SAMHI Hotels Limited (NSE: SAMHI) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Rajat Mehra — Chief Financial Officer
Ashish Jakhanwala — Managing Director and Chief Executive Officer
Analysts:
Vikas Ahuja — Analyst
Jinesh Joshi — Analyst
Vaibhav Hule — Analyst
Ronak Porwal — Analyst
Achal Kumar — Analyst
CA Smith Gala — Analyst
Samarth Agarwal — Analyst
Ghazal Gupta — Analyst
Hitendra Pradhan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 and 9M FY26 earnings conference call of Sami Hotels Limited. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are now the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
I now have the conference over to Mr. Ashish Jhakanwal MD and CEO of Sami Hotels Limited. Thank you. And over to you sir.
Ashish Jakhanwala — Managing Director and Chief Executive Officer
Thank you so much. Good morning everyone and welcome to Sami Hotels Q3FY26 earnings call. Thank you for joining us today. I’m also joined by our CFO Rajat Mehra, our VP and Head of Investments Gyana Das and Nakul Manakhtara, SVP Investments. Our investor relation advisors, Strategic Growth Advisors are also on the call. We have uploaded our Q3FY26 financial results and investor presentation on the stock exchanges and on our website and I trust you’ve had a chance to review them. Let me begin with a brief overview of the quarter before Rajat takes you through the financial results.
Quarter three FY26 was a strong operating quarter for Sami delivered in a period that saw external disruptions including the largest Indian airline facing operational challenges during December. Despite this, a portfolio demonstrated resilience and pricing power. Same store RevPAR grew by 13% year on year to 5,643 rupees. Total income growth was 16% YoY to 342 crores for the quarter. On an underlying basis, the EBITDA grew by 19% YoY reflecting strong operating flow throughs. However, changes in GST regulations impacted the margins which moderated the reported ebitda growth to 13.2% on a YoY basis. Even though there’s a short term impact of GST in part of our portfolio, we believe it will lead to greater sales volumes as hotels become more affordable especially in the mid scale segment and will offset any impact in the long term.
Further, it is important to note that all of our new inventory being added is an upscale segment which will remain largely unaffected by this change but also benefit from marginally lower capex due to reduction in GST rates across several construction items. This performance reinforces the strength of our city centric business travel portfolio spread across India’s most resilient office markets for past nine months. Office absorption across key markets remains very strong and has supported same store revenue growth significantly ahead of a long term target which we’ve always said is between 9% and 11% y oi. Now let me briefly touch upon our key growth initiatives.
The 170 room W Hyderabad continues to provide progress as planned design development is mostly completed and building modifications are underway. Mock up room will commence anytime now. This is a marquee asset for Sami and will materially lift our ARR profile both in Hyderabad and in the upscale segment in Bangalore. The demolition and pre construction activities for the 220 rooms Western Block in Whitefield Bangalore has commenced. This remains a fairly high conviction project in one of Bangalore’s deepest commercial micro markets. Across the portfolio we now have 4,900 rooms operational. We have incremental 1,900 rooms under development or rebranding of which about 1,450 rooms is a net room addition.
These projects will gradually shift our revenue mix towards upscale and upper upscale which is currently 42% contribution to about 60% upon completion improving long term earnings quality. Besides this we continue to have a very high quality and actionable pipeline of opportunities to fuel our future growth and majority of it as of date are in form of capital efficient variable leases that can be easily funded from our cash flows. With that I’ll now hand over to Rajat to walk you through the financial performance in more detail.
Rajat Mehra — Chief Financial Officer
Thank you Ashish. Good morning everyone. Let me take you through the financial performance of Q3FY26. Total income for the quarter was 342 crores up 16.2% on a year on year basis. Same store asset income grew by circa 14% on a year on year basis. New opening including Trinity Whitefield and the new Holiday Inn Express rooms in Calcutta and Greater Noida contributed to incremental revenue. This was partly offset by income loss from sold and discontinued assets including four Points Chennai and Sheraton Hyderabad. Commercial floors which we have converted to 42 rooms consolidated EBITDA stood at 126 crores.
Reported EBITDA grew by 13.2% on a year on year basis. Excluding the GST impact of circa 6.7 crores. EBITDA growth was 19.2% on a year on year basis. GST impact was mostly in our mid scale portfolio where fair bit of our revenue Actually comes from rooms being sold at less than 7,500 rupees. EBITDA margins were 13.9% as compared to 36.9% as compared to 37.9% last year. This drop in margin attributed to the GST change is circa 200 basis point. Underlying operating cost and flow through remained stable during the quarter. Our finance cost declined sharply to 40 crores versus 60 crores last year.
The cash interest outflow is in the range about 34 crores for the quarter. Balance cost in the finance cost represents non cash and India’s adjustments. Our profit after tax for the quarter was 48 crores. The PAT attributable to SAMI shareholders is 39.6 crores while the minority interest accounted for 8.5 crores. As on 31st of December 2025 our net debt stood at 1,450 crores. The average tenor of our facility is circa 12 years which actually allows us a strong margin of safety in terms of our liquidity. The trailing 12 months EBITDA excluding noncash ESOP cost increased to 482 crores.
Our net debt to EBITDA remains stable at 3x. Importantly, we continue to fund our growth capex through internal accruals with no material increase in the net leverage expected. With that I hand over to Ashish.
