Juniper Hotels (NSE:JUNIPER) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Q2 and H1 FY 'twenty seven Earnings Conference Call of Juniper Hotels Limited. As a reminder, all participants' lines will be in listen only mode, and there will be an opportunity for you to ask question after the presentation concludes. Please note that this conference is being recorded. Certain statements disclosed in this presentation or that may be disclosed over this call may relate to company's growth prospects that are forward looking statements within the meaning of applicable securities laws and regulations. These forward looking statements are not guarantee of future performance as they are subject to known and unknown risks, which are beyond the control of the company.

0:53 We have with us today mister Arun Sarraf, chairman and managing director, mister Varun Sarraf, chief executive officer and mister Sandeep Joshi, VP, finance and accounts, company secretary and Compliance Officer. I now hand over the conference to Mr. Varun Sarab. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on the earnings call for Juniper Hotels for Q2 of financial year twenty twenty seven. I would like to start by announcing the opening of our Western Bangalore hotel at the airport. In this quarter, we have also signed the binding MoU for the acquisition of Novotel and Magica, an operating asset with two eighty seven keys in the outskirts of Mumbai.

1:46 Our quarterly results show strong resilience of our operating portfolio and build a solid foundation for H2 and the full financial year 'twenty seven. We have made significant progress on our greenfield projects as well, and more on that later. Let me share a brief overview on the operating performance for the quarter. In this quarter, total income increased by 10% year on year to INR $2.58 crore, while our EBITDA stood at INR 91.4 crore. Profit before tax rose to INR 49.1 crore. For H1 FY 'twenty seven, total income is at INR $5.10 crore and EBITDA stood at INR 180 crore and Pat at INR 70. Sandeep will give us more details later.

2:34 Q2 is typically a soft quarter for our industry, but our portfolio delivered 9% year on year growth on average rate and 12% growth on RevPAR. Corporate travel and F and B led contributed to support our hotels across Mumbai, Delhi and Ahmedabad. As we move into H2, strong industry tailwinds and increased demand from social and mine segments will contribute to a strong performance for the financial year. I would now like to highlight two of our most significant strategic developments for the quarter. The opening of Western Bangalore marks an important milestone for the company. It is our first hotel in Bangalore as well as our first hotel with Marriott. The soft opening of the two thirty eight room Phase one happened in October with walk in guests expecting post Diwali and online bookings starting December 15.

3:27 This places us in a strong position to participate in Bangalore's premium hospitality market, which is supported by strong corporate travel, GCC led growth demand, aerospace, defense and manufacturing led business coming into the city. The second is our acquisition of Novotel Emagica, an operating asset with two eighty seven keys in Kapolei, which is located in close proximity to Mumbai and about one point five hours drive from the Mumbai International Airport. In October, we signed a binding memorandum of understanding with Imagica World Entertainment Limited for the proposed consideration of approximately INR $2.48 crore at INR 86 lakhs per key. The hotel should start contributing to our top line in Q4 of FY 'twenty seven.

4:16 Novotel Imagica marks our entry into the leisure segment. We have been looking for strategic acquisitions for some time, and this asset meets the criteria of a large asset with multiple revenue streams. The hotel is located on approximately 11 acres with some additional development opportunities. The hotel will be able to maximize on leisure and MICE demand being generated from Mumbai as well as some corporate demand from nearby industries. In the short term, we intend to do a minimal refurbishment and continue to operate the hotel under the existing brand. In the long term, we will be doing a full renovation and repositioning the hotel with the upper upscale brand, which would significantly enhance our revenues. Post renovation, we envisaged an improvement in average rate by almost 35% and more than 100% increase in our top line.

5:11 Moving on to our greenfield developments. We are happy to share that we have made significant progress on this as well. Construction for Phase two Bangalore comprising of two seventy five keys is underway. Excavation has been completed and foundation work is in progress. We expect the hotel to be operational by FY 'twenty nine. Together, these two phases will comprise of five thirteen keys with the indicated combined development investment of approximately INR $8.50 crore. Now turning to New Delhi, where we are developing the Grand Hyatt with approximately five fifty keys on a 2.5 acre site. The total development with 700,000 square feet is our quintessential big box asset with multiple revenue streams and multiple demand generators.

