Mahindra Holidays & Resorts India Limited (NSE: MHRIL) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Manoj Bhat — Managing Director and Chief Executive Officer
Vimal Agarwal — Chief Financial Officer
Analysts:
Unidentified Participant
Navin Koushik M — Analyst
Pankaj Kumar — Analyst
Senthilkumar Natarajan — Analyst
Shreyans Gathani — Analyst
Dhvaneet Savla — Analyst
Presentation:
operator
Foreign. Ladies and gentlemen, you have been connected to Mahindra Holidays and Resort India Limited Earnings conference call. Please stay connected, the conference will begin shortly. Foreign. Ladies and gentlemen, good day and welcome to Mahindra Holidays and Resorts India Limited Q3 and 9 months FY26 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 Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Manoj Bhatt, MD, and CEO of Mahindra Holidays and Resorts India Limited. Thank you. And over to you sir.
Manoj Bhat — Managing Director and Chief Executive Officer
Thank you. Good evening everyone and a very warm welcome to our Q3 earnings call. On the call with me today, I have Vimal Agarwal, our cfo. You can also find our results and investor presentation on the exchanges and on our company website. I hope you have had a chance to go through them. Let me start by talking about our last meeting in November where we talked about our new strategy and setting our sights on becoming India’s leading leisure hospitality provider. In a lot of ways I think quarter, I think we have stayed true to the commitment to elevate member experience and drive core business growth.
If I look at the first aspect which is about our inventory addition, I think we added about 273 keys during the quarter and our total is now about 6,000 keys. So it’s 6,015 keys. We also added three new resorts in Maharashtra. It’s a place in Ambagat near Kolhapur, Bandavgadh in Madhya Pradesh and Corbett in Uttarakhand to our portfolio. And this is continuing the journey of actually adding and giving more options in our network to our members. That’s one of the stated goals we had. We are also advancing two greenfield projects. One is in Ganpatipule in Maharashtra and Tube.
And our ongoing expansion at Puducherry Resort is going on. So that’s something which we will continue to do. Greenfields also in parallel with adding resorts from a lease or a partner led model. The other thing which we had spoken about is looking at a high quality portfolio. So just to recap, we have exited seven resorts this year and we continue to look at customer feedback and look at other aspects to look at to make sure that our overall portfolio quality is something which keeps going up and I do believe that this journey will continue into probably Q1 or Q2 of next year.
And I hope that by that time most of these reductions will happen and the portfolio will be in a shape where it is much better in terms of quality as defined by our members. The other key event during the quarter is we launched our most extensive refresh of our membership plan. We launched our plan called Keystone in December, which is on December 17th. So really it was in effect probably the last 10 days of the quarter or so. Early indicators is that there’s a lot of good member appreciation and prospects are looking at this plan very, very good, although it’s just been about a month, so I will look for more longer term trends, but that’s something which has got a very good reception.
Talking about the quarter, we added 1493 new members and that’s something which I think is in a steady state compared to the previous quarter. However, I think if I look at average unit realization or average sales value, that was a 58% rise. So it’s now at 9.7 lakh per new member added. The other thing is that if you look at what is very encouraging is our upgrades also grew over last year and that’s something which is becoming a trend and that’s something which is reaffirming our belief that as we kind of focus on the basics, I think we will see more and more validation of member interest through upgrades.
The other thing which we said was that we enhanced our sales process and adopted a completely digital model for engaging with customers through an assisted selling program called Digisales. And that’s something which has enabled us to actually get to sales quality and optimization, which is a continuing journey. But that’s something which we have achieved successfully during the quarter. Overall sales, including upgrades, stood at 145 crores. Stepping back the industry, of course, I think despite some slight disruptions in December, I think occupancy was back to record highs. If I look at November Data, it was 73% ARR, climbing to about 10,300.
So I think the industry seems to be in a very good place and I think we are also seeing some of that reflecting. If I look at our resort revenue, year on year we delivered 16% growth and our occupancy rate is 81.5% on a much larger inventory base, which does mean that both occupancy as well as growth are coming on the resort income side. So overall the performance remains very, very strong. Our consolidated revenue is up 10% year on year and as we execute on our refresh strategy, we believe that we are firmly on track to achieve our goals.
I’ll now request Vimal our CFO to take you through some of the financials and then we’ll open it up for questions. Thank you.
Vimal Agarwal — Chief Financial Officer
Thank you, Manoj. Hi everyone. Moving on to the financials, let me first call out the highlights for Mhril. Total income for Mhril standalone is rupees 415 crores which is 6% increase year on year. Within that resort, income has grown 14%. In MHRL standalone EBITDA came at 149 crore up 17%. On yoy basis our EBITDA margins have expanded by 350 basis points yoy to 36%. Now that is primarily on the back of structural interventions which we carried out in the last four to five quarters. Our PAT was at 55 crores up 8%. YY. This includes one off impact of new labor code as well as forex.