Ashish Jakhanwala — Managing Director and Chief Executive Officer
Thanks Rajat. So in conclusion, Quarter 3 FY26 reinforces three key messages for Sami. The first is that while global headlines remains volatile on ground indicators in our core markets show a strong trend line driven by India’s economic engine. Our portfolio continues to deliver strong consistent operating performance and growth and can manage repeated event risk as we have seen in the last nine months. And the last bit is that we have a strong growth pipeline and all the resources to deliver to achieve our targeted revenue of circa 3000 crores by 2013. We will now open the floor for questions.
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 N1 on the Touchstone telephone. If you wish to remove yourself from the question queue, you May Press Star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vikas Ahuja from Antique Stockbroking Ltd. Please go ahead.
Vikas Ahuja
Yeah, hi. Thank you for the opportunity. My first question is as we are already at the end of January, how is the current quarter shaping up? Does the momentum seen so far will continue? You Know, with the World cup coming next month, do we anticipate any uptick from this event overall? Just trying to understand this momentum improve from here on. That’s my first question.
Ashish Jakhanwala
Thank you. Thank you Vikas. So yes, the business on books for February looks pretty strong. January is always slightly slow because of the year end break and this year 10 January extended to pretty much 15 January because of the the pattern of school holidays in north especially Delhi and all. But February looks extremely strong and not just because of the World cup actually because generally a lot of demand is getting compressed between now and end of January, end of February and early March. So we do think that the momentum that we’ve seen in quarter three will actually continue in quarter four.
Vikas Ahuja
Okay, thank you. And in terms of you know the net debt that they increased by crore this quarter to 1450, could you help us maybe break down how much of that increase was driven by capex and how much of that CAPEX was offset by operating cash flow. Additionally you know you had earlier guided for 300 crore of debt reduction from internal cash flows by 2030. Does this still hold on considering that we have announced incremental expansion during the last quarter?
Ashish Jakhanwala
So Vikas, largely the minor change in the net debt was an account of Navi Mumbai where we had to make a certain extension payments to the authorities to you know we are anticipating some inward investment from GIC in the Bangalore project. So you know there’s always a bit of a mismatch in those two things. So that 70, 80 crores was largely on account of the Navi mobile payment. In terms of our long term guidance both on net debt and also on gross debt reduction continues to remain as is. I know there is incremental investment that we have committed to Navi Mumbai but if you look at our investor presentations which we’ve uploaded earlier, the cushion between a total cash accumulation and CAPEX continues to be very comfortable.
In addition to that as we’ve demonstrated in the past because we continue to seek opportunities for very very limited asset recycling. So I think we remain fairly comfortable and confident about continuing to achieve that number of debt reduction alongside maintaining the CAPEX plan that we have put together.
Vikas Ahuja
Thanks Ashish. And you know the removal of this input tax credit led to moderation in EBITDA which we highlighted in the presentation by 2. Does this imply that over the next few quarters EBITDA will grow at a slower pace than revenues or do we have levers to offset that in the near term? And also you know for FY27 should the revenue growth largely mirror the revpar growth with only incremental decisions given that most of our capacity expansion is expected to start from FY28 as the high tech city property is also likely to complete end of FY27 and also one.
Lastly, one housekeeping question. Can we also possible to get a ADR growth number for this quarter?
Ashish Jakhanwala
So a couple of them, one is on gst. So you see the GST impact will be visible for the short term. We do expect that overall reported numbers will kind of not show that from quarter one. And that’s just the adjustment to the base effect because don’t forget last year first quarter was pretty terrible because of India, Pakistan, the Ahmedabad Air India crash and all of that. So we think that there will be 150 basis point, 200 basis point impact on margins because of GST in the short term. But yeah, I think there are more than enough levers to start offsetting that.
But it’ll take a quarter or two really. So that’s on 1. 2. Second question was really around the next year FY27. So I think FY27, while there is no large opening because there’s a lot of other levers that will come into play, the first really is that if you see we’re adding very small bunches of inventory this year. But having said that, all of that is now fully operational and will get full year benefit in next year. And some of the hotels like Sheraton Hyderabad which are clearly outperforming the averages are the hotels which are benefiting from almost a 20% inventory growth because of the new addition.
So that the Trinity Hotel in Bangalore which we had acquired last year has really ramped up. Well, we expect that to start kind of outperforming through FY27 the new rooms in Holiday Inn Express. So FY27 we have reasonable levers to kind of add on top of same store revenue growth. That was your second question. Third question was in terms of your ADR occupancy. So if you see same store, the ADR growth was 15.9%. YOY the occupancy was stable, except not stable. It was 73%, had dropped about 1.6 percentage point. The total revpar growth therefore was ending up being about 13.3%.
This is all same store and we continue to believe that all operating parameters should only be reported on same store.
Vikas Ahuja
Sure, I get it. Many thanks and wish you luck for the next quarter. Thank you.
operator
Thank you. The next question is from the line of Jinesh Joshi from PL Capital, please go ahead.
Jinesh Joshi
Thanks for the opportunity. Sir. My question again pertains to the GST impact. I mean in response to the previous participants question, you mentioned that there can be an impact of about 150 to 200 basis points in the next couple of quarters. I was just wondering whether a pass through of this cost increase is possible or not, Especially on the corporate side. I understand that typically the negotiations happen on an annual basis, but given the loss of ITC credit, can we not renegotiate for a slightly better rate at least on the corporate side? So your thoughts on that and also on the retail side, I was just wondering whether a pass through is possible or not.
And if not, I mean, what are the challenges on that side?
