies upwards of 80% and rates which are competitive in the market. As far as I can recall, Tarun, you can confirm. I think the rates are 13,000 to 15,000 range and given that that this is high season, I think the traction will be even stronger and business on books is solid.
Sir, for showroom, what would be the comparable comp set in the city?
See for the comparable comp set, there is none. This is redefining the hospitality and the MICE and the social event space. Mumbai was ready. This is global scale. This is far beyond Dubai and Singapore. This is going to be a game changer, and this is going to be an example for others to emulate. At this moment, if you say who is coming closest to us in terms of decor and offering?
Nobody. If you look at the closest in terms of range, that would be charged. I would say that closest would be Taj Mahal Hotel in Downtown Mumbai. They would be charging around ₹ 7,500 to ₹ 8,000 and we would be exceeding that number in our expectation in this quarter. So, if I may answer you the question, the closest would be the Taj Mahal, but otherwise we are the market leader, we will define the market and we will reap the benefit.
Sir, I would like to on your behalf extend an open invitation to the analyst, we can coordinate through the investor relations desk here. If anybody's interested in seeing pending availability of the showroom as a venue, we'd be happy to showcase.
Mr. Jaitly, can you quantify the one-time overhead expense for Q2 separately?
Page 9 of 13 The Q2 expense is ₹ 11-odd crores and for the half year it's ₹ 18 crores.
In the opening remarks, if I had heard correctly to Mr. Saraf, he said that for Marriott Bangalore, there will be additional 50,000 square feet of MICE opportunity apart from existing 29k, have I heard him right?
No. If I may correct this at this moment the existing facilities are having approximately 50,000 square feet (Including open lawns and event garden) of MICE space in the existing hotel. And what I have said is that is much larger than the 220-room capacity existing hotel. So, there is additional 300 room potential in this property and that would be decided once we open the property, and going forward with it. But the existing opportunity combined with the new opportunity will lead you to the 500-room number that this property is capable of achieving. In terms of additional MICE space, we are not doing anything, we are just going to complete this property and get into the market and start reaping the benefits of the acquisition.
To start the hotel up and running, how much will be the further CAPEX that we'll need from here?
About 80 crores is what we are estimating; about ₹ 60 crores of CAPEX and ₹ 20 crores more of additional expenditures of different nature, operator fees and stuff like that. So, there would be a lot of additional. So, ₹ 80 crores is the CAPEX that we are expecting to spend money on.
Mr. Jaitly, out of ₹ 80 crores, how much are we going to spend in this year and how much will be shifting to FY'26?
So, in this current fiscal, we would spend roughly anticipating and I don't want to give too much of a detail onto it, but between 70% to 80% of this will be done in this fiscal and the balance flowing in into the early part of next year.
Next follow-up question is from the line of Aman Goyal from Axis Securities. Please go ahead.
My question is regarding the subsidiary CHPL. What is the absolute margin and EBITDA margin for the subsidiary?
So, in the first half, chartered hotels have clocked revenue of ₹ 56 crores and broadly ₹ 14.5 crores of EBITDA.
My last question is since the new room is for the Grand Hyatt, Mumbai, so will there be any revision in the room rent like any premium will be charged from the previous room rentals?
Yes, with the upgraded offering, as I said, we're already outperforming as we speak with our compset and city ARR growth early in my opening remarks, I've kind of said that we have achieved 10% growth in ARR in Mumbai. As we launch this fully upgraded Grand Hyatt, we are able to capture higher paying segments on a consistent basis going forward. So, it will have a forward going positive trajectory of increasing ARRs.
Page 10 of 13 The next question is from the line of Nikhil Agrawal from Kotak Mahindra Asset Management. Please go ahead.
Sir, just a clarification. For the Bangalore asset you mentioned that for the 300 additional rooms you would be spending about ₹ 400 crores, right?
