Royal Orchid Hotels Limited (ROHLTD) Q3 FY23 Earnings Concall Transcript

Royal Orchid Hotels Limited (NSE:ROHLTD) Q3 FY23 Earnings Concall dated Feb. 14, 2023.

Corporate Participants:

Amit Agarwal — Investor Relations

Chander K. Baljee — Chairman and Managing Director

Amit Jaiswal — Chief Financial Officer

Analysts:

Rahul Bhangadia — Lucky Investment Manager — Analyst

Krisha Kansara — Molecule Ventures LLP — Analyst

Sushil Churiwala — Vinar Integration — Analyst

Sameer Thakkar — Individual Investor — Analyst

Sanjay Gupta — Individual Investor — Analyst

Rajesh Agarwal — Proprietary Advisors — Analyst

Rishabh Shah — Nuvama Wealth — Analyst

Ronak Rathi — Individual Investor — Analyst

Amit Aggarwal — Nuvama Wealth — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Royal Orchid Hotels Limited Q3 FY ’23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Agarwal from Nuvama Wealth Research. Thank you and over to you sir.

Amit Agarwal — Investor Relations

Thank you, moderator. On behalf of the Nuvama Professional Client Group, I welcome you all to the third quarter FY ’23 earnings conference call of Royal Orchid Hotels Limited. The management on the call is represented by Mr. Chander Baljee, Chairman and Managing Director and Mr. Amit Jaiswal, Chief Financial Officer. I now hand the call to the management for opening remarks, to be [Technical Issues] question-and-answer session. Over to you sir.

Chander K. Baljee — Chairman and Managing Director

Yeah. I am Chander Baljee, Managing Director of Royal Orchid Hotels. Good evening, and warm welcome to everyone. Thank you for joining us for the Royal Orchid Hotels limited earnings conference call for the third quarter of the financial year ’22, ’23. Please note that Q3 of financial year ’23 quarter results, press release and investor presentation are available on the exchanges. I hope you’ve had the opportunity to browse through the highlights of the performance.

The industrial has bounced back very strongly after the COVID. From April 2022 onwards, we have done robust business which were evident from the financial results of the first and second quarters. We have continued success story in the third quarter also. In fact, we have built on the structures and its phenomenal business in the third quarter, the same is evidenced in our third quarter results.

The company has posted a robust growth because of its strong business model and effective risk mitigation strategy. We that aiming to post better margins than what our company had witnessed in the recency past. The third quarter results has been one of the best in the last 10 years.

Financial highlights for the company for the third quarter ended 31st December ’22 on a consolidated basis are as follows. Consolidated revenue from operations in Q3 the was INR72.49 crores, as compared to INR52.78 crores in Q3 ’22, a growth of 37%. This was attributed to an increase in the ARR and [Indecipherable] and also increase in F&B business. The solid EBITDA for Q3 was INR27.75 crores as compared to INR19.07 crores in Q3 ’22, an increase of 46%. Consolidated PAT before exceptional items for Q3 ’23 stood at INR15.18 crores, as compared to INR5.73 crores in Q3 of ’22, an increase of 165%.

Financial highlights for the company for the nine months ended December 31st, on a consolidated basis are as follows: Consolidated revenue from operations was INR191 crores, as compared to INR99 crores in ’22, a growth of 93%. This is attributed to increase in ARR and occupancy and also increases in F&B business.

Consolidated EBITDA was INR72 crores as compared to INR36 crores, an increase of 176%. Consolidated PAT before exceptional items stood at INR36 crores as compared to a loss of INR4.89 crores in FY ’22, an increase of 838%.

During the quarter, we’ve been able to increase the average room for the Q3 ’23, it stood at 5,914 as compared to 4,331 for Q3 ’22, a growth of 37%.

We are in-line with our vision to operate 100 hotels by 2023, and looking forward to opening new hotels in different cities of India.

During the quarter we witnessed the RevPAR growth led by higher ARRs. We believe the industry has seen its revival, and we have bounced back with better results in the current financial year. The management has set out a strategy to diversify its product offering, provide unique customer experience and work towards a robust balance sheet.

I would like to conclude my opening remarks by saying that we are witnessing major signs of growth for the industry as a whole which will show up in our overall earnings quality over the next several quarters. Thank you, and now we can throw the floor open to questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rahul from Lucky Investments. Please go ahead.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Thank you for taking my question, sir. First of all, congratulations on a great set of numbers. The best numbers in a long time, as you just said. Sir, my first question, last quarter you had mentioned about a INR200 crore NCD for your expansion purposes. Could you give us an update on that, sir.