Ashish Jakhanwala
Ganesh, very important question actually. So let’s tell you the what’s happened in the quarter. So first of all the pass through is already happening. And if you see for the quarter when same store grew at about 14% and let me tell you, if we were to do an impact of the airline crisis in December, it was pretty, pretty substantial. Now if you look at the revenue growth in the mid scale segment that we have shown on page number 15 of our presentation, actually the mid scale segment which has the highest impact of GST also showed a revenue growth of 16% and 14% respectively.
Now what will happen is of course the input tax credit loss will show in higher cost. But if you look at the total growth is still pretty substantial in those two segments. So the alignment needs to happen in the reporting. The actual number continues to be in our opinion reasonably strong, especially given December was almost a three week wipeout. We are typically prepared for December to be a ten day wipeout. But December almost became a three week wipeout because of the airline crisis which started in the beginning and then continued because of the year end, new year vacation and all of that.
Right. So Dinesh, I think in quarter four, February onwards, you’ll start seeing a pretty back strong recovery to margins. But that’s largely driven by revenue growth. So yeah, you’re right, pass through has already started happening because the revenues have started going up. But I cannot change the way the numbers are reported which is the cost, even reflect in the cost line items.
Jinesh Joshi
Got that? And sir, on the corporate side, when do annual renegotiations typically happen and if it is, are we going to take into account this ITC loss which will be there with us and then renegotiate for rates accordingly?
Ashish Jakhanwala
Answer is yes, because the customer clearly understands that if he was paying 100 rupees of room rate and 12 rupees of tax. Earlier there was 112 rupees being paid by the customer, today it’s 105. So if we account for a slight increase, he’ll still be paying 112 or less than that. So as you know, any contract is renegotiated, you will start seeing coming back that actually helps increase demand. Because while we can increase the room rate, offset the cost impact, there is not really the real growth for customer will still be 7, 8, 9%. But more important Dinesh, the nature of business is changing.
Now we all who underwrite hotel sector needs to prepare ourselves underwriting the sold out dates versus rest of the year. And we are seeing the demand compressed between few days every quarter. So let’s say last quarter it was November and November would have contributed majority to the quarterly profits and growth. This quarter it’s going to be period starting from 20 January or 25 January till pretty much middle of March. And therefore in those days contracted rates play very little role because our ability to reprice hotels on a daily basis three times a day is very, very strong.
So hotels which have an average rate of 13,000 rupees are already priced for 20,000 rupees in the month of February. Dinesh. So I think the industry has changed. The dependence on the locked in RSP prices for the year and its impact on the average reported room rate is kind of diminishing every year. So we are worried, I think the demand is very strong. You will start seeing fairly quickly this whole cost being absorbed. Because we do feel that GHG reduction is across the sectors and industries which should help boost overall economic activity and give us the paybacks.
Jinesh Joshi
Got that. 7. Last question from my side. Our FNB revenue was up by about 9% in this quarter. And I guess in the previous quarters we had mentioned that ballrooms are under renovation, especially at Hyderabad and Pune. And accordingly we should expect some kind of a pickup happening on the FNB revenue side in second half of the year. But this 9% growth, when I compare it with our same store Revpar growth of about 13%, it is still lower. So just wanted to check on this part whether those ballrooms are operational or not. And if yes, then why is the FNB income still lagging?
Ashish Jakhanwala
So a couple of clarification. First of all the ballrooms are operational in both the hotels. Hyder in Sipone and Sheraton Hyderabad, the same store, FNB growth was actually 10% 9, not 9%. The 9% is overall and there is obviously incremental rooms that we’ve added in Holiday Inn Express and other portfolios and 10% FNB growth is actually pretty decent. While rooms have really outperformed at 13.5%, 14% RevPAR but 10% FNB growth YoY. This used to be 6, 7% Dinesh till last year. Now we have gotten to about 10% FNB growth y o wise I think ballrooms are starting to show impact and as they stabilize I think you will continue to see that mirror close to double digit yoy growth.
Jinesh Joshi
Got that sir. Thank you. Thank you so much and all the best.
Ashish Jakhanwala
Thank you Dinesh.
operator
Thank you. Before we take the next question, a reminder to all if you wish to ask a question please press star and 1. The next question is from the line of Vaibhav Hule from Hairpong Securities. Please go ahead. Vaibhav, your line is unmuted. Please proceed with your question.
Vaibhav Hule
Hi, can you hear me?
operator
Yes, I can hear you. Please go ahead. Okay, great.
Vaibhav Hule
So first of all congratulations for a good set of numbers. My first question was regarding our upper upscale and upscale segment. So we have seen bit of occupancy decline for this segment particularly in this quarter. Any particular reason for that?
Ashish Jakhanwala
Generally what happened in December? The airline issues that we saw in December. Okay. Only pertaining to that there was a. Bit of a because upscale tends to have group movements and conferences and mice and obviously such a significant airline disruption led to massive calculate cancellations. So that’s why the entire occupants flight occupancy dip you saw was in the upscale upper upscale segment.
Vaibhav Hule
Understood. And next on Trinity Bangalore. I understand Marriott had taken over operations for Trinity in August and just wanted to understand how has been the performance post Marriott taking over and since now Marriott is operating the property do we plan to delay the overall renovations planned for Trinity?
Ashish Jakhanwala
So webhav while the team pulls out the exact number changes. I’ll answer the second part first. So what we are doing in Trinity is doing so we did earlier we were thinking of investing about the plan was to invest about 7080 crores and full renovation for it to be converted to a part of selection and managed by Marriott. What we’ve actually done is we’ve done an interim renovation. So we’ve already spent about 7 crores in this hotel largely towards wildlife safety and technology. We are going to complete a very small refurb program between now and March end which is about 2324 crores and with that we think the hotel is extremely extremely well positioned to kind of move up on its rate chart in terms of its performance.
