Thomas Cook (India) Ltd (THOMASCOOK) Q4 FY23 Earnings Concall Transcript

Thomas Cook (India) Ltd (NSE:THOMASCOOK) Q4 FY23 Earnings Concall dated May. 19, 2023.

Corporate Participants:

Madhavan Menon — Chairman & Managing Director

Debasis Nandy — President & Group Chief Financial Officer

Mahesh Iyer — Executive Director & Chief Executive Officer

Vikram Lalvani — Managing Director

Mr. K S Ramakrishnan — Managing Director

Mahesh Iyer — Chief Executing Officer

Debasis Nandy — Chief Financial Officer

Analysts:

Akul Broachwala — Equity Research Analyst

Mithun Aswath — Kivah Advisors — Analyst

Aditya Kumar — LMI — Analyst

Anushka Chitnis — Arihant Capital Markets — Analyst

Senthil Manikandan — ithoughtpms — Analyst

Shashank Pore — Crescentia STRATEGISTS — Analyst

Unidentified Participant — — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Thomas Cook India Limited 4Q FY23 Earnings Conference Call hosted by IIFL Securities Limited.

[Operator Instructions] I now hand the conference over to Mr. Akul Broachwala from IIFL Securities. Thank you and over to you, Sir.

Akul Broachwala —

Thank you, Yusuf. Ladies and gentlemen, good afternoon and thank you for joining us on the 4Q FY23 earnings conference call of Thomas Cook India Limited. I invite the Company’s Senior Management to discuss the results and business strategy. We will begin the call with opening remarks by Mr. Madhavan Menon, Managing Director, followed by management team, and thereafter, we’ll open the call for a Q&A session. I would now like to hand the call over to Mr. Menon to take proceedings forward. Thank you and over to you sir.

Madhavan Menon — Chairman & Managing Director

Thank you. Thank you. Let me thank everybody for participating on this call. Let me then start off — kick off by introducing everybody in the room from our side. I’ve got Mr. Mahesh Iyer who is the CEO of Thomas Cook India Limited. I’ve got Mr. Debasis Nandy who is the Group CFO of the Thomas Cook India group. I have got Mr. Vishal Suri, who is the CEO — MD of SOTC; Mr. Vikram Lalvani who is the MD of Sterling Resorts — Sterling Holidays; and Mr. Ramakrishnan who is the MD and CEO of DEI.

I’m pleased to report that we announced a good set of results yesterday where for the financial year ended 2023, we reported 163% increase in earning — income from operations of INR5,111 crores against which we reported an operating EBITDA of INR277 crores and an operating PBT of INR63 crores.

The performance was primarily driven by Thomas Cook who reported an operating EBITDA of INR117 crores, Sterling Holidays reporting and — at the same number as an EBITDA number. SOTC reporting a number of INR28.4 crores and DEI reporting a number of INR67.8 crores.

The primary drivers in terms of our business segments was foreign exchange, corporate travel, the incentive business, hospitality and the imaging business. All these businesses reported far better profitability than they had in the previous two years, which obviously as you are aware, were disrupted by the pandemic. If I look at a cost level — I mean from a cost and productivity level how we did this, we through the pandemic — we actually reduced our costs and in this — for the financial year ended March 23, you will see savings of 20% across the Group.

However, I just want to point out that several companies within the Group have to up clocking at 30% plus in cost savings and our intent is to sustain these cost savings in the medium to longer-term. The — so this cost rationalization. A second important point is the improved margins and if you look at our EBITDA margin for the year ended 23, it stands at 5.4% as compared to 3.6% for the similar period in February, financial year ended 2020.

Obviously, all these numbers are showing significant growth because we had losses in the previous financial year as a result of the pandemic. A third important driver was the productivity improvements that we’ve achieved through automation and digitization relating to the delivery of products to customers. This is across all our segments, not just — it’s foreign exchange which today has — delivers products both digitally as well as physically.

You’ve got leisure which does the shifting. Our internal processes also have been automated to a significant aspect. The last point I want to make is that our cash and cash equivalents stood at INR1000-odd crores which is almost the same level as our pre-COVID 2019 number.

So we are back in business. We are generating cash and I expect that in the coming quarters, we have a fair degree of visibility which I will leave to Mahesh and Debasis to address. Thank you.

Debasis Nandy — President & Group Chief Financial Officer

Thank you, Madhavan. This is Debasis. I’ll just quickly highlight the financials for the quarter and for the year before I hand over to Mahesh. So we have had a great year. The financial year ’23, our income from operations grew by 163% from INR1946 crores to INR5,111 crores. And we get into the business-by-business details of that in the course of the next half an hour or so.

Our costs remained under control as Madhavan pointed out leading to a very healthy EBITDA. If you look at our operating EBITDA and I’ll explain that in a minute. Our operating EBITDA as Madhavan pointed out was about INR277 crores. We had made a loss of INR126 crores last year but more importantly, this is even better than the pre-pandemic year of FY20.

In FY20, we made EBITDA — operating EBITDA of INR251 crores which was at a margin of about 3.6% and this year, we are — in spite of the top line not being comparable to what it was in FY20, our operating EBITDA is at 277, which is a 5.4% EBITDA margin. We keep on talking about operating EBITDA let me just explain why we qualified it. So [technical issue] in the financials which is given separately as a disclosure, which is a mark-to-market loss on investment. This is a holding that we have of shares in Quess Corp.

These shares are not held by Thomas Cook. These shares are actually held by the Thomas Cook Employee Trust which is a separate entity. However, for accounting purposes, this is clubbed as part of — as a part of this standalone and the Group. The shares held by the Trust are meant for allotment and distribution to employees over a period of time based on their [indecipherable]. So — and this cannot be used for anything else.

There has been significant change in values for the — in the price of Quess within the year leading to mark-to-market and we have to measure the impact of this on the overall value of the investment made by the Trust. So this amount works out to a reduction in value, a notional loss of INR35.3 crores.

This was only INR4 crores last year so while we have to consider that as part of EBITDA, it is — doesn’t impact operations in any way which is why we’re are making a distinction in our conversation with operating EBITDA and the reported EBITDA. As the volatility in the shares in the Quess has stabilized. This amount is will become immaterial in the — hopefully in the years to come.