Excluding these, one of our PAT is 61 crore up 17% YoY. Our cash position remains healthy at 1470 crores as on 31st December 25th. Moving on to the consolidated financial highlights. Our consolidated income was 783crores up 10%. YY. EBITDA was at 174crore with a margin of 22.2%. Our PAT was at 1.4 crore. However this PAT includes forex loss of 6crores and new labour code impact of 11crores. Excluding these one offs, our consolidated PAT stands at 16.5 crores. I’ll request if you can now open the floor for further discussions and questions and answers please. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to to remove yourself from the question queue. You may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Naveen from. I thought pms. Please go ahead.
Navin Koushik M
Good morning. Am I audible?
Manoj Bhat
Yeah, we can hear you Navit. Go ahead.
Navin Koushik M
Yeah, yeah. Congratulations on a great set of numbers. So just a couple of questions of the first one regarding the room inventory. Room inventory addition visibility. So just wanted to know if there’s any projects that are close to completion and how much visibility we have on the room inventory addition side in general.
Navin Koushik M
So if I look at two ways to look at it right. So what I would conventionally. So we don’t call it signing. This is some agreements reached for future Inventory that funnel stands at about 3,600 keys today. So and this will come over the next few years. So that’s one data point in which we track how are we thinking about inventory addition. The second is as I had said that I think one of our goals for F26 was to add at the gross level 1000 keys. I do believe that we are still on track to achieve that gross number for this year.
Of course in this area sometimes it slips by a month or two but I think broadly we are on track from a near term perspective. Also the other thing I had mentioned is that we are looking at relinquishing inventory. So this year I think we have relinquished around 450 keys already and I think we will relinquish another probably 150 or so in the fourth quarter. And that’s. So I think a net number of inventory addition probably will be between 450 and 500 keys during this year. So I think from a longer term perspective I think inventory coming in till F29, F30 is about 3600 keys funnel plus whatever I told.
So we are in a good shape. Of course we have to build more and take it further up but that’s, that’s where we stand today. I don’t know Naveen, if you had any follow ups on that.
Navin Koushik M
Yeah, one small follow up would be like you know, considering the like I just wanted to know if anything has been deferred in the first three quarters like any project. Have you been seeing any delays or anything like that? Because I think they’ve added the 550 to 600 rooms already. So just wanted to know if you plan something and something got delayed or anything like that.
Manoj Bhat
So in projects it is quite usual that some projects get delayed for reasons beyond our control. For example our model has moved to partner LED inventory addition. That is we don’t put our capital. So because of that I think there are some delays which are there happening on terms of partners. So if I take a cumulative view from the beginning of the year to now I think the total delays would be probably between 150 to 200 keys which will move into next financial year. Just to give you a sense of what kind of delays we would have experienced.
So out of the let’s say we’ll deliver gross 1000 maybe about 150 were delayed. So otherwise you would have delivered more during the course of the year.
Navin Koushik M
Got it, got it. Just the next question is going to be on hcr. So last quarter I remember when we Were discussing the HCR business. We mentioned that H2 is seasonally much stronger for the business. Please correct me if I’m wrong on that but I just wanted to get your thoughts on the same. And you know obviously performance has been a little difficult so just wanted to get your thoughts that.
Manoj Bhat
So IFTR is so first of all, I think Q3 performance was lower than we expected largely because of two things. One is I think the weather situation where there was hardly any snow in many of our resorts in Finland in December that really hampered because a lot of people come there for doing snow, snow related activities. So that impacted some of our revenue streams as well as some of the timeshare sales because those are linked. So if you look at the Q3 number at overall PAT was negative 3.8 which is worse than what we had thought.
But Q4 looks like it’s back on track. I think the January month And I think Q4 is usually their strongest quarter. That’s what I meant by H2 is H2 is much stronger for HCRO. That was the meaning of that statement.
Navin Koushik M
Yeah, thanks a lot. I’ll jump back in the queue. Thank you.
operator
Thank you. Our next question comes from the line of Pankaj Kumar from Kotak Securities. Please go ahead.
Pankaj Kumar
Yeah, thanks for taking my question sir. The question pertains to the again on the inventory addition. So as you stated this year we are targeting, we were targeting thousand loss numbers probably we may not be short by around 100 or 150. So with this how we see FY27 when we are entering and we have a green steel results also coming in.