If you see in July 25th this hotel was doing a total revenue of about 1.8 crores a month with a rate of 5,900 occupancy of let’s say 55, 60%. We have moved that revenue in November, December to about almost like a 3 crore average per month. So we’ve done that 50% growth in revenue, a little bit more than 50% growth in revenue and the rate is now sitting between 8,000 and 10,000 on a monthly basis in October, November, December and occupancy being around 50%. While the occupancies has remained the same because of renovation, we have pushed the rate almost 2x of what it used to be prior to the Marriott management.
And therefore the resultant asset income has gone from 1.8 crores a month to almost, I would say 2 and a half to 3 and a half crores a month. So yes, there is a sizable impact. And as we complete the current ongoing refurbishment which gets completed by end of March the next fiscal year, this hotel should start seeing very strong consistent performance with no interruption for renovations for FY27.
Vaibhav Hule
Understood, sir. Just lastly on our recently added inventory including Kolkata, Whitefield, Bangalore and now the Sheraton, Hyderabad and Pune as well. So, so how has been early demand trends in the new inventory as the full absorption happened?
Ashish Jakhanwala
Yeah, so I’ll give you, I mean the impact in FY26 is going to be small but FY27 is when they’ll start really impacting. So I’ll give you one example for Whitefield Hotel. We were just checking those numbers earlier and you know sometimes you have reporting anomalies. For instance, Whitefield is an existing operating hotel so it’s classified as the same store. And we suddenly realized that the total revenue growth is 15% in rooms but the RevPAR growth is 13.5% and mathematically it’s incorrect. And when we dig deeper we realize that Whitefield Hotel because of those 56 rooms has seen a total revenue growth, room revenue growth of almost 45%.
Right. So those 56 rooms being added to existing 160 room hotels saw that hotel revenue jump by almost 45% because those rooms are slightly larger. Calcutta is stabilizing really well. It’s interestingly, even though people don’t talk a lot about Calcutta, it is a silent performer. That hotel is stabilizing quite adequately now. The rate is, we are actually now touching. Okay, so well, it was almost doing an occupancy of 62% in the first few. If you see from July till December the average Occupancy is about 62.4%. The rate is almost upward of 4,000 rupees. It’s almost touching 4,500 rupees.
It has contributed almost 6 crores opening to our top line. So all the hotels are stabilizing really well. Sheraton Hyderabad has just gotten added. So you’ll see the impact of that coming in February and March. And same for Hydrien C Pune.
Vaibhav Hule
Understood. And sir, our expansion pipeline shows status of development is still into design stage for all of our planned greenfield projects. So are you confident that you will be able to execute projects within two to two and a half years to stick to the mentioned timeline?
Ashish Jakhanwala
So if you see slide number 18, we’ll take you project by project. For instance in W Hyderabad the work is going on on site. Actually the mock up should be ready in the next few months. So it’s an existing building and which is being retrofitted to being converted to a W in courtyard Pune Tribute, Bangalore, Whitefield Tribute which is where you’re seeing a lot of design, design, design. These are existing hotels, right? So these existing hotels have to be taken through a renovation which will start let’s say in April or so. So the timeline between design and startup, renovation and complete is not like a greenfield project which is 12, 18 months.
You start first phase comes to first of all if they start going into renovation in phases they come back also in phases. So that’s why you’re seeing a lot of status being designed coming to western Bangalore. The western Bangalore we will put it as construction when the effectively the RCC starts getting casted. But the demolition of the existing building has been completed. Site leveling has been done. We should start the piling shoring in the next month or so. So there’s active work in all of those sites. The only way that it is true design is actually one financial district, Hyderabad and the Navi Mumbai project.
Vaibhav Hule
Understood, sir. Perfect. Thank you so much and all the best.
Ashish Jakhanwala
Thank you.
operator
Thank you. The next question is on the line of Raunak Purwal from Nuama. Please go ahead.
Ronak Porwal
Yeah, hi, this is Rajiv here. Good morning sir. So I am on slide 13 and 14. This is the same store. If I just delete that. And for this quarter it is looking like the incremental margin on this revenue is close to 4%. But considering that we are, you know, we have grown RevPAR at 39% and the previous year few quarters we have Seen that this number shooting up to close to 60%. So while the revenue is driven more by room revenue, ideally the flow through should have been higher. Right. Any thoughts on this?
operator
Ladies and gentlemen, the management line has been disconnected. Please hold while we get them reconnected. Ladies and gentlemen, thank you for being on hold. The management has been reconnected. Thank you. And over to the management.
Ronak Porwal
Thank you. Sorry, Rajiv, you were on the call. Can you start your question again?
Ronak Porwal
Yeah, so I was talking about Slide 13 and 14, which is on the incremental revenue and incremental EBITDA. So if I were to calculate incremental margin for this quarter, it is close to 44%. And considering that it is largely driven by room revenue, which has grown at faster pace, the flow through should have been higher. Right. Because we have in the previous quarters we have seen this number hovering close to 60% as well. So your thoughts on why the flow through is lower?