And also the other factor that will influence this is as and when [indecipherable] mature, these shares will be given out to employees and therefore, we won’t do the mark-to-market valuation anymore. Coming to the reported profit at a EBIT level, we — and this is the reported EBIT at EBIT level, we generated INR117 crores against a loss of INR258 crores showing the turnaround the business has made. And at the PBT level, for consolidated business made a profit of INR26 crores and with — against a loss of INR323 crores last year. So all round improvement across. I will not take too much of time on this. The numbers are there in the investor presentation which has been circulated to you and let’s talk a little more about the business and hand over to Mahesh so that he can take you through that.

Mahesh Iyer — Executive Director & Chief Executive Officer

Thank you, Debasis, and good afternoon everyone. I will now quickly jump into the segmental numbers, and I think that’s where the business essence lies. So I’ll kind of walk you through each of the segments that we have and I’ll kind of move you through the full year that’s FY23 as well as Q4, FY23. To begin with, foreign exchange, the segment that we have had a stellar year that went by FY23.

If you look at income from operations grew almost two times from about INR110 crores to INR246 crores. That’s more than 100% growth as far as the revenue from — income from operations is concerned. If you look the same number for the quarter on a quarter-on-quarter basis moved from INR38 crores to INR65 crores.

Now if I look at the profitability for the same period, it moved from — for the full-year FY23, it moved from a loss of INR3 crores in FY22 to a profit of INR72 crores and from an income from operations point of view moved from about INR110 crores to about INR246 crores. So it’s almost doubling in terms of income from operations and almost like four times or five times in terms of profitability but the underlying trend to this performance has been a very steady comeback as far as volumes are concerned for the FY — full year FY 23, foreign exchange volumes are back to 82% of the pre-pandemic level, whereas for the quarter next Q4 of FY 23, the volumes are at 93%, so when I compare it to quarter on quarter, you have seen improvement. But as you would know that the recovery to pre pandemic in the previous quarters were lower, but for the full-year it stands at 82% and for the last quarter stands at 93%. Now when you look at recovery within the segments of foreign exchange, the retail segment is actually at–on-top of the pre pandemic level. We’re about close to 103%[phonetic] to the pre pandemic level, driven by the student segment, which is operating at about 35% higher than what it was in the pre pandemic level.

The travel-related segment of — which is a part of the retail foreign-exchange segment continues to be lagging and it’s about close to 75%, kind of trailing the kind of numbers you would see in terms of travel. If I look at the prepaid card business, which largely is reflective of the corporate movement that’s happening, our prepaid portfolio has grown by about 80% as compared to the previous quarter, comparable quarter for Q4 FY 23.

In terms of sheer volumes, we did about $81 million in Q4 of ’22 and the same volume in the current year is at $141 million. For the full-year, we are at about $550 million of prepaid card loads and I think that is one of the best that we’ve done in a very-very long-time. If I look at the float at this business, we are sitting at about close to 850 plus crores of float[phonetic], that’s there as a part of the [indecipherable] portfolio.

Again noteworthy here to mention, is the digital transformation, Madhavan spoke about the investments that we’ve made there and how it’s paying out for us. If I look at our digital adoption rate which is customers coming and doing digital transaction from us it is about 11% of our total retail portfolio. The B2B business that we conduct through the same digital route, we have about 10% adoption.

So overall, about 20% or 21% of the overall retail business. It’s actually happening through digital channels and we continue to invest in it. The recent directive from RBI in terms of e-KYC, being enabled to authorize dealers like Thomas Cook, we believe will allow us to further invest in the technology and reduce the friction that comes in completing the last mile fulfillment as far as the customers are concerned.

So clearly from a growth perspective, foreign-exchange is set well. We believe as travel happens in the next quarter, which is traditionally the largest seasonal quarter for the holiday business, we would see the recovery on the travel side of retail for foreign-exchange and that should add to the profitability going-forward.

Coming to the segment on travel and travel-related services. Obviously, there are multiple segments in that as you know, it comprises of holidays, which is B2C. We have got holidays that B2B that we call as MICE. It has got corporate travel and we have got the DMS, which is our overseas inbound business, as well as India inbound business.

Each of them as Madhavan mentioned, are in different stages of recovery and I’ll try and give you a sense of each of those verticals. To begin with, I think from a recovery point-of-view, overall recovery for the travel business stands at about 78%, this is an overall sum, which includes India inbound, overseas inbound as well as domestic international outbound.

Now, if I can take that up into each of the segments. To begin with, from corporate travel, we are already trending as we’ve been saying in the last two quarters. Corporate travel was very quick to come back. Both from a volume and value perspective, we are trending above pre pandemic. And we continue to see momentum in terms of the growth that we see in this business.

This is also on the backdrop of new acquisitions or new clients that we acquired during the quarter, and we have started to take full throttle in the current quarter. Also, important to mention here that the mix of business between international and domestic, which used to be skewed towards domestic in the previous quarter has now found balance and we are trending at similar ratios that used to be pre pandemic which is 60% to international and 40% to domestic. Though, volume-wise they are skewed 90/10, but in terms of value, international now accounts for about 60%.

Now from a field point-of-view this international traffic or international volumes argurs very well because that’s what we make our margins and clearly the comeback on that volumes will add to our bottom-line going-forward. Also to mention here that we are also doing some real Hi-tech integration in terms of technology from some — from some of our large customers, which will then eliminate the need of people-related touch for transactions as you know, these are travel management services for large corporates, again happens to be a little more people-intensive. But we are bringing in technology, which then talks to the employee self-service portal that each of the corporates have and that will kind of ease out the journey in terms of booking of tickets, booking of hotels, and more importantly, the way we invoice customers and collect payments.

So, clearly it’s an end-to-end journey, we’ve started the pilot on it with a few of our customers and we expect to continue that journey going-forward. Coming to the B2B business of MICE, which is the holidays. We’ve had a very good set of numbers, both from SOTC and Thomas Cook, the two brands that represent this business in the market. This is at the backdrop of some large wins we have had.

As you would know, we’ve been speaking about the government contracts that we’ve got. This is a new set of business segment that we have entered in the last three quarters. We manage the Khelo India Group with the Khelo India in MP. We also won the mandate for the Khelo India Games that would happen in UP, towards the end of this month.

We are also one of the three vendors who provide services on the G20 event that’s happening, including the World Tourism Council that is going to happen in Jammu and Kashmir between the 22nd May and 24th of May. So, clearly the Government business has become a sizable portion of our MICE portfolio. It’s a very profitable segment, makes us money and we kind of diversified our portfolio not only on the International side but also on the domestic side.