Chander K. Baljee — Chairman and Managing Director

We had got an approval from the court, and at an appropriate time we will raise the funds. So, we have right now, we are in the process of negotiating with various parties the leases and the revenue-share arrangements, so the moment we — we have enough funds right now to grow immediately. As and when the need arises, we will go ahead with the fund raise.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Okay, second question. Where do you see the industry kind of on the performance level moving ahead? Do you see the similar levels of RevPAR, EBITDA margins or occupancy, whichever way you want to put it, continue going ahead, let’s say, for the next few quarters.

Chander K. Baljee — Chairman and Managing Director

Yes, I definitely see a strong growth and the trend continuing, because the country as a whole is doing very well, and our performance depends on country’s performance, and I think all the worst is over for the economy. You can see all the sector booming, and particularly travel. People are traveling like there is no tomorrow, so there is a big growth in domestic tourist and the destination also. People are traveling, and I think, April, May and June are going to be very good busy summer months for us. So, I feel that the growth in the next few quarters is going to be as healthy, if not better than the past.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Okay. Sir, final question and I’ll go back to the queue. Sir, it is obvious that you are very positive on the prospect of the industry and as well as the company itself, and that is why that INR200 crore NCD plan as well. And as you mentioned, you look at it for the next few quarters also positively, but from an investor point of view, just a question. We are seeing the promoter holding coming down in the company, so what should the investors understand from this and what should we expect in the future?

Chander K. Baljee — Chairman and Managing Director

See, as it is, our investment — promoter’s investments was very high, which is not normally there in most of the companies. And I think, there was a feeling amongst the [Indecipherable] communities that we don’t have enough float in the market. So, we should have in float in the market, and suppose any big investor comes in, again, there is no way to enter from what I can see. So that is the reason. Otherwise, we have no intention of executing — exiting the Company or so.

Rahul Bhangadia — Lucky Investment Manager — Analyst

No, no, sir, that was not the question. The question was that, if the promoter keeps kind of — if the promoter holding keeps going down, there is a supply coming from the promoter side as well. If a big investor wants to come through or wants to buy from the market, he is always there, but at these low valuations, the promoter kind of dilutes, then it becomes an overhang kind of issue, sir, nothing else, and this is coming from a shareholder, I’m a shareholder in the company. So just as the feedback I am kind of giving this to you. Thank you very much for your time.

Chander K. Baljee — Chairman and Managing Director

I know, Lucky has only been lucky for us also, so I think — there is also some personal requirements also, we need to dilute some to some extent, but it won’t be very much.

Rahul Bhangadia — Lucky Investment Manager — Analyst

So, are you suggesting that there will be a little bit more of a kind of promoters selling out here?

Chander K. Baljee — Chairman and Managing Director

That it could be, I can’t write down to give you a sense.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Fair enough, fair enough.

Chander K. Baljee — Chairman and Managing Director

We are open to that. We are [Indecipherable] at least, may be 1% or 2%, may come down.

Amit Jaiswal — Chief Financial Officer

See, as well, promoters are holding 65 plus percentage of the holding, okay. And if you really look at it from 2007 onwards, there had not been any dilution of the assets of the promoters holding, okay, so there is a very minor dilution which has happened in the quarter, and promoter wants to hold a stake of roughly around 64%, 65%. There is no reason or there is no requirement as such to make any dilution as such. But yeah, 1% or 2% here and there, you know, I don’t think it makes much difference as far as the market is concerned.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Sir, I’ll not debate this much, but all things matter in terms of perception and overhang, when the promoter kind of dilutes at these low valuations. That’s all I have to say to that. Thank you very much for hearing me out. Thank you.

Operator

Thank you. [Operator Instructions] Next question is from the line of Sushil from Vinar Integration. Please go ahead. Sushil, may I request you to unmute your line from your side and go with your question please? Due to no response, we move on to the next participant. The next question is from the line of Krisha Kansara from molecule Ventures. Please go ahead.

Krisha Kansara — Molecule Ventures LLP — Analyst

Sir, my question is, in which city that we see the highest traction, and traction in terms of, let’s say, ARRs and occupancy in Q3. And also, if you could answer this question for Q4 and going forward also.