Manoj Bhat
So I think again next year we will be targeting at a gross level about 1,000 plus additions out of which we probably today have visibility of 70 to 80% already. So that’s the kind of number and that’s something which we will keep a constant momentum. The second thing is the funnel. A lot of them are also big, built to suit kind of resort. So it is a bit back ended in terms of delivery. So I think as we go into F28 and 29, I think we should see that acceleration happen also. So I think that’s where we are.
I don’t know Pankaj, if that kind of gives you a sense of what you wanted to know.
Pankaj Kumar
Yeah, that gives you a fair idea. And also the new resorts that we added, some of these are at the similar locations. So how do we see the strategy going ahead in terms of new location versus existing for the properties that we are planning?
Manoj Bhat
So I think okay so if I look at the three we have added, I think Bandhav Ghar is a new location. So if you look at, let me step back, I think we had partnerships in some of these places and our model is we would test out the partnership and if that is a location which makes sense then we would set up our own resort. So in this case for example Ambagat, we had a partnership. Now we run a fully managed resort so we control the entire customer experience. Similarly Bandavgaard falls into that category and Corbett, we actually replaced the portfolio because there was another resort which we had exited a couple of quarters back and we are adding it back now.
So I think it’s not one bucket but in terms of new locations I think we are going to add as I said in the coming year. For example Ganpati Pule is a good example of a new location. I think we are looking at one new location in Andhra. So it is a mix of new locations and existing locations. Because our idea is not to have more than one or two resorts in each location. So we will diversify out into newer locations.
Pankaj Kumar
Since you have rolled out Keystone, so what kind of increasing aur that we can expect with this new product?
Manoj Bhat
So Pankaj early to say because there’s a function of you know, mix season, which mix of you know, season duration, etc. But whatever early data we are seeing we are probably seeing about overall AUR increase of between probably 15 to 20% but it’s only a month’s data so I would not use it as a guidance but just to give you a sense of what’s happening.
Pankaj Kumar
Lastly on this signature resort, how do you see that ramping up? Of course we have co coming in next financial year so how do we see by when we can see a sizable, you can say the business coming from.
Manoj Bhat
So I think the theog ramp up will be as I said probably the latter half of next financial year assuming everything goes according to plan. Plan and then I think we should start seeing more additions come in F28 and then 29. So it is going to be back ended because some of these locations I think for example we are considering another greenfield which will only come in 29 but so it is, it is going to be a ramp up in a slow manner but it will accelerate, accelerate towards the end of the period. That’s, that’s the current visibility.
Pankaj Kumar
Thank you all.
Manoj Bhat
Thank you.
operator
Thank you. Our next question comes from the line of Senthil Kumar from Joindra Capital Services Ltd. Please go ahead.
Senthilkumar Natarajan
Good evening sir. Am I Audible I can hear you Senthil Please go ahead. Yeah, thank you, thank you and congratulations on set of standalone numbers and as usual disappointing consolidated numbers. I am tracking this maturity for the last six years. I could find that offshore business has been purchasing for the last several years. I can understand there are many factors for this pathetic result but I think that even the future seems to be not promising given this economic fall in Europe. I can give you an example of that now I just want to understand this. This happened in Mahindra Gupti earlier Mahindra group has experience of similar acquisition of Sangyang Sangyang Motors in South Korea and I think it is in 2010 later in 2020 they have registered it and utilize the resources fully in the domestic market.
After that another Tata sorry Mahindra was very very optimistic and the growth was really good. The growth has since then been the North Lodge. My question there is now why can’t this board consider similar addition of divesting this offshore business and improve its stakeholders values?
Manoj Bhat
Yeah, I think it’s a great question Senthil. So. So if I look at the overall HCRIO situation one change was an event. The event was the Russia Ukraine war which is, you know I really don’t know where it is headed because depends on what news you choose to believe. So that event was really something which contributed quite a lot to the decline in performance and I think from whatever indications we should know where that is headed probably if we believe the media news pretty soon either it’s going to happen or it’s not going to happen.
The second was more economic situation probably partially led by some of these events where the Finnish economy was highly integrated with the Russian economy in terms of raw materials etc. So that has caused another knock on on the economic side. Now that is more I would say while the official forecast talk about growth in the next year but that’s something which we will see. The last one is probably I would call seasonal which is the weather event which I mentioned which is not very usual and that has obviously at least for this quarter impacted negatively.
So to your broader question I think I had mentioned that we will undertake strategic review but from a timing perspective probably that will happen sometime in the next financial year and not right now because right now I think the business is very very focused on managing through these changing times and you are right, I think the group has taken calls if that is the right call to take and I think our board would also probably look at it from that perspective but as I said I don’t have A comment specifically on what we are thinking.
But at this point these are the three kind of ways to look at why the Finnish business is not doing well.