Ashish Jakhanwala
So I think, Rajiv, a large part of that was the expected drop in revenues in December. And that’s where the flow through is only about 45%. You’re right. This should be ideally about 55 to 60% in the GST. Actually our margins would have been or growth would have been 19. So I think it’s largely because of the December impact because December upscale kind of dropped from. So what happens is that every hotel is prepped for a certain quarter in terms of the revenue buildup. And therefore we saw strong revenue build up for the quarter accordingly. Some of the adjustments to the operating structures, payroll and outsourced staff and all of that is done. But the sudden drop in revenues in the two weeks in December kind of, you know, made a slip on that flow throughs, which typically should be in 55, 60% and this quarter was 45%.
So you’re absolutely right. There’s a 10% slip in the flow throughs.
Ronak Porwal
Secondly, about your comment on let’s say it’s demand getting compressed in some particular dates. So what is the, I mean, what is the metric we should follow to just get a sense on let’s say for the upcoming fiscal or the next fiscal world? How do we track this compression in some dates? Any metric you track?
Ashish Jakhanwala
Yeah, so Rajiv, we track metrics. For instance, we have this demand compression graph where we say how many days in a year the occupancy was in which banks. Okay, so let’s say how many days the occupancy was between. Thankfully, now there’s no 0 to 30. We had prepped it in the COVID time. So we had a graph of 0 to 30, 30 to 50, 50 to 70, 70 to 90 and 90% plus which is pretty much sold out. So we do track across the portfolio and buy hotel. What is that sort of demand compression that we are seeing? And also how is the rate responding to those buckets? So therefore what was the average rate in the 70 to 90 bucket and when the number of days the occupants was above 90%, how did that rate move up and did we really yield those days? So we are tracking that.
We what we’ll do is Rajiv we will use to put the semi intel page. We will include that batch where we’ll show you this demand compression chart so you can see what’s happening this entire year. This is three quarters. So just show me this number. So I’ll give you an example. What’s happening is for the last three quarters, if you see the days the occupancy was upward of 90%, almost 30%. So 30% of all days in the last nine months across our entire portfolio the occupancy was upwards of 90% incremental. 28% of the days the occupancy was between 70 and 90%.
So if you add those together you’re almost at 50, 60 odd percent, 57% when the occupancy is upwards of 70%. And the other data that we need to see, how does the rate move? So for instance if the average rate between 70 to 90 bucket was 6,826, the same rate became 7,500 rupees in the days the occupancy was about 90%. So you can see how much you yield between 70, 90 and 90 plus. And if you talk about days when you’re 50 to 70%, actually the rate was only 6,000 rupees. Right. So you’re moving from 6,000 to 7,500.
So we do drag this demand compression trends across hotels. And for the portfolio which is what is showing us the fact that increasingly it’s about yielding that one third of the year really well. And that creates the whole yoy growth, that creates the whole flow through all of that is a gift of that demand compression.
Ronak Porwal
Yeah, just to follow up on that. So the shifting of bucket towards let’s say higher yielding or where the demand is stronger, how far forward? Let’s say the visibility we have in terms of giving confidence that FY27 is looking stronger than FY26 or I would say before that.
Ashish Jakhanwala
So well, you know I can give you the Secret sauce. But as they say, I can give you the recipe but you can’t get the sauce yourself. Right. I think the answer lies in mapping holidays because they are very predictable, Rajiv. And you know, today you can map all the holidays on the graph. Increasingly you have to account for certain event risk. Now the event could be different. Event could be India, Pakistan or Ahmedabad or monsoons or an airline crisis or something. Right? And what we are learning is besides that, mapping those holidays, you have to also map unknown events in different parts of the year and then layer up the positive events, the large group movements, the conferences, so on and so forth.
I’ll give you an example. Goa is going through a conference for oil and gas. I don’t think one can find a room in Goa in the next two weeks or so. Similarly, when conferences happen in Bangalore, you can sell a room for 30,000 rupees, 35,000 rupees. So events are booked much in advance actually. So you have ability to kind of map, I would think 65% to 70% of how the demand compression will work and the balance 30%. I hate to say this is a short lead where your revenue management team and your ops team needs to be really up on their feet to respond fairly quickly.
Ronak Porwal
Sure, that’s very helpful. I’ll reconnect on the Sam intel bit.
Ashish Jakhanwala
Thanks.
operator
Thank you. The next question is from the line of Achal Kumar from hsbc. Please go ahead.
Achal Kumar
Hi, thanks for taking the question. I had only two questions. Sorry, kindly excuse me if you already answered because my line was bad. So just want to understand your quarterly performance. And if I look through the cost line items, I can see a huge jump in something called fixed cost and the variable cost. What is going on there? And on the employee side, because of the new labor costs, you have booked one of 11 million. But then going ahead, how would this. Because this will become normalized next year. Right. So how would this impact your employee cost? Thanks.
Ashish Jakhanwala
So, Achal, first things first. When you look at the operational efficiency chart which shows individual cost head, the growth that you see there is largely an impact of the input tax credit that we would get. You would get input tax credit across each line item. How would you adjust for that?
Achal Kumar
So it goes as a cost in each line item. In each line item. So Achal, you will see the GST input tax credit getting kind of spread across all the key cost items. So that’s one reason why you see slightly elevated cost across let’s say fixed or variable or all others. Actually variable typically remains between 19 and 21% it’s 20 odd percentage. It’s pretty stable. It’s largely going into your fixed cost. So that’s largely a GST impact which the input tax credit is getting added to the expenses. Number two, you’re asking us about the labor code. So one time has been taken in any case for the next 12 months.
An implementation.