5:59 The concept design has been approved, and we expect to break ground in Q4 of FY 'twenty seven. As highlighted in the past, there is negligible upfront for the land acquisition for this development, resulting in a high ROCE of 21 Further, we have a five year license fee moratorium during which no license fee has to be paid to the authorities, resulting in a lower overall project cost. Once operational, the company would have more than 1,000 keys in New Delhi and capture opportunities arising from the rapidly expanding convention business and premium hospitality around Behiro City and Yashopumi. In Guwahati, our proposed Grand Hyatt development will comprise of two seventy seven quays, including branded residences and will unlock the potential of a strategic land parcel, which the company owns. Concept designs have been completed with civil tendering underway. We expect to break ground in Q3 of FY twenty twenty seven.

7:01 Our luxury wildlife resort in Kaziranga is also under development, and we expect to complete the resort by FY 'thirty. We have also started our commercial tower in Mumbai and hope to break ground on that in early part of FY 'twenty eight. These five projects, as mentioned, are have an outgo of INR 2,000 crore and work has moved significantly forward in all the five projects. These projects, together with selective acquisitions, support the growth ambitions we have outlined in our analyst meet to double our inventory and EBITDA by FY 'thirty-'thirty one. This is a multiyear objective, and execution milestones and funding discipline will be paramount.

7:48 ROCE post completion of these projects will be at 19%. Our balance sheet remains strong with gross borrowing reduced INR 700 crores at September end, while cash balances increased to INR 70 crores. Net debt stood at approximately INR $6.33 crores at 1.5x EBITDA, giving headroom for additional debt for strategic acquisitions. In Q3, we will also be proceeding with dilution required for the MPS compliance. All consultants and legal advisers have been ordered onboarded and work has commenced on it. We are extremely encouraged by the performance of our operating business and the progress we have made in our growth initiatives. Our focus is to improve the profitability of existing hotels by a higher flow through and efficiencies.

8:39 With that, I would like to hand over to Sandeep, who will take us through the financial performance of the company. Thank you, Varunji, and good afternoon, everyone. Let me take you through our financial performance for the quarter and half year ended 09/30/2026. In Q2 FY 'twenty seven, revenue from operations grew 8% Y o Y to INR 249.5 crores compared with INR 230.3 crores in the corresponding quarter last year, while the total income increased 10% to INR 258.1 crore. EBITDA stood at INR 91.4 crore compared with INR 87.3 crore a year earlier, translating into an EBITDA margin of approximately 35% on total income. While margin moderated from INR 37 crores in the corresponding quarter, our operating portfolio continues to generate healthy earnings despite the seasonally softened quarter.

9:34 Importantly, we witnessed a significant improvement in profitability below the EBITDA level. Finance cost declined by 50% to INR 15.3 crore from INR 30.3 crores, while depreciation and amortization reduced to INR 26.7 crore from INR 29.5 crore. Consequently, profit before exceptional item and tax increased to 80 to INR 49.4 crores, while reported PPT grew to by 108% to 49.4 crores. PAT increased by 121% to INR 37.2 crores compared with INR 68.8 crore in the corresponding quarter last year. Moving on our half yearly performance, revenue from operations grew 11% to INR $4.99 crore, while total income increased 10% to $5.10 crore.

10:27 EBITDA increased 4% to INR 180 crores, while profit before exceptional items and tax grew 51% to INR 94.2 crore. Reported PBT increased to INR 94.2 crore from INR 41.6 crore last year and PAT registered a strong growth of 173% to INR 70.4 crore compared with INR 25.8 crore in H1 FY 'twenty six. On the operating front, for Q2, our average group rate increased by 8.6% to 11,504, while occupancy remained healthy at 75%. Our balance sheet continues to be a key strength, providing us with a significant financial flexibility to support our next phase of growth.