Also important to mention here that on the MICE[phonetic], we brought in new technologies which automates a lot of processes. More importantly because it involves dealers, [indeccipherable] and I think it’s important that the entire process of collection of documentation, processing of Visa, which all rooted towards centralized custom.

We made that customer self-service app enabled for these set of customers also, which has gotten productivity benefits on the MICE side of the business. Coming to the ledger side of the business, again from a recovery point-of-view, overall business is about close to 65% recovery. But for the current quarter, you’re seeing the recovery at close to about 69%. Now you must also keep in mind that this quarter, which is quarter that went by Q4 FY23, happens to be an investment quarter. So the volumes are strictly not comparable to the sequential-quarter, which is the December quarter.

Clearly because this quarter has the element of people not taking leaves because of exams and everything else. So we are now moving to normalcy, where we have to factor in the seasonality of the business. So this is a seasonal investment quarter, where we invest into our marketing initiatives. But despite that I am happy to report that both SOTC and Thomas Cook, on the holiday business broke-even, or actually made a marginal set of money.

So, a traditional investment quarter turned profitable for SOTC and Thomas Cook both. From a volume perspective, International travel continues to grow, the lower side of the business is beginning to come back and for the pipeline for April to June seems very strong. Europe continues to be a favorite destination. Despite the challenges on input costs and Visas and we see a very strong momentum for the European destination for the coming summers.

Last but not the least, to comment on the DMS side of it. I think, across-the-board, we’ve seen improvements. I think if I look at deferred adventures out of Middle-East, the volumes have come back. They actually reported profitability in the December quarter, the March quarter is relatively slower for them. But despite that, they came in much closer to to a breakeven as far as their overseas business is concerned.

If I look at the Southeast Asia, I think that is where the recovery has been slower, that’s purely because markets like Thailand and Bangkok opened much later during the year and the impact of China is not fully visible. As you would all know opened only in February and that impact of the business is still to come back. So we believe that both Southeast Asia, Dubai and Africa will start firing in the next quarter and we will start seeing the results of that into our businesses in the coming quarters.

Vikram, Can I hand over to you for Sterlings please?

Vikram Lalvani — Managing Director

Yeah, thanks Mahesh. Good afternoon, ladies and gentlemen, my name is Vikram Lalwani and I represent Sterling Holiday Resorts Limited as it’s Managing Director and Chief Executive Officer. I’m also joined by Mr L. Krishna Kumar, Chief Financial Officer of Sterling Holiday resorts. It’s a privilege once again to meet and interact with all of you this afternoon.

As you may recollect during the previous earnings call of 3rd Feb ’23 in Q3 FY23, I indicated that our Sterling is looking-forward to closing this financial year of FY23 with historic path-breaking numbers. I’m delighted to announce the best-ever performance of Sterling in FY23. Our turnover was close to INR370 crores and EBITDA was INR117 crores, which is at 31%[phonetic].

This is a recovery of almost 6x on EBITDA terms over pre-pandemic period precisely at about 542%[phonetic] increase. And our growth of over 20% increase over FY22. The operating free-cash flow for FY23 for the first time crossed INR100 crores with Sterling and we closed at INR113 crores, again INR58 crores of FY22. For Q4, Sterling recorded a turnover of INR89 crores and an EBITDA of INR27 crores, which is 30%. Q4 is traditionally non-seasonal quarter for leisure, but despite that, our occupancy grew by 7%, close to about 62%. Average rates also increased by about 9%, closing at our 5536[Phonetic]. This resulted in an overall revenue growth of almost 18% to 19% over the same-period last year.

For the quarter, Sterling recorded an operating free-cash flow of INR32 crores, which is about 125% growth over the same-period of the previous year. During the quarter, our Sterling also debuted two new destination, Haridwar in Uttarakhand and Chail in Himachal. And plus taking our portfolio strength to 40 resorts across 38 destinations and 2,500 keys as on 31st March 2023.

Now from a year’s perspective, what were the three most attributing factors to this change that has happened. One, our improved resort business, the spends of resorts have gone up, average room rates are up, occupancies are up and guest ratios are up. Drive for efficiencies, our membership vertical has driven a lot of efficiencies, throwing up a lot of cost efficiencies through premiumization and variabilization of cost which were otherwise fixed.

We also expanded our footprint across the country on an asset-light model, resulting in incremental revenues and new lines of businesses for the company. I shall wait to elaborate some of the key operating levers that resulted in this FY23 performance. Our volumes are healthy and we maintained an occupancy of about 66%, which is up of 55% over FY22. Our average room rate growth has been healthy — very, very healthy, 21% over the previous year. We closed at INR6268, whilst surpassing the pre pandemic levels even by 43%, pre pandemic, it was at INR4392.

Our improved volumes and average room rates resulted in Group revenues growth of almost 74%, which is INR150 crores in FY 23, from INR86 crores FY22. Improved F&B — food and beverage business by over 75% over the previous year. We closed INR79 crores in food and beverage revenues in our resorts versus INR45 crores in FY22. And this is because of improved participation to spend and add new lines of businesses in food and beverage that resulted in this growth.

The growth in guest occupancies and rates, when compared to FY22. Cost optimization exercises are also undertaking in 2020 and the cost signs continued to be maintained through FY23. In the membership business, the focus continues to driving profitable sales and maximize yield and variabilizing fixed costs. With the continuous growth of our variable model of membership sales that effects our on-site sales was at 53% in FY23, when compared to only 38% in FY22.

Higher down-payments of 48% in FY23 compared to 41% in FY22 and 30% in pre-pandemic levels. So, therefore the higher down-payments also has a direct correlation with improved operating fee and cash-flow. Strengthening the sales channels resulted in an improved average unit realization with a growth of almost 7% over the previous year. Sterling [indecipherable] witnessed in FY23, shall also have it’s positive impact in FY24.

Sales will continue to ramp up it’s Business profitability and in the most scalable manner, even while entering FY24. The pressure continued to be on leveraging growth in the resort business sustaining cost efficiencies, brought in so-far and bringing about the strategic portfolio expansion rapidly as we enter even FY24. In FY23, Sterling added six new resorts across the country, Madurai in Tamil Nadu, Kalimpong in West Bengal, Tiruvannamalai

In Tamil Nadu, Pench in Madhya Pradhesh, Chail in Himachal, and Haridwar in Uttarakhand. And we shall add-on atleast another six resorts in the first-half of FY24 all-around asset-like model.