Ashish Jakhanwala
Yeah, so we’ll actually reset the overall salary structure. Good for us that you know we were actually calculating the entire cost at 40% of base or the way the wages defined. So we’ll only have to move from 40 to 50 and a small percentage impact on that of gratuity and leave in catchment which also depends as to how many people actually stay with us for those basis many years. So it would not be a major increase in the overall cost as we move forward. One time impact has been taken off completely.
Achal Kumar
Yeah Rajesh. Thankfully because of being a young company and high attrition our impact was only 1.1 crores against some of the peers which have for instance shown very high number. And two like Rajat clarified that we were already at a pretty progressive 40% basic to total CTC and the regulation is only recommending it to be 50% so we really don’t see any sizable noteworthy change to the payroll structure.
Achal Kumar
Okay, perfect. Thank you.
operator
Thank you. The next question is from the line of Smith Gala from RSP and Ranches. Please go ahead.
CA Smith Gala
Yeah, thank you for the opportunity. My first question was regarding the revpar. We have consistently seen double digit growth. In the Revpar for at least the three quarters this year. So in the shorter term with a. Higher base of Q4 last year and. If you want to look at a longer term of two, three years, do we see a sustained double digit or a low teens growth in the revpar. And what will drive the same. So I think not just for the current quarter but we’ve always mentioned that our demand supply modeling tells us that the total revenue growth which is largely being attributable to revpars actually will remain in high single digits to early double digits. So a double digit revpar growth is clearly something that we are fairly confident will be maintained in quarter four in spite of there being a very high base last year. So we don’t see any risk to that. And about the longer term sir.
Ashish Jakhanwala
So we’ve mentioned that in the long term we expect revpars to remain between 7% to 11% same store, sorry 9% to 11% CAGR for the next 3 to 5 years on same store, hotels and I think that same store is something apologize that we keep repeating. But for us it’s really important that all these KPIs are being discussed on same sets of hotels that have not gone significant change. So.
CA Smith Gala
Yeah. Okay. And next bookkeeping question. How do you see the tax rate for the full year FY26 and yours coming forward? Can you repeat the question please?
Ashish Jakhanwala
A bookkeeping question. Tax rate for the full year FY26. And FY27 and beyond. So see, we are actually sitting on a huge losses. So at least over the next three to five years we don’t actually see any significant tax outflows. What you would actually see is some bit of a reversal or deferred tax asset being created on our books. So after that it would actually be a non cash tax line item that you will see in the P and L. But there will not be any consequent cash outflow that we see at least for the next two to three years.
CA Smith Gala
Okay, so what will be the percentage. Wise quantum of the just the book entry but 7 crore you have?
Ashish Jakhanwala
Yeah, that’s the deferred tax expense which is there because in certain assets which actually have turned profitable, that’s about 25% of the profits of that particular hotel which is there. But on a consolidated basis it reduces because we will have to look at the tax expense only for those entities where therefore tax has been created.
CA Smith Gala
Okay. Okay, that was helpful.
CA Smith Gala
Yeah, fine. That’s all from my side. Yeah. Thank you.
operator
Thank you. The next question is from the line of Samarth Agarwal from Ambit Capital. Please go ahead.
Samarth Agarwal
Hi Dean. Thanks for this opportunity. Just a couple of questions from my side. Firstly, how are the corporate negotiations for CY26 faring till now in terms of just the number of rooms and the. ARR increase that is being agreed on? And secondly, what would be the breakup between the EBITDA margins between the ACIC. Portfolio and the rest of the portfolio and how much of more integration in margins can be still expected.
Ashish Jakhanwala
So the first question is, and I think we tried addressing it earlier, the whole concept of RFPs driving the average rate is sort of becoming a little not that relevant because as I said, there’s very few contracts with last room available provisions. Dynamic pricing is becoming more and more real and that’s why you’re seeing the ability for a hotel to price when it’s above 90% at almost 25% premium to let’s say a day when its occupancy is 50%. So that shows you that the pricing power sits squarely with the hotel today in terms of the RFPs, we are seeing a really healthy acceptance of RFP growth.
And I’ll tell you why Sumit, because last year what has happened is companies realized that on sold out dates they had to really book through, let’s say an online discount to bar which was really, really high. So they’re also realizing that the net rate they pay through the year was really high compared to the RFP rates and therefore the resistance on RFP rate increases. Kind of becoming a bit of an old fashioned conversation to be honest with you. The second question was EBITDA margin. If you see the asset level, EBITDA for including Same store, including ACIC is 40.1% and for ACIC is 40.3%.
So now ACIC is fully integrated in terms of its EBITDA margins. It’s reporting the same 40% EBITDA for both same store non ACIC and same store ACIC.
Samarth Agarwal
Got it. That’s all from my side. Thank you.
operator
Thank you sir. Thank you. The next question is from the line of Ghazal Gupta from Ask Wealth Advisors. Please go ahead.
Ghazal Gupta
Hi sir, Congratulations on the results. I just have one basic question. So our hotels are divided into three categories. Where in the upper mid tier segment the ARRs are in the range of 7900 or so. Now there would be hotels which would have ARR below 7,500 and above that as well. So just wanted to understand that, you know, would we face any issues in terms of raising prices in this particular category because the customer would end up paying a lot more. 18, I mean 18% versus 5% which they’ll be paying earlier. So just wanted to understand your thoughts on this part.
Ashish Jakhanwala
So Ghazal, the GST is a beautiful puzzle because it doesn’t happen by hotel, it happens by every room that is sold. And I can tell you even in upscale there are hotels which have had 20% of its room revenues coming from rooms sold below seven and a half. And to that extent a pro rata input tax credit is lost in that hotel. So pricing is a daily job for each room and there will be acceptance and resistance depending on how busy the city and the hotel is. Price. I really don’t think that increasing the price is relating to gst.