11:16 As of 09/30/2026, the total assets stood at INR 4,003 and 43 crore, while our equity base strengthened to INR 2,940 crore. Gross borrowing declined to INR $70.03 crore from INR $7.39 crore in March 26, while cash and balance stood at INR 70 crore as of 09/30/2026. Importantly, our net debt reduced by approximately INR 87 crore to INR $6.33 crore with a net debt to EBITDA at a comfortable 1.4 times to EBITDA. Our debt profile remains well structured with a long term maturity of ten to twelve years, while our AA minus credit rating with a stable outlook further reinforce our financial strength and creditworthiness.

12:06 Additionally, we have an undrawn credit facility of INR 125 crores, providing further liquidity headroom to support our capital expenditure and working capital requirement as and when needed. Together with this factor reflects our strong financial positions, disciplined capital management and significant flexibility to execute our development pipeline while maintaining a healthy and resell and balance sheet. I would also like to address an important point that has come up during our discussions with investors in the past on the return on capital employed that is ROCE. While our reported ROCE stand at approximately 8%, it is important to recognize that our capital employed includes the impact of land value and certain India's accounting adjustment.

12:53 After adjusting for this notional accounting impact, the ROCE for our existing portfolio improves to approximately 17%. As we continue to deploy capital towards our development pipeline, improving capital efficiency and generating stronger returns on capital remains our central focus. For clarity purpose, we have included the ROCE working in our presentation. To conclude, we remain confident to deliver sustained revenue growth, stronger profitability and improving return on capital as we enter the seasonally stronger second quarter second half year with progressive contributions from new assets that invest in Bangalore and Novodil and opportunity to grow organically from our existing portfolio.

13:42 With that, we would be happy to take your questions. Thank you. Thank you very much. So, we will now begin with the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is assembled. The first question is from the line of from Valium Capital Advisors. Please proceed with your question. Hi. Good afternoon, Varun. Varun and team. Am I audible? Yes, sir. You're audible. Yes. Great. Yes. Varun, my question was more relative and more from a relative performance perspective, so this quarter, Delhi has seen very good business in terms of mainly originating from the BRIC Summit, and that is reflected in the commentary of a lot of our peer sets.

14:47 But if we look at Andaz at 10% growth this quarter Y o Y, it's much lower than what the industry is reporting at 20%. So any reason why we are seeing a subdued growth there? For us, I actually don't see it that well, Ukesh. Maybe the others, I don't know what peers that you're referring to, but there are some hotels which are very city center hotels like the ITC and the Antarctica, whatnot and the Taj that have very specific diplomatic But business that comes if you actually look at the overall market in Q2, which is the softest of the two quarters, we have done significantly well. If I go back to exact numbers for Delhi and the growth that Delhi has done, let me give you some numbers. Do you have the numbers open?

15:38 Sandeep? I think Andaz in Q2 delivered a top line of 83 crores compared to INR 77 crores while it was. So there was 7% growth. And then and if you see, I think it is again, it is driven by rates. I think occupancy has stayed pretty much that. It's rates driven, and that's what we've capitalized on. I think if the events weren't there, then it would have actually been a pretty subdued quarter for Delhi assets all in all. Got it. Got it. My second question was on the other expenses. So that has increased just on a Y o Y basis from '81 to about 97.

16:28 So what are the reasons driving those expenses, if you could share? Yes. So there are certain expenditures that has increased in this quarter, especially your HLP cost. So there has been increase in the gas price mainly at Andaz, Grand Aft and Ahmedabad. So this pertain to utilizations towards our laundry and kitchen. So there has been impact because of the Middle East conflict. So the gas prices have gone up. So it has impacted around INR 1.52 crores in this quarter in the HLP cost. And there was also a GST ITC credit impact. So GST 2.0, which came in Q1 in FY 'twenty seven.

17:14 So further impact of almost around INR 2 crores. So because of the ITC credit, which we could not avail for the rooms, which we sold below 7,005 And just so those are the two sort of big ones. But again, going back on the HLP component in gas, right, since we mentioned laundry and kitchen, right? A lot of our gas fired equipment, we've already taken corrective measures to actually replace them with electric and especially in Bombay, where our equipment would anyway do replacement. So going forward, we are also moving away because we see the gas prices staying there, but corrective actions have been taken to address those challenges. And we believe that this is a quarter where you have to see some impact.