Sterling resort is the one of the only hospitality chains to have launched a unique and proprietary distribution platform, what we called Sterling one in FY23 that enabled Sterling–our channel partners across the length and breadth of the country and employees of corporate clients to access the Sterling inventory in real time and make reservations at pre-approved rates currently.

This has enhanced our presence to 221 locations in India in FY23, without corresponding addition of any fixed costs. This also resulted in an increase in room revenues of INR28 crores in FY23 and this platform shall be further enhanced in FY24 to give even better results. Active participation in industry trade fairs, we believe in also enhancing brand presence to that effect Sterling has participated in several hospitality trade fairs before. And we will further strengthen Sterling presence in the hospitality landscape in the country.

To conclude, we are extremely upbeat and buoyant for outlook even in Q1 FY24, as well as for the remaining of the financial year. That concludes the Sterling part. May I request Mr. Ramakrishnan from DEI to come and present.

Mr. K S Ramakrishnan — Managing Director

Hi. Good evening, everyone. This is K S Ramakrishnan, I’m the CEO for DEI. Am I audible everyone?

Akul Broachwala — Equity Research Analyst

Yes, we can hear you.

Mr. K S Ramakrishnan — Managing Director

Great. So we have had a fantastic FY22-23. Like the numbers say we’ve had a double-digit growth from the previous year and it’s also been our finest and the most profitable year in the history of our existence from the beginning itself. From an Indian Rupee perspective I would put it, that, from INR474 crores in FY22, to INR810 crores in FY23, mind you, this is what has happened, keeping the fact that China, Hong-Kong and Macau was still not open for us.

As the year, it’s been extremely not only good on revenue, but also on our EBITDA and profit. We’ve had the highest profit reported in the — from all of our past performances. Again like Mahesh and others said, we’ve also had a lot of cost-control that has happened through pandemic that we continued through this process while, we also had a lot of growth happening in the existing markets that we’re operating quite a few of our competitions, folded up their business in the last two years of pandemic which we got an opportunity of picking-up at a much better price — at a much better revenue-share rate.

That made us more profitable and more revenue had a growth too. As far as the year goes, the results are very clearly showing what we’ve done. Talking about forward-looking, I think we have even more exciting and interesting three years ahead of us as our plan goes on quite a few areas.

From a growth perspective, on a revenue perspective. I think we have three geographies that we are highly focusing on growth. Saudi Arabia is opening up in a very big way, all of you must have heard about the amount of attractions and amount of tourism that Saudi Arabia has done is starting to attract in the next decade. We are ahead of the curve there, we are in–already in the most wanted RFP’s.

We’ve been inviting most number of RFPs of attractions out there. While we also secured towards the contracts for the current year itself. We have also a sizable growth plan on other accounts signed-up in the Far East. Indonesia in particular has been it’s one of our most profitable countries of operations where we have more than four odd locations opening in the next–in this quarter as we speak.

Malaysia and Maldives is another one that we’ve already opened, three and two locations and we have another half a dozen of them lined-up in the next few quarters. Along with this revenue growth in new geographies, there’s also a sizable revenue growth in existing geographies. China in March –February-March and April, we have had an outstanding April.

So the way it looks like China from unscheduled plan when we have these 2.5 times higher than what we have–what we have anticipated from a budgeting perspective. So, China has opened in a very big way, both our key partners, Shanghai Disney and Universal Studios are showing in terms of excess of 10 billion guests a year which is — which is what they were originally planned for during the pandemic it all had drop down to between two and four million. So we’ve seen a huge, huge uptake of that in China and China was a challenging country for us for the last three years of pandemic. It probably will become one of our most profitable countries in this coming year or year next. Along with that in the markets like UAE we still hold our pole position. We haven’t lost a single contract and we have been renewing every contract of ours with the exception of losing one in Abu Dhabi which our competition took over and unfortunately the first two months results, fortunately for us, and unfortunately for them doesn’t seem to be even hitting 30% [technical issue]

With all that looking good and great from a technology perspective, we also invested our time during the pandemic and post-pandemic on upgrading and relooking at our entire solution. Our technology solution for Imaging and we are now coming to the culmination of its benefits. The project is running more or less nearly on time with the anticipated billings of two months that’s still within the reach.

So we’ll be unleashing our technology solution called as Hummingbird[phonetic] by the end of third quarter and the benefits of that are going to be at least — at least 20% to 30% better up than we were, it’s also scheduled to reduce our cost on labor, but is about 10% to 12%. That would make EBIT even better. In fact, our last calendar year 2022 EBIT has already risen to about 19% from an average of 8% to 9% when Thomas Cook had acquired us. So that — with this change of Hummingbird[phonetic] we see that margins getting even more better going ahead.

Last but not the least, the Dubai balloon. Finally the balloon has gone live in March and [Technical Issues] weather has been willing. We’ve been doing extremely well. There are days when we have been having 100% occupancy on the balloon. Dubai has had bad weather for April and May. So that’s why I’m — our challenge is more on the flying of the balloon. [Technical Issues] even in our budget for the ballon were always a lower one.

So we are very excitedly looking for and [technical issue] DEI has been having a brilliant last year and a more exciting this year. The team is extremely excited about bringing in a lot more businesses than we’ve ever thought before. So, with that, I express my thanks for the patience. Thank you.

Akul Broachwala — Equity Research Analyst

Thank you. Thank you. Ram, may I request Madhavan too for the closing comment before we get into the question-answer.

Madhavan Menon — Chairman & Managing Director

I think I just want to reiterate what all of us have said that clearly, there has been a full recovery in terms of profitability from the pandemic. I believe that the upside is essentially recovering the balance which will take us beyond the pre-COVID levels both in terms of demand as well as cost benefit.

I must also add that some of our destination management companies especially in Southeast Asia as well as here in India have been relatively slow in picking up. But just looking at the order book across all our segments, it’s very evident that there is an upside from here and therefore, I believe that we can expect better results across each of the Group companies. With that, I will end there and thank you for participating.

Akul Broachwala — Equity Research Analyst

Operator, now open it up for question-and-answer.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] First question is from the line of Mithun Aswath from Kivah Advisors. Please go ahead.