It’s about demand and supply. We have seen rate growth being extremely strong for last several quarters. Gst, no GST incidents, no incidents. So it’s a factor of only demand and supply determines the pricing and nothing else. Demand remains really strong, supply is non existent. Or near non existent in core markets. And therefore the confidence level that represents parts should continue to grow in early double digits. So it’s all going to be decided by demand and supply. And again I’ll repeat, the cost of repeating it all depends on those days when the demand is so compressed that effectively you can reprice your hotels with high efficiency.
It’s demand and supply. It has nothing to do with GST or non gst. I mean the day after GST was implemented, if the hotel rate went up by 15%, let’s say one could argue that 12% is, you know, 7% is just the GST impact because the customer is saving 7% GST. But it’s just hypothetical. The real thing is what is the real rate growth and it’s demand and supply.
Ghazal Gupta
Okay, okay, that’s helpful sir. And secondly on the asset recycling part, is there any update on that segment? Because last quarter we had mentioned that, you know, there is 135 crores of asset recycling which is. So any update on that front?
Ashish Jakhanwala
No. So the, the only thing is that asset recycling we have completed large part in the last, let’s say three years or so. At this point we still feel there are one or two hotels where there is a recycling opportunity. But we don’t have any definitive agreements or decision on that as yet. It’s a part of a plan and I think we’ll give ourselves another 12 to 18 months to execute that.
Ghazal Gupta
Thank you so much sir. Thanks a lot.
Ashish Jakhanwala
Thank you.
operator
Thank you. The next question is from the line of Hitendra Pradhan from Maximal Capital. Please go ahead. Your line is unmuted. Please go ahead.
Hitendra Pradhan
Yeah, so sir, just two questions. So sorry for probing further on the GST point. So you know, for the customer who was playing paying, you know, and you gave an example, 112, but that 12 rupees was available as input tax credit but now it is not available. So for your customer, you know, the price has gone from 100 to 105 effectively because he doesn’t have the ITC. So this 5% impact, you know, when you have gone back to let’s say your corporate customers, what’s been the outcome of this? You have let’s say less than 7,500.
What has been the mix of the outcome? So have you, you know, what is the weighted average impact on this after all your negotiations?
Ashish Jakhanwala
No, there is no negotiation on GST with the customer on a real time basis. Right. I will again repeat, hotel prices are decided every single day. I do a revenue of two and a half crores a day on a weekend I do the same hotels to five and a half crores on a weekday. It’s not that you’re negotiating with a large company or Microsoft on a daily basis or a monthly basis, quarterly basis the hotels are being priced and I’ll repeat on a demand and supply right now gst, you’re right for in the mid skill segment on that given day if you were to assume the rates were 100 rupees the customer is paying 7 rupees less GST the input tax credit is being lost by us, not by the customer.
But again the hotels are being repriced on a daily basis. So same segment has reported a few 14 to 16% revenue growth. I’d like to believe some part of that was because for the customer the real rate growth may not have been 16%. But again not easy to say that because the rate growth is being reported on a weighted average basis whereas the GST 5 to 7 depends on. So let’s say if Rajat buys a room for 7000 rupees the same day I’m being sold a room for 8000 rupees in the same hotel on that pro rata income that Rajat has given me, I lose input tax credit on my.
I don’t. And we are not able to really it’s just not possible to determine for those rooms which were sold for less than seven and a half was there a price increase. So I think we all need to. I know we would like to calculate it to the last level but it’s just not possible mathematically. We have to agree to the fact that the total revenue growth in the same segment where GST is most applicable has been 14 and 16% yoy in spite of three weeks in December being wiped out. So let’s feel good about the fact that the demand remained very strong, the pricing power remains with the hotel and yes in the short term there is a YOY margin impact but that will really disappear as we start absorbing the revenue growth.
Ashish Jakhanwala
Also not all the customers customers actually can take the benefit of the GST grade whether in this era or earlier. The way credit can be taken by a corporate customer if they have their office which also has a GST number in the same state where the hotel is. So if somebody is traveling from Delhi to Bangalore and he is actually being charged GST in Bangalore, he doesn’t have an office in Bangalore, he can’t take the GST credit for the stay is doing so it’s not that all the corporate Customers are actually losing or gaining because of the gst.
Some of them are. The only thing is for them the price has reduced on an overall basis. Instead of say 118, they are paying 105 now. Just as an example.
Ashish Jakhanwala
Yeah, sorry, but there is no. Unfortunately a very easy answer to this. It’s extremely complicated and therefore we should remain focused on what’s been the real revenue growth in that same segment. And I think we are very confident that the revenue growth is so strong that even this margin compression will disappear in the next quarter or two.
Ashish Jakhanwala
Yes sir. So this is well understood. In fact you are right. So I think the corporate customers who don’t have the office will not be able to avail and also the individual customers anyways were not available. So for both these categories it is cheaper. This is well understood, sir. And on the pipeline of expansion, so you know I’m referring to slide number 18. So you have around 1900 odd rooms that you have laid out that are going to come up, you know, till FY30. What about the other inorganic opportunities or the pipeline if you can throw some color on that.
And is it even possible given the balance sheet constraints that.