Absolutely no, sir. What we have presented to you is that our existing cost for acquisition of this asset has been ₹ 325 crores. To open this hotel, we will be spending another ₹ 75 crores to ₹ 80 crores. So, total existing cost of acquisition and completion of the project of this asset of 220 rooms will cost us ₹ 400 crores. The additional 300 rooms is the capacity because the site is 6.5 acres. It's a huge site gentleman, and in this site we have a capacity and FSI to add 300 more rooms. When those rooms will be added, if in the future, I am in no hurry to start adding those rooms, but this is to give you the perspective of the potential of the Bangalore property. This is not a squeezed property in some corner of Bangalore. This is a robust, beautiful property sitting on the main highway leading into the airport terminals. So, this is something that I am so proud and excited about. The 300 rooms is a future potential that I have shared with my investors. Thank you.
Secondly, like what is the status of the foreign tourist arrivals in India like we were expecting FTAs would bounce back to pre-COVID levels if not more, So, are we seeing backtracking during this quarter? what are the bookings if you could throw some light over the next 2-3 months, are we seeing those FTA arrivals in India as of now?
So, traditionally, H2 is half where you will see this foreign travel coming in. H1 was not up to the mark. I think the whole trajectory has continued, but this year you will see the actual impact of that foreign tourist coming in to pre-pandemic level. I think this is what you should be watching out in the second half of this year. That will give us all indication of what is to follow up.
Also in Grand Hyatt, Mumbai, I believe you also initially had plans to add another 293 rooms and 24 service apartment. So, is that plan on track? I believe you were supposed to commence work from FY'26 or '25.
This plan what you have the numbers, they are absolutely right numbers. We have approval from the BMC to add additional three floors and add these rooms. As we sit here, these are stamped, approved plan from BMC. Our target to start that was in Financial Year ‘26-27. We are not at this point in rush moment to start that project because we feel that the market is so strong and the demand is so strong, so we do not want to at this moment disturb the Grand Hyatt Mumbai's revenue potential. So, this is something that we are sitting on it and this is in the future. '26-27 would be the start and would be taking us about 18 months to complete. But I shall not be held for that date because I would be watching about the revenue potential and what we may have to lose if we start the work sooner. So, we will time it correctly. Gentleman, watch for the next word.
Next question is from the line of Tejpal Singh. Please go ahead.
So, how is the intensity because there are lot of new room addition but as the industry we are seeing the demand side is very good, so how we are seeing competition two year going forward?
I think if you look at Mumbai micro market that we are operating in, the supply that has come into the market was the new hotel that is just now opened, the Fairmont at the international terminal next to JW Sahar. Besides this, in our luxury segment, there is no other additional capacity being added over the next 30 months to 36 months. That's two and a half to three years.
I do not expect any additional capacity to come in. There is an announcement of two hotels in the BKC vicinity, but those are yet to be finalized and their drawings yet to be approved. So, we are there. We will see this kind of announcement, but I don't have any visibility of having any serious supply coming into the Mumbai suburban market of the BKC airport zone at the upper- upscale and luxury segment.
Next question is from line of Khusboo Mittal, individual investor. Please go ahead.
Sir, can you please tell the like-for-like growth on a consolidated basis?
As I was saying earlier in the call, if you look at the first half the revenues would have grown 10% YoY and the EBITDA adjusted for the one-time cost has grown 15% YoY like-to-like. So, last year, adjusted for chartered and this year adjusted for one-time.
Next question is from the line of Raghav Malik from Jefferies India. Please go ahead.
So, just two questions from my side to follow on to our previous participants asked. One is for the foreign tourists to domestic tourists kind of split maybe pre-COVID and currently if you could give us some indication either for Grand on an overall level?
Specifically, if you look at the pre-pandemic and current levels, the pre-pandemic for Grand Hyatt foreign tourists were roughly around 40%-odd and we are at half of it in Mumbai and that's a trend that we are seeing majorly across all the assets that we operate right now. And we anticipate as the global scenario stabilizes and also as we get into the second half of this year, we anticipate that to pick up and this contribution will go up.
I would like to add here. In the Mumbai market foreign traveler has not come back to the pre- pandemic level, which was starting at 39% to 40%. At present we are at half about 20%. But if I was to give you an example, what has happened in Delhi, in Delhi, pre-pandemic, we were sitting at 42% in our Andaz hotel were foreign travelers, now we are sitting closer to 50%. So, the Delhi market has actually revived in terms of foreign visitors because of their diplomatic and other activities that is going on. But when it comes to the financial activity and the market of Mumbai, I am expecting that this is going to see a rapid catch up and this half year that we are looking at, I am expecting this to be touching more closer to 35% rather than 20% that we are experiencing it today. But the industry experts advise us that this is already they see this happening now.