Senthilkumar Natarajan
Yes, thank you, thanks for that. Takes from.
operator
Yeah, thank you, thank you. Our next question comes from the line of Chris Shewani from Cross Seas Capital Private Limited. Please go ahead.
Unidentified Participant
Hi sir. So my, actually I wanted to have a follow up question on the overseas business itself. So like as you mentioned that this. Quarter was like not as we hoped. For because of the weather. So in the next quarter do we see a breakeven happening in this year? Because we are down a lot in this nine months when it comes to. The profits that we have been occurring. From the finished business.
Manoj Bhat
So I think this, this, this financial year at the EBIT level we will be close to breakeven. At the PAT level probably not. It will be down because there’s some interest related cost. But at the EBIT level we will end up breakeven is our sense as of now.
Unidentified Participant
Okay, got it. And like if you don’t mind elaborating. On the Russia Ukraine situation which is. Harming the business over there, like what exactly has happened in the last three, four years?
Manoj Bhat
So let me elaborate and maybe for some of the others also. So you know that Russia is like the largest land boundary with Finland and large parts of Russia like a few hours drive from Finland. So a lot of the timeshare as well as the hotel was used by Russians and the characteristics were they were high spenders, they used to come often, they put in a lot of money. And so the resorts were designed in a certain way to accommodate that kind of demand. Now what has happened is with the withdrawal of, with the sanctions and all that, all of that has stopped which means that backfilling that kind of demand, I think if I’m not mistaken, probably 20 to 30% of demand was indirectly directly from Russia and that disappeared very soon and they were from a average spend perspective quite high spenders in the resorts.
So I think we have had both, both impacts and that, that really pulled it down. So it started with COVID then this happened then. Now related to that is the economic slowdown. I think that’s the chain of events. Just to give you a background.
Unidentified Participant
Okay, got it. Great, thanks.
Manoj Bhat
Thanks. Thanks.
operator
Thank you. A reminder for participants. Whoever wishes to ask a question may press star and 1. Our next question comes from the line of Shreyans. Kathani from SG securities, please go ahead.
Shreyans Gathani
Hi Manoj, Good evening. I had a couple of questions. So the first one was, you know Basically around the sort, you know, the, the change in the plans that we had, you know, the keystone. So I just wanted to understand deeper like in what way. I know that, you know, the number of plans have reduced from 27 to 12 and you know, it’s a more, you know, easier to understand plan. But besides that, what are the other changes, you know, that we’ve made to this plan which would entice a customer versus what it was earlier? So just trying to get a sense of that.
And also the higher aur that you mentioned, I know you said it’s only one month data, like what is driving, what would drive these two, like what is different in Keystone that would entice a customer versus before.
Manoj Bhat
So I think, Let me step back, right, so when we started the journey of trying to see what should be keystone or a refreshed, completely reimagined membership model, we went back to customers, members, prospects and really did a survey on what they don’t like about the product and then we went about incorporating that. So for example, one of the things we got consistent feedback is that our membership plans didn’t have breakfast included. Right. So we have included that. So that’s one example. The second thing which we heard consistently was while we get there, get to the resort.
But I think a lot of members said if there was a home to home kind of service where we take care of their needs in terms of, you know, whether it’s transportation, whether it is booking of experiences, what to do in the resort. So we put in a concierge service. The other thing we said was that in terms of the other thing which came about is we had a lot of rules and restrictions which we have said that we have done away with almost all of them and that just makes it easier for members to understand the product.
The other thing we introduced is that one of the things which people were saying is that in our older plans that there was a feeling that you commit and you are kind of not having any options. So we have introduced a buyback option to make sure that we don’t allow somebody who’s not very, does not want to continue is not locked in. So many changes. I’m just pointing out a few. And what has come out in the interactions afterwards with prospects and members, we have not heard any negative from a member feedback perspective that it’s not that.
Okay, this is not there. So I think in that sense that’s the journey. And I think if I look at whether it is our own sales team, which is a very good proxy of how members react or prospects react. I think there also we have not had a single case where we have said okay, we could have added this in the product. So in a sense based on all this research we have packed it with the features and made sure that it is easy to understand and simplified and we have made it easier to change some bookings.
There is a lot of stuff we have done, but those are the key points and that is what I think is driving some of these early indicators. But take it with that warning that it’s only one month data.
Shreyans Gathani
Yeah, yeah, yeah. No, that’s very helpful to just understand what the new changes are. So with just following up on that, the existing members, how do they get migrated to the new plan or do they stick to their old or do they have to pay up? Do they have to do an upgrade or how does that work?