Mithun Aswath — Kivah Advisors — Analyst

Yeah. I have a few questions. I just wanted to understand on the travel-related business. The EBIT margin even in the December quarter was only about 2% and this quarter it is flat, so I just wanted to understand what level of business or if we reach pre-COVID levels, I think on an annual basis you used to do around INR6,000 crores in the travel-related business. Just wanted to understand what level of profitability or EBIT can this business generate because this is the most sizable business, but does not really deliver any profitability meaningfully despite revenues being close to INR1,000 crores. Wanted to understand what are the reasons for that.

Mahesh Iyer — Chief Executing Officer

Mithun this is Mahesh here, let me take that question and I’ll get Debasis or anyone else to clarify. To begin with, I think you must understand that the segment results that you’re looking at here is a combination of multiple travel verticals here. One, as I mentioned during the course of my commentary, you have the B2C holiday business. We have the B2B holiday business, we have the Inbound business in India.

We have the inbound overseas business and we also have corporate travel business set in India. So if you look at it, it’s the sum total of multiple units or I would say companies who are all getting consolidated herein and each of them have their set of seasonality. Also you must bear in mind that when you look at the recognition of the segmental revenue versus segmental profit. They are very different. Each of the segments are accounted for very differently because in the case of corporate travel segment, you’re only taking the revenues whereas in the case of Holiday segment, you have to take the entire value of sales into the revenue. Hence if you look at the EBIT margin, it may not be the right way to look at it. Obviously, on a comparable basis, when you start comparing it year-on year, you will start seeing this flowing through but clearly for the current quarter in question, as Madhavan also mentioned and I also elaborated during the course of our conversation, different businesses are at different stages of recovery.

We expect the margins to be stabilizing or the EBIT margins on the business to be anywhere between 7% to 8% and that’s what we’ve seen. We expect that we should get there in the next quarter which is where you will see a large part of our outbound business firing in. But again, you will see the inbound business fires into the October-March quarter. So they will come back in that quarter. So you will see the seasonality element of it and clearly from a measurement point of view, it should not be sequential-quarter but it should be a quarter-on-quarter comparison. Debasis, you want to add that.

Debasis Nandy — Chief Financial Officer

Just to add to what Mahesh is saying. Traditionally, Q4 is also our — what we call our investment quarter because this is a quarter which is where we spend a lot of money on marketing ahead of the busy season which is between April and September and this also happens to be a low season as far as the most of the parts of the travel segments are concerned. So we have a — the topline remains a little depressed and the cost goes up because of the marketing spend the benefits of which actually we reap in Q1 and Q2. So as Mahesh correctly pointed out, if you look at our business quarter in sequence — quarter-wise in sequence, you may not get the right flavor, you will not get the right flavor. Let’s put it this way. It has to be a quarter-on-quarter in terms of last year versus this year because the business has very, very strong seasonality.

Mithun Aswath — Kivah Advisors — Analyst

Right. I was just trying to understand if we were to go back to pre-pandemic levels in the travel, travel-related business.

Debasis Nandy — Chief Financial Officer

Right.

Mithun Aswath — Kivah Advisors — Analyst

And we get to a normalized level of business there, what sort of EBIT could that business also generate compared to what we were generating pre-pandemic which was more than the order of maybe around 2.5% to 3%. Is there a big delta potential because last quarter you reported about 2% above INR700 crores topline. So just wanted to get a sense on that and whether you’re targeting to get back to pre-pandemic levels in FY24? Will it take a little longer?

Debasis Nandy — Chief Financial Officer

So. Quite definitely so. In fact if you look at our FY20 which is the last pre-pandemic year, our EBIT margins on the travel segment was about 2.4% for the full year, okay, we will do — we have done quite a bit of work since then in terms of automation which has led to increase in productivity and in terms of reduced reduction of our cost, cost explanation as Mahesh and Madhavan both talked about has been to the order of about 20% in — across most of our company. Now all that would give benefit as the sales starts rising. You have seen that our sales — our travel sales at overall level is still not comparable to what it was in the pre pandemic sales. For example, the total travel segment sales was INR5,742 crores in FY19-20 as opposed to about INR3,600 crores at overall say, about 65% to 70% for the full-year. Now, this number is growing and — but our margins are also as well — the margins are at a better level than — level than what it was earlier. So as we gradually inch up towards that INR5,000 crore number, you will see more-and-more profitability coming in. So I’m quite, quite confident. I do not want to give you a percentage number in terms of how much of the improvement in EBIT be. But as we are very sure that there’ll be — you’ll will see more-and-more profits coming out-of-the travel segment in FY 23–24, that’s the current financial year.

Madhavan Menon — Chairman & Managing Director

And second, just about add to what Debasis said it’s also important to note that for the year ended FY20 some of the businesses that we acquired which is overseas DMS where we were when we acquired we realized that there has to be a lot of transformation that has to happen, both for our business and cost optimization point-of-view. So all of that has taken place during the pandemic and as they come back to full-scale business, the color of that property will definitely change and will add to the segmental profits in each of the units that we operate in the country.

Mahesh Iyer — Chief Executing Officer

[indecipherable] happening already. I mean as Madhavan and later on Mahesh was saying, some of the overseas units, for example, if I have to name them, some of them Desert Ventures, which is Dubai based unit operating the Middle-East or private Safaris in East-Africa and unit that we have in the US, Allied TPro, all of them ended the year had all-time high in terms of sales and all of them, which are — all of them are loss-making in the year ’19-’20, all of them have now come back to profitability, so which have added to the overall overall group profits.

Now going forward in FY24 these varies again we expected that they will surpass the numbers they have posted last year. And therefore, if we add to the overall profitability of this segment.

Mithun Aswath — Kivah Advisors — Analyst

Okay. So, can you say fair to say that in FY24, we will reach FY20 travel-related revenue, INR3600 crores will go back to INR5,700 or is that being too optimistic? And why would be [technical issue] that especially I want to speak that since the hospitality sector overall I think in the country has bounced back quite smartly, so just wanted to understand?

Madhavan Menon — Chairman & Managing Director

No. I think–Mithun you’re almost right. We are not saying that we will not reach that — our internal estimates are that we will bounce-back. As I said, different markets operate very differently, right, like we saw expected China to open much faster did not open the way it had two. So we had some setbacks here, but clearly, if you ask me, the positioning from here to the next 12 months we definitely believe that we should surpass the pre-pandemic levels in most of the businesses that we operate in, specifically in the travel segments.