18:04 But going forward, it will come back up. Ladies and gentlemen, to ask a question, please press star and one now. Next question is from the line of Hill from Choice Institutional Equities. Please proceed with your question. Hi. Thank you for the opportunity. On the expansion front, Western Bangalore has commenced its soft opening. So what would be the expected time line for the operations and the stabilized EBITDA contribution?

18:49 Also along following up the brownfield acquisitions that around 600 potential geys are to be added. What is the expected time line for that as well? Sure. So post Diwali, we will start taking working customers and online booking channels are open from the December 15 of this year. So quarter four of the financial year, you'll see a full quarter of the revenue from Bangalore coming in. And in terms of stabilized revenue, Sandeep, please comment So on I think FY 'twenty eight, we are estimating a revenue anywhere between INR 100 crores to INR 125 crores at a margin of 38% to 40%.

19:35 Got it. And what about the 600 expansion fees? And you were asking about the brownfield. I think the brownfield acquisition that we had was the Imagica Novatel, which has now been complete. The consolidation into the company will happen in Q4, and that those numbers will also start getting reflected. I think we have been very conservative in taking the numbers coming from Western Bangalore and Novatel in FY 'twenty seven. So we have taken some revenue in the last quarter with some nominal the EBITDA flow through coming in Q4. But I think we will see the stabilization in FY 'twenty eight with one hundred to one hundred twenty five top line from Westin and around INR 75 to 80 crore in FY 'twenty eight.

20:30 Okay. And any other brownfield acquisition plan for the year? There are certain assets that we are in discussions with. I will not be able to share more, but we have in our investor presentation, we still have about 400 odd rooms that we are in discussions with. And whenever I have more, I will come back to you. Okay. Okay. Sure. And one last question. So ARR grew 9% for this quarter. So how much for the room do you see in ARR growth across the entire portfolio? H2 is a much stronger half. I think the rates will be much higher compared to what you have in H1. So there is significant upside on that. I think I won't be able to give you a number, but yes. So I think H2 is always considered a stronger period for us where we achieve 60% of our annual revenue.

21:27 So I think Randaz and Andaz should continue to drive the performance with healthy ARR and occupancy. We still see that there is a headroom in terms of rates compared to our And comp secondly, the demand, which we see that which will be driven in this micro market. We saw the performance in October, and we see a healthy year on year performance across our portfolio. We are confident to achieve our budget set in FY twenty twenty seven with a double digit growth and incremental revenue we feel from Bangalore and Novate in Q4. Okay. Got it. Thank you so much and all the best.

22:13 Thank you. Thank you. The next question is from the line of Karan from Choice Institutional Research. Please proceed with your question. Sir, so given the last question, I think your next year revenue would be closer to INR 1,500 crores and 20% revenue growth. What kind of margin would you guide for? Sorry, I didn't quite hear what you said. Please, could you repeat that? Yes. So given that you said about INR100 odd crores, INR120 odd crores from both High America and the Westin, So that would add like INR $2.40 odd to our top line, roughly 20% odd.

23:02 And leading this calculation is correct for the next year? Unfortunately, I cannot give you any guidance on those numbers. But typically, what we are doing is anywhere between 40% to 42% at the corporate level EBITDA. You have the numbers. Mean, the numbers coming in, we have shared what we expect stabilized revenue to at Bangalore and at Imagica to be. So I would leave it at that. But we see very strong headwind in this quarter, this quarter, meaning Q3 and Q4. And that would again continue on in the next year as well. So we don't see any reason to worry about. Got it. Got it. On the America front, so America especially nowadays used to have faculty for visiting day passes with dynamic. Does that change anything for us? Will we continue those kind of offers? Will it reduce cost? And how will that work?