Manoj Bhat
So the current path is an upgrade and. And the upgrade could be dependent on season. So if you are in the same season to same season it is a minimal cost of upgrade. But of course if you are upgrading season then it is a higher cost. But we have a path for every member to upgrade that is also in place. We also have it on the website there is an auto upgrade if people want to access that. So I think we are just making it easier for members to understand and then participate. And of course if people want to stay in their older plans they are more than welcome to because from our perspective it’s not that the older plan is worse off, it is a different plan and we will serve them in any case.
So I think we are giving members the choice and option which is where this whole journey started.
Shreyans Gathani
Thanks for that. Next question is on the land bank. So we have, you know, land that we own in certain locations. Are we looking to exclude like do our own capex on those or do like you know, lease model or something like that where we don’t have to incur capex. Just trying to understand how we are looking to use the land that we have.
Manoj Bhat
So we have about. About 600 acres today in various locations out of which we have identified I think three which we are four which we are going to develop already some of them I think shreyant our model has always been we think of potential destinations and it might take a few years for that destination to develop. So we would buy the land a bit in advance and as the destination develops I think we will develop it. So think of this as maybe this land will all be utilized and we are adding by the way so we have added probably three or four land parcels this year also.
So we are creating this land bank more as a potential future investment but most of the growth today is coming from a partner led model where we are not putting capital of our own.
Shreyans Gathani
Got it. Understood. So my question was more on like so the land that we own, the resources that we build on that land, is that going to be our own capex or is that the partner driven capex?
Manoj Bhat
No, if it is so the way we think of it is there are certain locations we want to be present and we will put the capex and own it because from a longer term perspective that’s a better models but in other locations where for example if it is in Goa, I’m just giving an example that we might want to own long term. In some other cases we might want to have a partner put in the capital but in most of our land banks the current model is we put our own capital.
Shreyans Gathani
Got it. So I ask because like most of these bigger larger brands like Indian hotels and Marriott, all of these have pretty much over a period of time just moved to pretty much not owning all of these assets and thereby increasing the return ratios like return on capital for owning an asset pretty much is very low versus trying to, versus having to manage a resort or you know, any other structure basically. So that is something, is that something that we consider in that.
Manoj Bhat
Yes. So. So there are two. First of all yes, I think if I look at incremental growth I do believe only 30% will be owned, 70% will be capital light expense expansion. Secondly, in the Club M brand it doesn’t lend itself to management contracts because of the structure. So the preferred model is a bit of leasing and a mixed hybrid kind of model. So that’s what we are using today. So it is not exactly like to like with some of the examples you mentioned but in effect capital is going to be invested on only maybe 30% roughly as a ballpark figure 70% is going to be capital light even for us.
Shreyans Gathani
Got it. So for signature this wouldn’t apply. We would be able to pretty much do what others are doing. So is there?
Manoj Bhat
Yeah, yeah. So what will happen there? Just again putting that point as we establish the brand, the first two, three resorts maybe but after that it is, it will lend itself immediately to that kind of growth path.
Shreyans Gathani
Got it, got it. That’s helpful and sorry just last question. When do we expect the tiong result to be operational?
Manoj Bhat
I think we had said end of this financial year roughly so. So that’s something which we are Working on and. And obviously it’s our first resort. So we are taking due care. And so it might slip a bit here or there, but that’s what we are targeting.
Shreyans Gathani
Yep, got it. Perfect. Thank you so much. That’s all from my end.
operator
Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants, please limit your questions to two per participant. Our next question comes from the line of Lokesh Srinivas from Ionian Capital. Please go ahead.
Unidentified Participant
Very good evening sir and thanks for taking up my question. My first question is with regard to the new labor law code. There was an exceptional item of approximately like 10.9 crores in standalone, 11.1 crores in consolidated related to new labor code. Is this like a one time provision or it lead to higher recurring employment is going forward.
Manoj Bhat
Thanks. Okay, I’ll ask Vimal to answer that question.
Vimal Agarwal
Definitely. Yeah. Hi Lukesh. Due liabilities which we have provisioned for as one time expense based on the new labor code which got implemented on the 20th of November, our estimate is that majority of one time exception we have already booked and therefore the recurring expense will be much, much lower. And as and when that gets incurred on a quarterly basis, the change in provision it will come in the employee expense line. But expect it to be much lower.
Unidentified Participant
Yeah, thanks for the explanation, sir. And my second question is with regard to the tax expenses. The tax expenses appear to be elevated in the recent quarters.
Vimal Agarwal
What expense?
Unidentified Participant
The effective tax rate. And do you foresee normalization in coming periods?
Vimal Agarwal
Are you referring to standalone or consolidated?
Unidentified Participant
Both. For both, sir. The tax return seems to be like, you know, higher end when compared to previous quarter and the year on year two.