Chander K. Baljee — Chairman and Managing Director

Yes, we are finding that Bangalore is doing very well and it will continue to do well. There are lot of things happening in this city. The arrow shows an example of lots of new investment coming into the city, that will continue. Goa, we feel, is also continuing to do well, because at least, whatever said and it’s a very fun destination and we are operating four hotels there. So, I think, that will continue to do well. And, of course, places like Gurugram will do well, and coming season, we expect the summer season, we expect the hill stations should do exceedingly well.

Amit Jaiswal — Chief Financial Officer

I would like to add here that Pune market is also doing phenomenally well. In first quarter, they had done 100% occupancy and YTD, they have been able to maintain the occupancy levels at almost 90%. And similarly, Amritsar also has done in very well in the third quarter. They have done almost 100% occupancy.

Krisha Kansara — Molecule Ventures LLP — Analyst

Sir, you mentioned Goa, Gurugram, Pune and Amritsar, which was the first city that you mentioned?

Amit Jaiswal — Chief Financial Officer

And Bangalore.

Krisha Kansara — Molecule Ventures LLP — Analyst

Okay, that was the first city you mentioned right?

Amit Jaiswal — Chief Financial Officer

Yes, yes.

Krisha Kansara — Molecule Ventures LLP — Analyst

Okay, and what about Mumbai, sir?

Chander K. Baljee — Chairman and Managing Director

Mumbai, we have a [Indecipherable] in Navi Mumbai, that’s doing very well. Bombay, otherwise, will continue to do well, but we don’t have a significant presence there right now.

Krisha Kansara — Molecule Ventures LLP — Analyst

Okay, okay, sir, Thank you.

Operator

Thank you. [Operator Instructions] Next question is from the line of Sushil Churiwala from Vinar Integration. Please go ahead.

Sushil Churiwala — Vinar Integration — Analyst

Good afternoon, and thanks very much for [Indecipherable]

Operator

Sorry to interrupt you, but your audio is not very clear. Can I request you to speak through the handset.

Sushil Churiwala — Vinar Integration — Analyst

Good afternoon, and thanks for a very healthy set of numbers. I just had a suggestion about split-up of stocks now, because most of our peers are either face value one or two. And if we also have a similar face value, then it becomes easier for the investors to compare the value of our company. And also, additionally, it will also be little bit of [Indecipherable]. So, if management considers that, I think it will be good for the company.

Chander K. Baljee — Chairman and Managing Director

Good suggestion. We will look at it at the appropriate time. Right now, the price is not very high. So, we will look at it at appropriate time. It is a good situation. We will be consulting our merchant bankers and all that and bankers, and definitely see this split at an appropriate time.

Sushil Churiwala — Vinar Integration — Analyst

Thank you so much.

Operator

Thank you. [Operator Instructions]. Next question is from the line of Sameer Thakkar, an individual investor. Please go ahead.

Sameer Thakkar — Individual Investor — Analyst

Good afternoon Mr. Baljee and Mr. Jaiswal and team.

Amit Jaiswal — Chief Financial Officer

Can you speak a little louder? I can’t hear you.

Sameer Thakkar — Individual Investor — Analyst

Hello, can you hear me now?

Amit Jaiswal — Chief Financial Officer

Yeah, now it’s clear.

Sameer Thakkar — Individual Investor — Analyst

Yeah, so my first question would be, there is a significant jump in the management operated rooms this year. So, if you could throw some light on how this is looking in terms of share of revenue and share of profit?

Chander K. Baljee — Chairman and Managing Director

There is going to be still more improvement because we added 20 hotels in the last 10 months to our portfolio, and I think in the next seven, eight months, we going to be adding another 20, so there is going to be significant rise in the management fee model, and we continue to do that.

Sameer Thakkar — Individual Investor — Analyst

Okay, and what do you think the trend would continue in Q4 as compared to Q2 and Q3 considering that we know that this is not a major holiday period?

Chander K. Baljee — Chairman and Managing Director

No. I think the overall economy will do well. See, actually last Q3 October did not do well. But November and December did very well, and the overall picture was very good. Even now I think in between, there may be some blips, but whatever it is that, I think there is no uncertainty as far as the economy is concerned. So, I think all business should do very well.

Sameer Thakkar — Individual Investor — Analyst

Got it, got it. Okay, sir. And can you throw some light on your room or key expansion plan for FY ’23, and where we would end this year, and your plans for FY ’24 and ’25? And how much of this, can we expect to come from leased properties and manage operations route.

Chander K. Baljee — Chairman and Managing Director

We are aiming, today we have about 4,600 rooms or so, and we are planning to add by September another 1,000 rooms or so with [Indecipherable] hotels. And, so in this entire year or so, at least 1,500 rooms we should be able to add, so crossing about 6,100 rooms. And by September, the aim is to grow up to about 100 hotels, and maybe about 120 or so hotels within the next one year.