Mahesh Iyer — Chief Executing Officer

And as we said in ultimately what matters is the profitability, and even if we — for hypothetically say that we don’t reach 100% of FY20 levels in terms of top-line, it will be much easier to reach that benchmark in terms of FY20 benchmark in terms of profitability because of the improvement that we have done in productivity and cost management.

Mithun Aswath — Kivah Advisors — Analyst

Right. Just one. I have couple of more questions, that is fine. Your borrowing — your finance cost are close to INR90 crores despite having quite a large cash balance. So I just wanted to understand how much of this INR90 crores is linked to actual borrowing and can your finance cost or interest costs come down and what is your cost of borrowing?

Madhavan Menon — Chairman & Managing Director

That’s a good question actually. So, and thank you for asking that. So if I look at your interest and finance charges, the overall numbers are INR89 crores in this year as compared to roughly about INR61.6 crores last year. Now, there are three components in this, one component is the pure interest which is on loans, short and long-term and that has gone up from INR24 crores last year to INR33 crores in the current year.

And that the INR9 crore increase is largely due to the one long-term loan that we had during the year, which is where [indecipherble] scheme of the government. That’s about INR150 crores of loans that we have taken during the year. The balance is on account of two other elements to this. One element is the lease rentals, okay. So there is an interest element on new switch in terms of accounting has to be accounted — has to be classified under the interest and finance charges.

Now, that amount is about INR13 crores in 2022 and in FY23, it’s about INR12 crores, so more or less the same. So there is no change in that and that will continue to be, because we have a lot of shops and offices, which are on lease, so which will continue to the INR12 crore to INR13 crore number will continue as a base number.

We are not planning to open any new branches or shops and therefore we don’t expect any change in this number. The rest of it, which is an amount of INR43 crores in the current year and INR24 crores in the year before pertains to what we called finance charges. Now these can be various things. These can be the bank charges that we pay for all the bank guarantees that we issue. The credit card charges that you — that we have to pay for our collection when you do — when we collect payments from net banking et-cetera. There are some gateway charges that we pay.

And of course, when you do the on the foreign-exchange in the foreign exchange business we do import and export of physical currency, we call that [technical issue]. There are some bank charges relating to that, we call it export, import charges. So all of this in the financial terms are in the heading called financial charges. This went up from INR24 crores to about INR43 crores this year. This actually reflects the increase in the volume of the business, if you see in the corresponding period, our income from operations went up from INR1,888 crores in FY22 to INR5,047 crores in FY23.

And the finance charges are connected to it. So this almost tripled. The finance charges are really connected to the volume of business. Now, will this continue the same proportion, not really, because some part of this will be — will tend to, it will not move-up directly, it will move-up in proportion, but it will not be in-direct proportion. For example, the finance charge, the INR24 crores as percentage of income operations was 1.2% last year. This is now 0.8%, so we expect that this will there will be some variability and this will keep on going down as a percentage of overall number, but we cannot sort of wish[phonetic] it away.

Also, as you know, we have a significant part of the business online. So a lot of things are happening, online and consequently a lot of our collections are happening online and therefore charges like these, the bank charges will keep on coming, but I want — this is connected to the volume of the business and therefore it brings in the necessary. Does this answer your question?

Mithun Aswath — Kivah Advisors — Analyst

Yes, so. I just wanted to understand, since you have net cash. I think to the order of INR500 crores, net of the borrowing. I’m just trying to understand is your income that you earn on the extra cash where-is that going and does that more than the interest out-go. Just trying to get a sense of, why would you have borrowings of large finance cost, if you know we have surplus cash? So I just wanted to understand. And where are you utilizing that cash?

Debasis Nandy — Chief Financial Officer

So let me — let me handle that question. So our overall cash is roughly about at the group level is roughly about INR1,000 crores, as Mahesh and Madhavan have talked about. Now that lies in various different buckets, all of it is not lying as freely available cash. It also includes the float that we have on the prepaid cards. And that — that prepaid cards float can be used for various things, but it really–it will remain and we do on — we do put that in our [indecipherable] foreign currency.

So we do put part of that in our foreign currency principles and do earn some income on that. And that’s accounted for us as part of our other income. So that is that fair. Also being a business — being a forex business is one of the largest businesses, and therefore, cash also forms effectively like a — bit like a inventory. If I can call it that way, foreign-exchange business and there will always be some amount of cash lying either physically or in the form of master[phonetic] accounts et cetera. Now where is the opportunity so can — where is the opportunity of using this. Is it one is of course in paying loans. So if you look at our– if you look at the balance sheet, you will find that our short-term borrowings has come down very-very substantially in March in this -especially at Thomas Cook for most of the cash line, our short-term borrowings are at a very low-level, but we do have a INR150 crores of long-term borrowings in Thomas Cook and in one other company, which is the ECLGS which is taken for — it’s a six-year loan and therefore we can’t really prepay that.

We also have some longer-term loans in our overseas company where we use it for where we had it for some — handling some acquisitions, which is taken pre-pandemic. We are paying it off over a period of time. So that also will continue to stay. The cash-flow — the float balances can be used for various things one-way of using that obviously is to do a swap into INR and use it to manage our business better. The swap cost is always cheaper than short-term debt or [indecipherable] and we use that money to manage our interest cost.

Mithun Aswath — Kivah Advisors — Analyst

Thank you sir for all this. Just one last question on the DEI business. In the current quarter, we saw quite a dramatic fall in the EBIT compared to the December quarter despite revenues being more or less in line. So, just wanted to understand any particular reason for this fall in the profitability?

Debasis Nandy — Chief Financial Officer

Ram, may I ask you to answer that question on the quarter performance? Sorry, is he there? Okay, let me. I mean I think, Ram has dropped off on the call, but let me try and answer that question. So, in the current quarter, we saw some changes in the industry in the way the cost was structured. One major change was that, the China business, which was which is slow-moving throughout the year, dormant at times, came back from sometime in February with COVID — with problem the business came back.

So, we have substantial business in China, two major parks. One in Beijing and the other in Shanghai, Universal Studios and Disney, Shanghai, respectively. These two came back in operations. Now when it came back in operation these two typically are parks, where the — there is a — there is a share of revenue that we have to get to the park is on the higher side, higher than the normal average as compared to what we do in other parts of the world, like for example in Dubai, where most of our business located.