Vimal Agarwal
On a total tax line basis including deferred tax as well as current tax. Our tax impact is exactly 25.5% and that we expect there may be some interchange between these two line items. But no effective tax rate which will come out same for SCRO or say consolidated accounts. We do not create deferred tax assets for for smaller entities. But that has been the position in the past and that is expected to continue for near future as well. So no change there also.
Unidentified Participant
Definitely. So. Thank you. Thank you very much.
operator
Thank you. Our next question comes from the line of Dhuvanit Savla from Savla Family office. Please go ahead.
Dhvaneet Savla
Hi sir. I had two questions. My first is with regards to our goal of reaching 12,000 keys by 2030. Okay. So I can see that in this, this quarter also we have ended up, you know, closing down some resorts. So I going forward, if we are going to continue with constant evaluation of which properties are not doing well or better. So do you think that this 12,000 thing will be a gross level thing or will it be net of all these close down that we will reach the 12,000 key mark.
Manoj Bhat
So let me split that Dwanit into two parts. Right. So first is the Club M brand. We said 10,000 and in whatever I am talking about is Club M. So as I said in the beginning also I think by the first half of next year most of our exits would be done. So after that you should see the gross translating to net in a sense. Right. So that’s what we are trying to do because it is not a continuous evaluation and that’s something we will try and do. The second is that on MSR I think we have set a goal of 2000 keys and obviously the first one is steady to start.
But that is. And to me, as the management contracts open up and so on and so forth, that’s where we hope to see that acceleration come later. So I think I’ll split that into two parts and that’s how you should also look at it.
Dhvaneet Savla
Okay, thank you. And secondly, is there any on just a follow up on that. Is there any split which we are trying to say like how many of these which we are planning to be within India and international? Because I think so predominantly we would want to be placed in India, right?
Manoj Bhat
Yeah, most of the. Most of the keys you should assume is in India. Y.
Dhvaneet Savla
Okay. And do. My second question is with regards to the memberships. So I think so the. Right now a lot of these uh, older 25 year old membership memberships will have been closing down. Right. So uh, how many. Is there a metric on the renewals which we are doing? Like someone has taken a 25 year old membership and is renewing it again for another, another cycle or something.
Manoj Bhat
So obviously we track that metric but I don’t think we have put it out in the public domain. What we are doing is we are with the new product we are targeting people who are retirals or end of end of members much more actively. And I think maybe another quarter or so we should have a better sense of what it is because one of the things which was happening was that people were saying that it’s the same kind and some of these features were not there. For example, I spoke about some of the added features.
So I think we are seeing better traction today with the new product in terms of retention, in terms of upgrade. But that’s something. I’ll just wait for a quarter before I get into what what sort of trends we are seeing.
Dhvaneet Savla
Thank you very much sir and all the best. Hopefully we put on a much better performance in the next coming quarters.
Manoj Bhat
Thank you Danit.
operator
Thank you. Our next question comes from the line of Prashant Shirsagar from Uniwape Corporate Research Private Limited. Please go ahead.
Unidentified Participant
Thanks for the opportunity sir. I just want to ask you on slide 12 in the standalone business you have talked of resort transformation to two resort transformations. So can you share the names of that and how many keys are involved in that?
Manoj Bhat
This is Kumbalgad and Poor. These are the two resorts.
Unidentified Participant
How many?
Manoj Bhat
Kumbalga should be close to 80 or 90 keys I think and poor should be about 70 if I’m not mistaken. I. We can send it to you offline but it should be in that vicinity.
Unidentified Participant
And you have said that three are planned. So which ones are those?
Manoj Bhat
That is Munnar, Jaisalmer and Gear.
Unidentified Participant
And how. What time frame is required for such transformations?
Manoj Bhat
So depends on the result. So for example poor, we should be done in about seven or eight months. Kumbalgarh also probably about nine to 10 months. Munnar might take slightly longer, maybe 11, 10, 11 months. So it’s depending on the size etc. Etc. Right.
Unidentified Participant
And when do you plan to do the transformation in this formunar or other ones?
Manoj Bhat
So Munnar, we are hoping somewhere in Q1 if I look at Jaisalmer also probably will start in Q1. Gear is also around that same time frame, give or take.
Unidentified Participant
Okay. And Ganpatipule, when should you be thinking?
Manoj Bhat
I think that will be probably available for members in Q3.
Unidentified Participant
Q3, okay. Of FY27.
Manoj Bhat
FY27, that’s right.
Unidentified Participant
And how many keys it will have?
Manoj Bhat
That’s about 160 keys give or take.
Unidentified Participant
160. And a question on the membership I wanted to ask this Keystone which you have launched. If a member wants to upgrade say from a Red Season to a Keystone membership, then the ASF will be the same as the old plan or is it will be higher or if it. Is the same room category, the ASF will be the same. Yeah, yeah. And so the cost will be only for the upgrade as you have for normal upgrade it in the.