Sameer Thakkar — Individual Investor — Analyst

Right. And how much of this will be from leased and how much are we [Speech Overlap]

Chander K. Baljee — Chairman and Managing Director

We are targeting at least you know 15% to 20% of the keys coming through the leased model.

Sameer Thakkar — Individual Investor — Analyst

Okay, okay, that’s it from my side. Thank you very much, and congratulations on the good set of numbers.

Chander K. Baljee — Chairman and Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] Next question is from the line of Sanjay Gupta, an Individual Investor. Please go ahead.

Sanjay Gupta — Individual Investor — Analyst

Hello. Sir, I would like to know what will be the revenue like by the end of this year?

Amit Jaiswal — Chief Financial Officer

Our target is INR300 crores, we are in line.

Sanjay Gupta — Individual Investor — Analyst

In the first nine months, our consolidated revenues were around INR191 crores, so.

Amit Jaiswal — Chief Financial Officer

See, INR191 crores is there, in this what happens is, there is one hotel in Jaipur, which is being consolidated as an associate. So that total revenue around INR16 crores is not reflecting in the consolidated financials if you look at it, we only take the profit out of this. So, if we include that, then our total top line will be around INR150 crores — INR215 crores already. So, around INR290 crores, the target is INR300 crores, but I think we should be able to do to INR290 crores.

Sanjay Gupta — Individual Investor — Analyst

It will be on expected lines.

Amit Jaiswal — Chief Financial Officer

Come again.

Sanjay Gupta — Individual Investor — Analyst

So, it will be on expected lines.

Amit Jaiswal — Chief Financial Officer

Yes, yes, almost.

Sanjay Gupta — Individual Investor — Analyst

Okay, okay, sir, my second question is, in the past I have seen that whenever your share prices start moving up, there is a sale from the management side also, the promoter side, why is it so?

Chander K. Baljee — Chairman and Managing Director

Not exactly always it has happened. It has only happened twice and that also very small numbers, if you see the management rolling is very, very high, so on some personal requirement and also request from some investors that we had to get out, and it’s very, very small number, 2% is not a very big number. Still the management holds 65 plus percentage of the shares.

Sanjay Gupta — Individual Investor — Analyst

Okay, okay, thank you very much.

Chander K. Baljee — Chairman and Managing Director

Thank you.

Operator

Sanjay, do you have any follow-up questions?

Sanjay Gupta — Individual Investor — Analyst

No sir, no, thank you very much. Thank you.

Operator

Thank you. Next follow-up question is from the line of Rahul Bhangadia from Lucky Investment Please go ahead.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Sir, could you help us with the net debt number as of December, and what was, let’s say in September and March?

Amit Jaiswal — Chief Financial Officer

The net debt was INR81 crore as on December. I’m including our Jaipur hotel, although we are not consolidating it. Their outstanding is around INR25 crores. In the standalone, it is INR36 crores and INR20 crores in one of the subsidiaries that is Icon, so total is INR81 crores. You know in 31st March, it was around INR90 crores, and in September it was around INR87 crores — INR86 crores, INR85.48 crores.

Rahul Bhangadia — Lucky Investment Manager — Analyst

Okay. Okay. Sir, the Kshirsagar Hotel, that is the one that manages Jaipur?

Amit Jaiswal — Chief Financial Officer

Yes.

Rahul Bhangadia — Lucky Investment Manager — Analyst

And we have how much holding there, sir?

Amit Jaiswal — Chief Financial Officer

We hold 50% stake there.

Rahul Bhangadia — Lucky Investment Manager — Analyst

50% stake, okay, thank you, thank you so much.

Operator

Thank you. [Operator Instructions] Next question is from the line of Rajesh Agarwal from Proprietary Advisors. Please go ahead.

Rajesh Agarwal — Proprietary Advisors — Analyst

Congratulations on good set of numbers. My question is, on the consolidated other services for the nine months is INR22.51 crores, what it represents?

Amit Jaiswal — Chief Financial Officer

Other services 22, no sir.

Rajesh Agarwal — Proprietary Advisors — Analyst

INR0.51 crores. Nine-month period. Room night INR103 crores, food and beverage is INR65 crores and other services INR22.51 crores.