Ashish Jakhanwala
I think I did mention in my opening remarks that we continue to have a pretty interesting actionable pipeline of available leases. And that kind of also addresses your second question about financial capability. And I won’t even go to balance sheet as it exists exists today because we are at three times net debt to ebitda, a significant amount of our capital is invested in assets which are not producing EBITDA today. So if you were to only put debt on assets which are currently operating, a net debt to be double 2.5 times or so. So the balance sheet is pretty in a solid state.
We are generating about so TTM free cash was 300 crores. But if I take the current interest rate levels because GIC investment happened in July May and therefore the reduction in interest rates happen subsequent to that. If I take current interest rate but historical EBITDA our free cash will move from 300 crores to 350 crores. Should be circa 400 crores plus in the next 12 months because of the growth in earnings. And trust me, 400 crores of free cash for a company like ours is more than adequate. Variable leases on the first day require 5, 7, 8, 10, 15 crores investment.
Then your partner has to invest majority of the capital before you move in into the fit outs. Right? So I think the variable leases is our answer to continue to grow without really putting any pressure on our balance sheet because that only barely uses the free cash that the business produces. A large part of a committed capex is in large projects like Western Bangalore and Navi Mumbai which in all fairness the capex cycle will only kind of bulk up starting FY28 29 at which point of time the EBITDA from W Hyderabad, the renovations, the Trinity Bangalore, all of that will also start kind of getting an impact on gi.
So I think we have adequate buffer plus there’s incremental 150 crores of investment pending from GIC over the next let’s say two two and a half years. So that also gets added to our free cash. So Hilinder, we are sitting in a very comfortable situation and I have confirmed earlier and I’ll reaffirm that most of our current discussions on pipelines are all variable leases which do not require us to put cash up for acquiring an asset. It only requires us to do investment on fit outs.
Hitendra Pradhan
Okay? Okay. And you also alluded to this the 3000 odd crore revenue ambition in the next four odd years. So that is around almost two and a half times more than the current run rate. So so this 300 crore free cash flow that you have produced in the TTM basis so you are, this is excluding everything other than after including everything other than growth capex. I’m assuming this 300 crores so that you also expect to go up in the similar fashion like 2.5x in the next five years. And I’m assuming that this is without any incremental acquisitions that you may do.
So is that the right understanding? Sir.
Ashish Jakhanwala
If you look at our investor day presentation we have clearly articulated in that that the total the bit accumulation in the next four to five years is expected to be in the zip code of about 3,000 three and a half thousand crore. And we’ve given the whole list of capex that we have with investable circles on top of that. So you’re absolutely right. The number is clearly 2.4 times the current revenue run rate. But that’s not a difficult thing because majority of our new inventory that is getting added is all in the upscale upper upscale space.
So today if your EBITDA per key is, sorry, revenue per key is let’s say 25 lakhs per key. In the same period the revenue per key for an upscale asset will be 50, 55 lakhs in those cities where we’ve invested our capital. So this addition of W Hyderabad in the western Bangalore, you know, some of the other assets is also helping us maintain that growth rate. So yeah, the 3,000 crore target that we have is based on two or three assumptions. The same store will grow between 9 and 11% CAGR in terms of revenue. Two, you will have incremental revenues coming from the growth initiatives that we’ve already invested in by the way, and we are fully funded in terms of current cash and future cash flows.
That takes us to the 3000. It does not envisage any new acquisition. So that’s how we add up that 3000 crores largely. Only variable in that is that assumption of 9 to 11% CAGR on same store revenue. And since we made that presentation last year, at least for 3 quarters subsequent to that, we maintained our revenue growth ahead of that.
Hitendra Pradhan
And that includes the impact of these 473 rooms which are rebranded and 1458 new addition and this 300 crore free cash flow that you have produced on a TTM basis before growth capex. So that you assume should also grow in line with revenue.
Ashish Jakhanwala
More than revenue because there’s always operating leverage. So typically if you see our revenue growth was 16%, our EBITDA growth before GST impact was 19%. Eventually you will go back to that mathematics as you kind of adjust your baseline. So, so you have seen the EBITDA growth remain in excess of the revenue growth. Then beyond that our interest cost remains flat and therefore the cash growth continues to be even higher than that. So if your revenue growth is, let’s say 14, 15%, your cash growth will be substantially higher than that because of A operating leverage and B interest cost remaining stable.
Hitendra Pradhan
Understood sir. Thank you sir, and all the best.
Ashish Jakhanwala
Thank you so much.
operator
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to the management.
Ashish Jakhanwala
Thank you everybody for a very engaging call. I would reiterate the fact that I know sometimes these small changes to the regulation distract us, but that had a 2% impact on revenue and that revenue grew at 16%. Y O yes. So we should remain steadfast focused on the fact that demand and supply continues to remain extremely favorable to the incumbent owners, operators in the sector. In India we are actually quite excited about the broader changes in the economy including rationalization of GST which is boosting local demand, local consumption. That’s the only reason we are surviving through several event risks still coming out strong.
Our core markets, what being the most humbling data to see is that in our core markets for the last nine months, the office net office absorption remains. To be extremely strong.
Ashish Jakhanwala
Bangalore is touching 12 million square feet for a nine month period. All other cities, Bombay, Hyderabad, Pune, NCR, even Chennai now is touching 6 to 7 million square feet. I think with that backdrop we remain fairly confident that our curve will remain at or ahead of a long term target. And that helps us get to at least the targeted number of 3000 crore revenue by FY30. So look forward to speaking to you again next quarter. And thank you so much for your time.
operator
Thank you very much on behalf of Saami Hotels Ltd. That concludes this conference. Thank you all for joining us today. And you may now disconnect your lines.