Manoj Bhat
Absolutely, absolutely. Okay. Now my question is on hcro. Prashant, this is the last question because there is others in the queue but we’ll. We’ll answer this. But then if you can come back in the queue if you have further Questions?
Unidentified Participant
Yeah, sure, I’ll do that. In the slide 31 you talk about spa hotels having an optic slide optic in Q3.
Manoj Bhat
Yeah. So the spa hotels would be just to understand the business. The spa hotels will be. It’s like an FMB in your resort. So, so let me explain the terms. Timeshare is where we sell weeks, right. Spa hotel is our hotel business. Which. Is like conventional hotel.
Unidentified Participant
Okay. Okay.
Manoj Bhat
Renting is where we have inventory and we then sell that inventory on a night basis. Right. So we have some rooms left over which we have not sold or weeks left over. And real estate management is what we recover from the various property companies because each of these timeshare is hosted in a company and the services are provided by by hcro.
Unidentified Participant
Okay. And the village would be. It’s a small business but it will be just to understand village is just.
Manoj Bhat
Another terminology for some type of timeshare. So. Yeah.
Unidentified Participant
Okay. And the last thing is the weather helping you in the Q4 means it started snowing.
Manoj Bhat
January has been good but you know, weather is the weather but January has been good.
Unidentified Participant
Okay sir, and can you share the debt figure for hcro if it’s possible.
Manoj Bhat
Prashad is a last question but why don’t you. This is the last Scro’s external debt is. Was about 25 million euros as on. 31 March and it’s a bit seasonal. Where will, where do we expect to end? If 5 million we expect to end maybe at 26, 27. 27 million by March is what we are expecting.
Unidentified Participant
And okay, so December was 25, last.
Manoj Bhat
March was 25, was 25 million.
Unidentified Participant
And for the 31st of December sir.
Manoj Bhat
The 31st of December, it’s seasonal but.
Unidentified Participant
Must be around 29 or so.
Manoj Bhat
29, okay, fine, thanks a lot. That was my.
operator
Thank you. Our next question comes from the line of Ramakrishnaneti from Zen Wealth Management Services Ltd. Please go ahead.
Unidentified Participant
Hi, thank you. Just one question from my side. This is related to the AUR I remember, I think in the previous call or the other one you are mentioning that 9 to 10 kind of AUS actually are not sustainable and they will gradually moderate over a period of time. So now that we view a new plan in place and you are also rationalizing in terms of the membership and all. So just wanted to know your thoughts in terms of where do you think over the next two, three years by the time you reach 10,000 rooms in Club M, what is the ideal or the normalized AER levels that you are actually anticipating or expecting? Thank you.
Manoj Bhat
So if you split the AUR into two parts, right. So one is new sales and then upgrades to existing members. That’s the way we look at it. Right. So if you look at and that split is roughly, I would say about 4.7 is the new sales AUR which is also up significantly from the past. And then the balance is about five is coming from all the upgrades to the existing members because they don’t count as new members. So I do expect that with The Keystone the 4.6 will go up the upgrade number. I think we are reaching a kind of a full potential is what I think.
But I have been surprised positively every time so I’ll just leave it at that. The second thing on AUR as you think about a longer term period is we typically take a price hike every April. That’s something you might want to factor as we go along. But it’s also a function of mix in terms of which plan gets sold. So it’s not a straight equation but that’s some things to just give you a sense of. Of aur.
Unidentified Participant
Just one follow up actually. How much is it dependent directly on the members that get added during the period? I mean is there any direct correlation because is a numerator, right? I mean.
Manoj Bhat
So the denominator is the members.
Unidentified Participant
Yeah, denominator. I’m sorry. Yeah.
Manoj Bhat
So I didn’t get the question maybe how much everything depends on the members because they buy the plan. So. So I didn’t get the question.
Unidentified Participant
No, no. I’m trying to understand in terms of members. So what will be the run rate that every quarter we are anticipating, you know, over a period of time, I mean it will be around 1500 like as we have been witnessing in the last few quarters or what is the thought process out there.
Manoj Bhat
So I think my own sense is we don’t know how Keystone will behave right now. It is trending already trending equal to whatever the older products were in the first month itself. I think we’ll have to wait for a quarter on that. But that and I mentioned this before, I think the focus here is not going to be member edition only. It is going to be good focus on aur, good focus on making sure that member experience is better, making more rooms available for members and overall making sure that we journey from a sales model which is probably more digital with more pull.
I think that’s the journey and I’ve spoken about this in the past. Thank you.
operator
Thank you. Our next question comes from the line of Naveen from I thought pms. Please go Ahead.