Amit Jaiswal — Chief Financial Officer

So that includes — see, I’ll tell you, we have certain, whatever we earn in our 100% subsidiaries are all Orchid associated hotel, which is our major management business. So, 30% of that revenue we pay to the standalone entity, because all the branding and all everything and the services given by the main entity. So that is booked, that is around INR16.5 crores. And apart from that, there is around INR6 crores of other income, which is the interest on FDs and other certain facilities.

Rajesh Agarwal — Proprietary Advisors — Analyst

Mr. Jaiswal, where are we booking our management fees then?

Amit Jaiswal — Chief Financial Officer

See, we book all the complete management fees is booked in the subsidiary, Royal Orchid Associated Hotel, okay, and from there, the 30% of the revenue we transfer it to the standalone entity.

Rajesh Agarwal — Proprietary Advisors — Analyst

Okay, and at 70% where it is booked? I mean, in the consolidated number, where can I find it?

Amit Jaiswal — Chief Financial Officer

In the consolidated number, it is there.

Rajesh Agarwal — Proprietary Advisors — Analyst

Okay, okay. Could you delve upon the development plans for Goa hotel? We have 73 rooms, what plans we have to you know, expanded it. I understand some land also, whether we have taken any additional land there, because that’s a good place where occupancy is very high.

Chander K. Baljee — Chairman and Managing Director

Yeah, we are, see due to the shifting of the CR Z line, we have got an additional area where we can build home, and I think about 48 rooms can come up in that particular area. And then, we have taken some land adjoining that on the other side where we can come up with a bigger banquet hall as well as about 20 rooms and a spa. So that is being planned. In fact, I was in Goa on Saturday with architects to discuss that, and we should be finalizing with plan in the next month or so, then giving it for sanction. And once that is done, we will start the construction.

Rajesh Agarwal — Proprietary Advisors — Analyst

Can we expect that by FY ’24, this project will be complete, let us say a year or let us say, 14 months.

Chander K. Baljee — Chairman and Managing Director

100%. In fact, we are trying to target is to at least partly complete the project by September or October.

Operator

Sir, the line for the participant dropped. We move to the next participant.

Amit Jaiswal — Chief Financial Officer

Yeah.

Operator

Next question is from line of Rishabh Shah from Nuvama Wealth. Please go-ahead.

Rishabh Shah — Nuvama Wealth — Analyst

Hi sir, good evening. So, first thing just a couple of bookkeeping questions. So, can you, I mean, kind of for the quarter and for the nine months, can you give a breakup or the revenue from management contracts, as well as revenue-share contracts and leases.

Amit Jaiswal — Chief Financial Officer

Yeah, so from the — you know in our management business, we have done for the quarter around the revenue of total revenue of around INR9.7 crores. This has come primarily from the management business. Okay, and out of the total revenue of INR76 crore, see INR76 crores we have done the total revenue for the quarter what has been subleased. So out of that, around INR9.7 crores is from the management business, and from the leased business, we have done around INR9 crores from the leased business.

Rishabh Shah — Nuvama Wealth — Analyst

Okay, and balance would be from the owned properties.

Amit Jaiswal — Chief Financial Officer

Owned properties and revenue shares.

Rishabh Shah — Nuvama Wealth — Analyst

Okay, and the same for the nine months?

Amit Jaiswal — Chief Financial Officer

Pro rata, yes. See, for the nine months, if you really look at it, then you know around INR26 crore has come out of the management business and lease business is around INR47 crores, okay, and balance from our owned and revenue share hotels.

Rishabh Shah — Nuvama Wealth — Analyst

Okay, got it, sir, got it. And secondly, basically about the pipeline that we have mentioned, so we have mentioned that we will be adding 1134 rooms and be over 2023, so most of this would be getting added by September itself. So I just want to kind of understand how is the ramp-up of the new hotels? I mean, what kind of time does it take for these new hotels to reach the average occupancy, say 70% to 75%?

Chander K. Baljee — Chairman and Managing Director

Normally, any hotel — is we are entering the markets, I think by the second year we get towards 70%, 75%. And of course, in our Asia destination, you maybe 60%, 65%. In our city destination, obviously, this location will be 70%, 75% in year two.

Rishabh Shah — Nuvama Wealth — Analyst

So around — just one or somewhere above year two, three is optimum levels?

Chander K. Baljee — Chairman and Managing Director

That’s right.

Rishabh Shah — Nuvama Wealth — Analyst

And thirdly, can you kind of throw some light on the advanced bookings that you have received for the Q4, maybe Jan to March or a period beyond that?