24:03 So we are acquiring the assets from them. There is no arrangement, but we are located in close proximity to the theme park. During off season, if there is demand that is being generated by the park, by the theme park, we will, of course, partner with them, but that does not result in discounted rates. If a guest coming to the theme park needs to stay with us, we would offer them the room at whatever the market price is. But again, it depends on business strategy, right? This is a two eighty seven key hotel. We have enough rooms to sell. And during downtrend, the theme park is what will actually help us build our base business as well. So one of the reasons for acquiring this asset is, again, because it has multiple revenue streams.

24:50 We were able to get business demand generated from the theme park, driven by large conventions that we can hold in the banqueting space, by leisure travelers coming out of Bombay. So for us, we felt this was a very good fit, and it would allow us to go into the leisure segment as well, eventually resulting in even a further upside once we're done with the renovation. The idea is to integrate this asset in the first couple of years, start bringing in the top line, start letting it contribute and then reposition it at upper upscale with the full refurbishment. Got it. And what time line are we expecting to open the asset? The asset is operational, generating about INR 60 crores to 65 crores of top line.

25:40 We believe in the first year, we should be touching INR 80 crores once it is consolidated into Juniper. Okay. Got it. Thank you, sir. That's all from my side. All the best. Thank you. The next question is from the line of from Hitec India Securities. Please proceed with your question. Hi. Thanks for the opportunity. My first question was related to our Mumbai efforts. For Grand Hyatt Mumbai, do you foresee any impact because of Terminal West 1 getting shut down that demand be transferred to Mumbai especially given we have a decent amount of room mix. And related to this, with Hyatt Region in Mumbai under renovation and could get operational for a few quarters, Would that opening have any impact on Grande Air Credit One, especially given the properties under control of the company? Sure.

26:44 The Q1 moving to the new Navi Mumbai Airport, I do not see any impact because of that. The demand generators for our asset are large conventions groups, which is still there. We have close proximity to Bandarakura Complex, the commercial hub. The F and P business remains very strong. I think the shifting will only result in more flights coming into Mumbai, which will further strengthen our position or which will further develop Mumbai as a destination for these large conferences and other business activities. So I don't see any impact because of the terminal shifting or the airlines moving to the new terminal. Going back on the question that you asked about Regency Mumbai, I'm not in a position to answer anything related to that. This is a separate entity.

27:35 And finally, in terms of demand, I think Mumbai, with new assets opening up, the demand is very, very strong in the city, and rates are up to $1,300,514,000. So strong demand, I don't see much impact of any new opening or of any of the terminal shifting in Ganhai performance for the remaining of the year or even going into the next year. Understood. Second question was on our margin. We have seen a flattish margins for this quarter because of staff increase in the other direction. You mentioned in your opening remarks that it has been partly because of the GST 2.0 impact. Going forward, what kind of margin clarity can we expect? Would you should we expect to normalize margin trajectory in terms of gradual expansion going forward? Or would there be incremental impact?

28:32 So I think, see, last year in FY 'twenty six, we have achieved at corporate level an EBITDA of 42%. And at the operating level, it was around 44%, 45%. Right? In this quarter, we have seen some impact because of the HLP, GST and some provision increase and some onetime expense. But I think we are in line with our target of achieving at corporate level of 42% margin for the full year FY 'twenty seven. The The next question is from the line of from Green Portfolio. Sir, on the three brownfield, SFG flag, nootil is one. Could you please throw some light on the status of other two? And when should we expect the further inorganic announcement within this fiscal year or next?

29:45 Sure. So the other assets that we are in advanced stages of negotiation, you should probably be seeing them in next financial year. One is an asset which is already built. It has about 300 odd rooms, but would require extensive renovation and another is a smaller asset. So we are still in discussions for those. As and when we have further information, we will definitely share more information with you. Got it. And sir, second question is on the Ropo part, which has been delayed for a couple of years now. The Hyatt Regency Mumbai in Chennai, it was removed two years ago with eight to ten months of timeline. But now these are also dropped from the investor deck as well. Could you please throw some merit like what exactly is the findings and strength causing this delay?