That increases the overall cost as a percentage of revenue. At the same time, the business towards the end of March, et cetera as summer started setting in the Dubai business also started getting affected. So between the two, there was a mismatch in cost and revenue. This will get corrected overtime, there is no need to — it’s a short-term thing which has happened for month and month and half for the balance it, but we don’t see that as an issue.

In addition, as Ram pointed out during his presentation, the balloon in Dubai had just started-off, in the month of March. So most of the as it — as the summer wanes in Dubai this business will come into full swing. And you’ll see more-and-more profits coming out of DEI.

Mr. K S Ramakrishnan — Managing Director

Sorry, just to add to Debasis point, many of the one-time costs had to be borne upfront, both in China and the balloon in March and you will see the correction and we have already seen the correction in April. So I can assure you that was only a timing issue, nothing on the debt.

Mithun Aswath — Kivah Advisors — Analyst

Thank you and all the best.

Debasis Nandy — President & Group Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Aditya Kumar from LMI. Please go-ahead.

Aditya Kumar — LMI — Analyst

Hello.

Debasis Nandy — Chief Financial Officer

Yes, Aditya.

Aditya Kumar — LMI — Analyst

Thank you for the opportunity. So, I have only one question, like on the Forex cards when a person pops up in the card then any [indecipherable] the company or the customer that comes up a little — that comes in-between when the top-up is made, and the money is used?

Mahesh Iyer — Chief Executing Officer

So, Aditya, let me take that question, Mahesh here. So clearly, we don’t have any open position, as well as prepaid product is concerned, because–let me try and walk you through a flow of a transaction. If you were to come to my counter and buy a card for $1,000 as you are going to pay me rupee equivalent for $1,000 and let’s say that rate is INR82. So you’ll give me INR82,000 and I would do a back-to-back cover for that transaction, and at the same time, the money will be transfered to a foreign currency account, which is what we call as an onshore account and [indecipherable] to the call you would have heard Debasis talking about the float balance in foreign currencies. So effectively, this goes and sits in the foreign currency account and as foreign currency balances and when we talk about float we convert that into rupee and talk about rupee balance.

Now these floats that are in foreign currency are not kept idle, but are deployed either for working capital to a swap mechanism or passing long-term FDs depending on the cycle of payment that we need to do to the merchants when the card has been used. Now at no point in time, there is any exposure on this because it’s a completely hedged transaction at every level of the transaction. I hope that clarifies.

Aditya Kumar — LMI — Analyst

Yeah, so when the transaction takes place, the price gets locked in, right.

Mahesh Iyer — Chief Executing Officer

Aditya, we follow that across-the-board all our foreign-exchange transactions are fully hedged at the origination — on consummation of the transaction.

Aditya Kumar — LMI — Analyst

Okay, well done. Thank you.

Operator

Thank you. The next question is from the line of Anushka Chitnis from Arihant Capital Markets. Please go-ahead.

Anushka Chitnis — Arihant Capital Markets — Analyst

Thank you for giving me the opportunity. I only have one question. In your Q4 consolidated statements, there is an item — other income. I mean, sorry, other expenses, about INR136 crores which is up pretty high about 15%, sequentially, and 135% annually. Can you elaborate on why that is and what the constituents that are?

Debasis Nandy — Chief Financial Officer

So. Thanks for the question. So if you look at the beginning of that itself a lot of it, as we mentioned some time back. This quarter is investment quarter that is we spend a lot of money on marketing. In anticipation of the business or rather to service the anticipated business in Q1 and Q2 of the following year. So the marketing expenses, sits in others because there is no other place to keep it in the SEBI mandated format. That’s one — that is the main reason for these expenses to go up.

We also got access to during this period, we also setup additional counters, a new counters at additional airports, details of which are given in the investor presentation and there are fixed airport rentals that kick-in from the time we start [indecipherable] counters and those have also added to the cost.

Anushka Chitnis — Arihant Capital Markets — Analyst

Got it, thank you.

Operator

Thank you. [Operator Instructions]. Next question is from the line of Senthil Manikandan ithoughtpms. Please go-ahead.

Senthil Manikandan — ithoughtpms — Analyst

Hi. Good afternoon. Just focusing from the TCS side. What’s your overall take on the TCS’s resolution by the government and the whole impact of travel business?

Debasis Nandy — Chief Financial Officer

So, Senthil again look I would think it’s a little overload in that sense, to say the impact of TCS. You must realize that it’s not 20%, because the 5% always existed. So the incremental value is only 15%, that’s point number one. Point number two, I think it’s not the cost, but it’s basically, I would say upfront payment or upfront money that’s getting blocked. And we believe a lot of segments of customers who travel with us and across the industry belong to either the MSME, SME or for that matter proprietorship and partnership, where there, is some advanced tax payments that they do. And we have an opportunity to offset this at the end of every quarter.

Thirdly I think from a diversified portfolio point-of-view that we see in our holidays business we service short-haul, we service long-haul and we service domestic. So in the in the very shortest possible time, you will see some amount of reaction, where people will want to understand how it operates and actually see the mechanism of claiming the credits working for about a quarter where the demand will probably shift to more short-haul and domestic destinations where the amount of money that one would need to block on account of this 15% will not delay and very soon which is the winters which will step in much later in the next quarter there will be normalcy returning to the market and people will see that this is only upfront costs and nothing more.

So we don’t anticipate anything much to be dramatically changing because this is available for a person to claim at the end of each quarter. So to that extent will be — it will be neutral. Also to mention here the announcement that happened on the credit card, part of it in the last 48 hours actually creates a more level-playing field for us, because that is one segment, which was outside and would have led to people actually using credit cards to make payments, which both then escaped. So clearly, I think by closing that loop and bring it under their [indecipherable] kind of closes that loop. So there is a level-playing field, and we believe it’s going to be that much growth because the appetite for customer and travel has not changed. If you were to use the word revenge travel people are traveling and I don’t think it was five or 20, it’s going to change because when five happened in October of 2020, we saw a similar bit of flurry and sentiments in the market, in a quarters period, which is about three months. We saw people accepting this. So we don’t expect too much of things to change in the marketplace.