Chander K. Baljee — Chairman and Managing Director

Large books cycle has reduced a and the statistics of Make My Trip and all those people, they’re normally a largest booking comes one to three days in advance. Then there will be some booking come into more five, six days. And there will be very few bookings coming a month or two months in advance, except some conferences or some weddings. For weddings, they have to book in advance. And also some foreign groups, which is, of course, now come only in the next season because this season is getting over. They’ll probably come next year.

Rishabh Shah — Nuvama Wealth — Analyst

Okay. So, is it kind of an indicator of, maybe say, increasing competition or maybe last minute last travel bookings. I mean, what can what to read into that?

Chander K. Baljee — Chairman and Managing Director

By and large the market has changed. You see, people who earlier used to plan annual holidays apply for leave. And yes, the children’s holidays and all that. Now what’s happened is there is lot of long weekends. Example, there’s a long weekend. There are so many long weekend. So people take maybe one day casual leave on a Monday, Tuesday is a holiday, Friday, Saturday, Sunday and Monday. So lots of that is happening. And people are going out to maybe three or four small holidays and one long holiday. That has just becomes the trend.

And now to book also its become easier. If you really look at — you just get into an OT website and within a few minutes you’re booking is there. You go home, pack your bag and you leave. Lot of driving holidays have come up in the past. And I think the trend has changed and people are really looking in Facebook and Instagram, people putting their posts on that. So lot of people want to see that and then keeping up with the [Indecipherable] as we’ve said, they also want to go on holidays.

Rishabh Shah — Nuvama Wealth — Analyst

Got it sir, thanks a lot. I mean, that was very informative. Thank you sir.

Operator

Thank you. [Operator Instructions] Next question is from the line of Ronak Rathi, Individual Investor. Please go ahead.

Ronak Rathi — Individual Investor — Analyst

Yeah, hi, thank you for the opportunity. So, I joined the call a bit late. Just want to understand on — where do we stand-on the debenture raising plan as of now?

Amit Jaiswal — Chief Financial Officer

Yeah. The Board has authorized us so fa to evaluate the option of raising INR200 crores. So at the moment we are evaluating because we have enough funds available within the company. So at an appropriate we will go for the raising of the fund as and when it is required.

Ronak Rathi — Individual Investor — Analyst

Okay. All right, sir. And also, sir, as we are in middle of the upcycle in hotel industry, so do you come across a situation wherein, let’s say, you have taken a hotel on management basis, but then probably the owner of the property might get a feeling that he might be able to now manage the property on it so on and try to do it by himself instead of being associated with Royal Orchid. So how do we — how do we kind of align the owner interest as well as our interest in the upcycle as well?

Chander K. Baljee — Chairman and Managing Director

We try to do give our best to the owners. Of course, this is a thing which happens across the country and across the world also. When the hotels are doing well, the owners increase the rate. I don’t need the management company. So these things happen. There will be some hotels which will drop-out. When one drops out, 10 comes in. So it is okay. This is part of the businesses.

Amit Agarwal — Investor Relations

I would like to add here what Mr. Baljee has just said. See, the amount of services that what we as a management company give to the individual owner, the value of those services is much more than the fees what we — what the owner has to give it to us. Like, hypothetical example I’ll give you one, that the OTA business can come directly to the owner also, but he will have to shell out a large commission, the percentage of commission of an individual owner is much more than what we get for the chain. So that itself is the one point which can let the owner be with us.

Ronak Rathi — Individual Investor — Analyst

Okay, okay. And sir, because what is this cycle like, once the MOU is signed between the company and the property owner, so generally post that what are the activities that are taken, because we are seeing that, let’s say, you are saying that there are already 10 or 20 hotels that have been signed, but it takes a bit of time for us to go-live with that particular hotel. So is there any kind of refurbishment that happens with each and every such hotels with whom we enter into some sort of management contracts? So why there is this time lag from date of entering into the agreement versus to actually going live?

Chander K. Baljee — Chairman and Managing Director

Hotel come to us in the various stages. Some are greenfield, the hotel might take three or four years. Some are brownfield. The structure is ready and yet to the interior. Some hotels are — already operating hotels, they have to be refurbished. So there can’t be any hard and fast rule that so much time it will take. Also depends on what is the financial capacity of the owner to bring in the timely fund or does he engage some relative of his to look after the project or a professional project management company. Sometimes you just engage somebody to look after who is not professionally qualified. So this is very variable kind of a thing. You can’t say that the hotel will come on ex period of time. Some hotels come up very fast and some take long-time and some don’t come up at all also.