Navin Koushik M
Hey, can you hear me? Am I audible?
Manoj Bhat
Yeah, we can hear you Naveen. Go ahead.
Navin Koushik M
Yeah, so one small follow up is regarding the like I remember a couple of quarters we’ve been discussing how we don’t want to encourage like the EMI teams and looking for better customers who pay upfront and all right. So it’s like a two part question regarding the same thing. So one is do you anticipate that with Keystone coming in and like you know, new sales getting split between the old plans and the Keystone, the EMI path will reduce further and the next part would be like do you have any hard cut off or any target by which you want to face this income stream out completely?
Manoj Bhat
So Naveen, let me clarify. Maybe it was. I was not clear. We never said we don’t want to do emi. What was happening is there was a set of customers who’s to discontinue EMIs after some time and that correlation was to a certain geography, certain kind of branches, etc. Etc. So that is what we have discontinued because the EMI model actually is a reasonable model. We have good recoveries overall and that’s something we would like to continue. Having said that, I think a lot of people do pay upfront. I think about 50% is what is the number? Sorry, I’m mistaken.
10% pay up front and then the balance is all EMIs. So because that is like with any consumer product it is something which we don’t see much of a risk in terms of EMI recoveries.
Navin Koushik M
Got it, got it. So no hard targets or anything like that on reducing the salience of emi.
Manoj Bhat
No.
Navin Koushik M
Awesome. Awesome. Yeah, thanks a lot. That’s it.
operator
Thank you. Our next question comes from the line of Preeti Agrawal from SK Associates. Please go ahead.
Unidentified Participant
Yeah, thank you so much for the opportunity. I wanted to know that, you know, Keystone has been introduced as a similar, simpler and more flexible premium membership product. So initially targeted, you know, at the new customers. So could you share early observations on Keystone in terms of, you know, ticket size or booking behavior and cost of acquisition and whether unit economics are shaping up differently at this stage.
Manoj Bhat
So Preeti, so two, three things I want to say, right? So one is I did indicate that 15% increase in AUR we are seeing in Keystone. So that’s one data point for you. The second is that I think we are seeing that. The middle one, which is we call it Ivory, which is the peak, is probably currently the highest selling season. And I think those are the two early observations because it’s just a month’s Data. But at least this is what I can probably say today. And I think if you look at it, we are delivering more value on the same cost.
So it is obviously incrementally beneficial for cost of acquisition.
Unidentified Participant
Understood. And also our sales and marketing expenses have declined meaningfully year on year. So is this largely driven by higher referral and digital distribution? Are there structural efficiency gains in customer acquisitions that can be sustained, you know, as you scale Keystone and Premium products?
Manoj Bhat
So. And Preeti, what we had done, and this is I’m now talking about probably three, four quarters back, and that is what you’re seeing now is we looked at what areas have the highest cost, cost of acquisition and we actually cut our market access in those areas completely, which meant that we actually reduced our market presence by a substantial portion. I think it’s about 40, 50% of the market we didn’t want to access because the behavior of the members acquired there was early, what we call early delinquency and so on and so forth. So what that meant is whatever is left, we are seeing some of the benefits of lower COA because the highest COA was coming because of people actually selling to someone who discontinues, which then the whole thing becomes a little bit of a problem.
So that’s one thing which is there. The second thing is, of course we have carefully looked at various promotion schemes which we are using and that’s something we have rationalized over a period of time. We are seeing some of that benefits now as we look forward. What I am hoping is with Keystone and other initiatives, productivity will go up. Because I think productivity has not gone up yet. And in terms of per salesperson or per relationship manager, and that’s something which will lead to improvements into the future.
Unidentified Participant
Understood. And so the company has set a target of 2000 keys for this new business venture. So is there a possibility that the management may prioritize this vertical more heavily than the 10,000 he’s targeted in the vacation ownership segment?
Manoj Bhat
Suprity. Even in my strategy presentation I had said that we have to scale the core because it’s a great business, which we have. And so that. And then the second priority was build the new so and we have separate teams doing that. So it’s not that the same team is focused on doing both of these. So we have actually built a separate team team for Mahindra Signature Resorts. So in no way is anything going to kind of get less support, whether it is from a capital perspective or from any other perspective.
Unidentified Participant
That’s it from my side.
Manoj Bhat
Thanks so much thank you, Preeti.
operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to Manoj sir for closing comments.
Manoj Bhat
Thank you all for joining. If there are any unanswered questions, please do reach out to us offline and we will try and answer to the best of our abilities. And have a good weekend.
operator
Thank you. On behalf of Mahindra Holidays and Resorts India Limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.