So, just on that, sir, so like the Andaz 50% number would include branded residences or just for the hotels?
Page 12 of 13 Both.
Last question is on the number of the keys that are coming up additionally, the guidance of 1,000 keys you gave beyond the Bangalore asset and the new acquisition you stated, organically, if you could give us some guidance of which market do you anticipate growth in those keys like would it again be the three floors of Grand Hyatt or what would those 1,000 keys kind of include from an organic basis?
See, every Company and every management always starts with a good achievable target. Our management and Company and the development team of Juniper has set a target of 1,000 additional keys over the next one year's period. We have now brought in 220 rooms out of Bangalore and the remaining actually there is a certain amount of these keys are already sitting into the Saraf assets which are outside Juniper, and they are also listed companies. So, I am not at any liberty to give you any more indication than what the board of that companies decides on the timing. But I can only assure you that all Arun Saraf assets outside this platform will be migrated into this platform as and when the regulators allow. So, out of the 1,000, I am expecting another 500 to migrate from these assets. So, you are now looking at about 250 room additional acquisitions that we need to be making, and our development team has leads into many, many markets and we are engaged with many of the NCLT and other assets that are on the market.
Wait for the good news, sir. Once I have it, I definitely would love to share with you even before I close it. My only challenge at this moment is I do not wish to mislead you. I can only share with you what is the target that development team of this Company has set for themselves to achieve and I am very confident that we shall achieve it.
Next question is from the line of Sugandhi from Fedex Securities. Please go ahead.
Sir, with regards to your expansion plan, I understand that there's only some bit of information that can be disclosed, but you would have a fair understanding of what is going to cost to add those 1,000 keys? And just linking that to the leverage level that you're comfortable with if you can give us the kind of internal guardrails on net debt-to-EBITDA or net debt-to-equity that you've set for the said expansion? And also you know just spacing it out over a period of three years, would it depend on opportunity or would it be evenly spread? And the second question would be if you could give us a flavor of the profitability of the Bangalore asset as compared to the group as a whole?
So, let me take this first question. We have shared in the past that the assets that come in would be done in a manner which are value-accretive to Juniper and we kind of maintain that and we iterate that. As far as your question on, whether we have headroom on debt? Yes, as I said, we have 1.5 times net bank debt-to-EBITDA and that leaves a significant headroom for us to take on more debt if required to fund the acquisitions. Also, some of the planned acquisitions may have EBITDA - already operational assets would contribute to EBITDA by day one as they come in. So, on a blended basis, we would anticipate net bank debt-to-EBITDA of roughly around 2.5 to 2.6. But again, I would like to caution you, it can move up a little bit in the quarter that the acquisitions happen and down rapidly once these assets starts contributing. But on a sustainable basis, our target is not to breach 2.5 net bank debt-to-EBITDA. So, I just want to add, in the past
Page 13 of 13 we have shared is that the mechanics in which these assets would come in at least from a ROFO standpoint would be done in a non-cash share swap transaction.
Sir, on the Bangalore asset and the pacing of the expansion?
So, Bangalore asset is a marquee asset and if you see the trends that the Bangalore market is witnessing, it's witnessed one of the highest ARR increases and we are fairly excited to be there, and in the micro market, the ARR ranges between 15,000 to 20,000 and we believe that we would be able to price it at a fairly attractive rate given the fact that we are talking about and this should start contributing in latter half of FY'26 and achieve a sustainable margin for the full year FY'27.
As there are no further questions, I would now like to hand the conference over to Mr. Tarun Jaitly, CFO for closing comments.
Thank you so much. I would like to thank everybody for taking out time to come on to this call.
If there any follow up clarifications or queries, please feel free to reach out to us or the Investor Relations desk and we would be happy to answer them for you. Thank you again for your time and look forward to seeing you in the next call.
On behalf of Juniper Hotels Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.