Ronak Rathi — Individual Investor — Analyst

Okay. And sir, in this whole cycle also are we getting enough inquiry for the management of such hotels or the trend is shifting more towards the owners who would like to manage it by themselves or there is no change as such? There is ample opportunity for Royal Orchid?

Chander K. Baljee — Chairman and Managing Director

Lot of inquiries today. In fact, we are — sometimes such is the inquiry we don’t even compare, everybody says come and see the hotel. We are not able to cope up with that. So that’s why we are beefing up our development team also and we’re adding more people in the development team. So that we can evaluate hotels faster, evaluate hotels, inspect hotels faster.

Ronak Rathi — Individual Investor — Analyst

And, sir, let us say [Indecipherable] hotel was a laggard for us in our financial performance. So, with the improvement in infrastructure, let’s say Delhi Mumbai Expressway got opened. And there are multiple initiatives also taking up, plus the hotel has also now come to a mature state. Do we see turnaround happening for that specific hotels? Are you seeing any kind of early signs of it? I know the Expressway has just got live recently, but otherwise in a just a broad sense I want to get an understanding from you.

Chander K. Baljee — Chairman and Managing Director

This hotel has turned around. In fact, Amit will give you the figures also. The hotel has turnaround. And I think its turned profitable for the first time in so many years. And now the debt is very manageable. Business is very robust. So I don’t think there will be a drag on the company any longer.

Amit Jaiswal — Chief Financial Officer

This hotel has been posting cash profit, but book loss over the years. So this will be the first financial year when this hotel is going to post profit. And last, if you really look at the numbers, last three quarter — all the three quarters it has posted a net profit. So that laggard with which the hotel was pulling us down has gone, I guess, and now almost INR1 crore and INR17 lakhs of associated profit we can see in our numbers — published number, that is on this hotel only.

Ronak Rathi — Individual Investor — Analyst

Okay. Got it. Got it, sir. And also the management fee that you mentioned for the quarter three is around INR9.7 crores. So that is the revenue figure, but if I have to get a ballpark understanding like how much it might contribute to my, Like at EBITDA level also, I understand there might be lot of overlapping of expenses to lease revenue or the other operating revenue. But, however, if I have to just get a ballpark understanding, right, typically if we missed.

Amit Jaiswal — Chief Financial Officer

Almost 48% to 50% goes to our EBITDA level.

Ronak Rathi — Individual Investor — Analyst

Okay, okay. Fine. Sir, just a small request. If we can kind of capture all these figures in investor presentation also going-forward, because if. If you would look at your comparable peer group companies, they are kind of disclosing it in their investor presentation. And that also help us in kind of extrapolating or envisaging how the performance will be because there are lot of moving change to our company, like there is lease revenue, there is a management fee, there is room revenue from the own properties. So it could give us a bit of sense of how we can expect the numbers going forward if have to extrapolate the projection.

Chander K. Baljee — Chairman and Managing Director

Point well noted. We will cover in our investors presentation going forward these details also.

Ronak Rathi — Individual Investor — Analyst

And, sir, just one last question from my end. If we have to get an understanding, like I saw the recent credit rating report which says we have got four to five own properties. So if we want to get an understanding, sir, how much is the revenue contributed from your own property, how much would be that and how much Bangalore contributes out of it, just to get an understanding on the geographical concentration?

Amit Agarwal — Investor Relations

See, If you really look at the — the contribution of Bangalore, the major contribution comes from Bangalore only. Out of the total revenue, almost in nine months — if I take the nine months revenue, almost INR70 odd crores has come from Bangalore itself.

Ronak Rathi — Individual Investor — Analyst

Okay. Okay. And in that also because I believe we have got three, four properties over there. Is it one specific property that is contributing significantly over there or it is distributed?

Chander K. Baljee — Chairman and Managing Director

Our flagship hotel in nine months, out of total 191, INR47 crores has come from the flagship hotel.

Ronak Rathi — Individual Investor — Analyst

Got it, got it. That’s really helpful, sir. Thanks a lot and congratulations on very good set of number. All the best to the entire team.

Operator

Thank you. [Operator Instructions] Next question is from the line of Amit Aggarwal from Nuvama Wealth. Please go ahead.

Amit Aggarwal — Nuvama Wealth — Analyst

My first question is, of course, on what is the current cost of debt which you have on the books?

Amit Agarwal — Investor Relations

There are three debts as I told earlier, okay? The standalone debt is at 9%. And the debt in Jaipur hotel it is a 9.5%. And the debt in the Icon is at 11%.