30:36 Any tangible progress in the last couple of quarters? And the promoter intend to merge the all hotels of his various co promoter to the Juniper platform? Sure. I will not be able to share any information regarding that. But what I can share is the intent as in when the promoters do get their other assets in their purview, we will bring it to our shareholders who will have the right to decide on the future course of action on that. It would be the majority of the minority who would decide since we would be the promoters would be related party, right? So they have no say in it. But anything beyond that at this stage would just be speculative, so I should leave it at that. We have been able to show strong growth in spite of the ROFOs not coming in.

31:29 The growth is intact, and the company has achieved point of 80% of CAGR over the last two years. So I think the growth is intact. And the future growth also with the brownfield acquisitions and the greenfield projects, all are aligned. So I think ROFO is something that we should not really dwell on going forward. As I mentioned... ROFO part has been fixed now. You see, you cannot say it is dropped or not dropped. How it works is the company, Juniper has the right of first offer. They have the right to decide. And as and when those opportunities present itself, the shareholders of Juniper will decide on the best course of action.

32:23 Sure. Sure. Thanks. All the best, sir. Thank you. Thank you. The next question is from the line of Sumit Kumar from JMP Financials. Congratulations on good numbers. My first question is on the Bangalore asset follow-up to the projected stabilized numbers. What is the ARR that you've assumed and the contribution from FNB to arrive at that number, if that's possible to double?

33:17 So for I would like Sandeep give the numbers, but for an asset like this, I would imagine that you would take about in the first phase, when we have the two thirty five rooms, about 30% to 35% F and B revenue. But once you're fully operational with the five twenty keys, the F and B component will go up to 40%. Will be... Correct. Okay. Fair enough. And on the profile of the customers, do you expect a high proportion of... Or a considerable proportion of crew traffic because of the proximity to the airport, or you are targeting some other customer segments, especially at the start of the operations?

34:07 Sure. Sure. So the Western is positioned as an entry level luxury brand in the country. The prices will be very competitive. For us, it wouldn't matter if it's crew or group as long as the price points and the ARR is being achieved. If I'm not mistaken, starting ARR would not be less than 13,500 to $14,000 going up further. So at that rate, if the crew is willing to stay for it. But given that they have mid market and upscale brands in the vicinity, I believe that enough other lower end business that can be taken by them. If you see the concept today, so there are three properties. We have Taj Bangalore, having three seventy Keys, then Leelab, Bhatia 281 Keys. Can I so just to add, there are two assets that you want to see? There's a Hyatt Centric that has opened up and Amoxi. So those will take care of that business that you were talking about, Sunil.

35:14 Okay. Understood. On the my second question is on the CapEx spend and debt levels going forward. What part of that 2,000 odd crores will be spent in the next two years? And consequently, what are the peak debt levels you envisaged, let's say, at... Maybe end FY 'twenty nine maybe? So I think if you see our past guidance, we have told that we intend not to bridge debt to EBITDA of 2.6x. And on the CapEx front... Sorry, let me correct. Not to 1.6x. Of our debt And to our CapEx plan for next eighteen months is we plan to spend around 25% to 30% of our CapEx what we have planned. So we have planned CapEx of around INR 2,000 crores.

36:16 So in next eighteen months, we plan to spend around 25% Okay. Thank you. That's helpful. That's all from my side. Thanks for the opportunity and happy to hear you. The next question is from the line of Nidhan from Ingrid Equities. Please proceed with your question. Evening. Hi, sir. Sir, in your opening remarks, you mentioned that you are moving on Grand Hyatt, Guwahati and Delhi. So are these brands finalized for those two properties? Yes, that's correct. We have signed the draft term sheet for the brand for Grand Hyatt Delhi and Grand Hyatt Kohati. Okay. Yes, that's all from us. Thank you.

37:02 As there are no further questions from the participants, I now like to hand over the conference to Mr. Varun Sarraf for closing comments. Over to you, sir. As we move forward, we remain confident in the long term potential of India's hospitality sector and Juniper's ability to capitalize on these emerging opportunities. Our operating assets, development pipeline and strategic approach to portfolio expansion provide a strong foundation for creating long term stakeholder value. Wishing everyone a happy Diwali, and thank you for joining us for this call. Thank you. On behalf of Juniper Hotels Limited concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.