Amit Aggarwal — Nuvama Wealth — Analyst

Right. And if you, as you suggested, the goal for NCDs, what could be the potential level which you’re looking at?

Amit Agarwal — Investor Relations

See, we are looking somewhere around 9%, but we understand that our rating also has to improve, okay. And after this third quarter result, we are going for the re-rating of our company. Once that comes, then we will look at, but definitely we are looking at somewhere around 9%, 9.5%, not beyond that. Anywhere between 9%, less than 10%.

Amit Aggarwal — Nuvama Wealth — Analyst

Sure, sir. And another question on overall strategy going the next couple of years in terms of expansion, what I wanted to understand from you is, when you’re looking to get into, lets say a new hotel or new property if you take, what would you be looking for? Is it more of geographical expansion or is it basically tourism, but maybe you have reduced tourism in Bihar and couple of other things. So is there any specific which you look at for expansion purposes where there are gaps and you want to fill in? I mean, if you can throw light on the strategy for expansion.

Chander K. Baljee — Chairman and Managing Director

We are looking at, actually look at map. We are very much North, West and South. But in South, Tamil Nadu and Andhra and Telangana is recovered. Central India which is covered. These two sides we’ve covered. North Eastern side we have to cover. So we have a lot of things to cover. But we are working very aggressively on that, and I think by next quarter you will see very many, many more cities which have where we have planted our flag. And that will continue. So, I think we are well on our way and we’re also looking at some expansion overseas also.

Amit Aggarwal — Nuvama Wealth — Analyst

So, I was just coming to the overseas expansion part. I mean, any particular places where you could throw light on where would you be looking for expansion and would it be management contracts or revenue-sharing, how would you be going about it?

Chander K. Baljee — Chairman and Managing Director

Mostly management contracts. We are looking at Sri Lanka. We are looking at Maldives. We are looking at, maybe Southeast Asia. These are the things, but at the moment I can’t give you specific because we just started talking to people.

Amit Aggarwal — Nuvama Wealth — Analyst

Sure, sir. Sure. And the expansion would be primarily, as you said, asset-light model. So it will not affect your balance sheet going forward. Can I take that?

Chander K. Baljee — Chairman and Managing Director

No, expansion, as I mentioned to you, will be only in the Goa hotel and the Bangalore resort. There will be some some capital investment. But otherwise, no.

Amit Aggarwal — Nuvama Wealth — Analyst

Sure, sir. Thank you, sir. That’s all from my side. Thank you.

Chander K. Baljee — Chairman and Managing Director

Thank you.

Operator

Next question is from the line of Rajesh Agarwal from Proprietary Advisor. Please go ahead.

Rajesh Agarwal — Proprietary Advisors — Analyst

Now, FY’22-’23 is coming to a fag end. Will be very opportune for us to know what is the managements mind for the next year’s targets both on the topline and EBITDA level?

Amit Jaiswal — Chief Financial Officer

See, Mr. Agarwal, this year our target — this years target was INR300 crores of topline and INR80 crores of EBITDA. And as far as the EBITDA is concerned, I think we are almost there and we will be overshooting the EBITDA target for this year. So EBITDA, we should be closing somewhere around INR95 crores of EBITDA, and topline most probably anywhere between INR280 crores to INR290 crores we should be able to do. Depends on next 1.5 month of business. So next year we had set a target of somewhere around INR375 crores — between INR375 crores to INR400 crores depending on another revenue share of how many hotels we can add. Already, we have added two in this current financial year. So further another two or three we want to add. And if that happens, then we will definitely be able to touch INR400 crores because organic growth cannot be more than 10%, 12%. So that is the way we are looking at anywhere between INR375 crores to INR400 crores of topline and an EBITDA of around INR120 crores, INR125 crores.

Rajesh Agarwal — Proprietary Advisors — Analyst

All the best. All the best.

Amit Jaiswal — Chief Financial Officer

Thank you.

Operator

Thank you. [Operator Instructions] Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Chander K. Baljee — Chairman and Managing Director

Gentlemen, thank you very much for joining us on this call. And I would — I appreciate all the questions that you had asked and the requests for further information in the next quarter, that we will take care of. And I can assure you that we are on right path of growth and things should be doing well. We are very optimistic about the country’s future, industry’s future, and particularly our own company’s future. We’ve taken the right steps and that should yield results in the coming quarters. Thank you.

Amit Jaiswal — Chief Financial Officer

Thank you so much.

Operator

[Operator Closing Remarks]