Senthil Manikandan — ithoughtpms — Analyst

Second question is in the DMS entities. So if you can, provide what could be our overall operating profit that we generated last year, pre pandemic level, what would be our expectation going-forward at times of I think with respect to DMS entities?

Debasis Nandy — Chief Financial Officer

So on the DMS entities see pre-pandemic, which is a year ’19-’20, as you mentioned that almost all of them were picking where, we had got them, just to go back a bit. We have got them in the year FY18. And we bought them at a very, very low-value. Primarily because of the fact that they were making — they were making losses. That is the reason they were getting sold in many case.

So our immediate task was to take them over and turn them around through this structure through some amount of restructuring and automation. We got interrupted a bit by COVID but we achieved that during the COVID period and now they are there, they have reached a level of automation and which is why we are — which is where the productivity is much more. The markets which has opened up early, like for example, Dubai or Middle-East, Africa, and USA, they must be already logging in profits.

The market we opened up later, Thailand, Indonesia, Vietnam and so on and so forth, which is the Asian market they are still feeling losses but they are expected to recover and start becoming profitable in ’23 ’24. So, in short, we expect the US businesses as a group to be completely profitable. And going forward, the other part of DMS so the inbound business that is there in India, which is hosted on a company called travel corporation of India or TCI. Now, TCI was not in operation for about two years to 2.5 years during COVID, it just started operation sometime in November.

This quarter, the Q4 has been a profitable quarter for them. Although they are only about 40% of the pre COVID volumes, which is expected because this was affecting the first full quarter they had. Going-forward their volumes will start going back to where they were. At the overall margin level I think the operating margin level the inbound businesses whether in India or abroad are on something like about the gross margins in the range of over 16%, which is a decent gross margin.

One area where we have — where we are making — we are making some additional margin was on the ACIS scheme that the government had floated and which was valued till about 2021, where some sort of a subsidy if I may call that was being given for [indecipherable] unfortunately that scheme is now being suspended, is more longer there. So that would reduce the profitability of the Indian unit, however, that will be more than made-up by the the profit of the overseas units.

Senthil Manikandan — ithoughtpms — Analyst

Great, thanks. And then just one suggestion. I think in the presentation, if you can provide going-forward more details, picked-up on the DMS entity within the travel segment?

Debasis Nandy — Chief Financial Officer

We will work towards that. Thank you for the feedback.

Senthil Manikandan — ithoughtpms — Analyst

Thanks. Thanks for the opportunity.

Debasis Nandy — Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Shashank from Crescentia STRATEGISTS. Please go-ahead.

Shashank Pore — Crescentia STRATEGISTS — Analyst

Yeah. My question is regarding Sterling resorts. I wanted to understand, first thing is that, how do we compare our sales with the absolute member numbers as compared to the competition, which is also listed space. And the second subsequent point, to the same is that. How do we on the occupancy of the rooms, because we are much below in terms of occupancy? And is it compatible to pre pandemic or how do we have to look at the numbers, there also we are much below the expected as of the competition is concerned?

Debasis Nandy — President & Group Chief Financial Officer

Vikram?

Vikram Lalvani — Managing Director

Yeah, I’m just taking that. So, let me just answer the first part of the question, Sterling has adopted a hybrid model of operation and in our case, what happens is based on how the market — how the market scenario is moving we have that flexibility to optimize the team, the result of the membership, number-one.

Number two, we have terms of our total number of members, approximately about 80,000 members since the inception of Sterling in 1986, of which about 33,000 up to 35,000, are actively holidaying with us, number two.

Number three, even as an approach going-forward. Our approach is very clear in terms of premiumization of these membership that means I’m not chasing volumes, I’m not chasing units, I’m not chasing numbers. But I’m chasing them effectively and profitably. So that they stick with us for the time duration. For example I had mentioned that down payments are up. So when a person has paid you a down payment of 70%, 80%, the ability for that person to speak is wrong.

Number two. Realization, we are actually giving those customers a better experience, both at [indecipherable] as well as to an end-to-end cycle and we will continue to strike that and number three is that is a far more profitable way of doing business rather than actually chasing in terms of number of units. So our approach is very clear. We will continue to premiumize the membership business and optimize between the segments that we — we’ve done so and which is why we’ve seen you know a 6/6[phonetic] kind of a change even before pre pandemic. That’s number-one.

Number two, as far as the occupancy is concerned, the occupancy in our FY ’19-’20 was about 64% and what we’ve actually closed with is 61%. So there is an opportunity in the overall occupancy. But having said that, we also measure the guest ratio. Our guest ratio has actually gone up, which has a direct significant impact on the turnover.

So the guest ratios, which were typically about 35% to 40% pre pandemic has gone up to 60% to 65%. Over 60% to 63% in the current financial year. So there is a chance to optimize that even further. Number three, leisure business is highly seasonal, so months like July-August, Jan-Feb are extremely low month, the month of April and May, are extremely high margin.

So therefore even in the past and sometimes we also do face situations where some destinations are cut-off because of heavy rain. It has happened in Kerala before it has happened in the Himachal before. So during those times, we are not able to actually fill-up the inventory. So as a result, if you look at it from a pure leisure business I think 60% to 65% is a good scope, can be optimized to at least 65% to 68%, yes, it can be optimized [technical issue] and that’s what we are also working towards. We are seeing an upward trajectory there as well. We balance out the occupancies and we yield under rates[phonetic]. So to ensure that we actually maximize revenues is a [indecipherable] I hope that answers your question.

Shashank Pore — Crescentia STRATEGISTS — Analyst

Yeah, to a certain extent, so again the last question is that, now how do we compare with as what you’ve been telling for last couple of minutes that premiumization is the core for your business is concerned. So again, coming back to the question, the profitability of your unit as compared to the peer, is it much better because what I understand is it is not. So how do you explain that particular thing when you’re doing all the steps which you have spoken out still the profitability as compared to the listed peer are not there?

Vikram Lalvani — Managing Director

On the membership profitability alone, if you look, ours is a blended business. We have resorts which are generating around 35% operating margins and we have membership business also with general set of margin. The membership margins are marginally higher than the resort business and therefore we are profitable as far as membership is concerned and much more than the resort vertical, but on a lower-value scale.

So that’s definitely to be noted. And in terms of base, I think we have a smaller base than compared to our peer members. I think our peer members have larger base therefore the new AAC, ASF correction for them would be much on a larger-scale and therefore are not directly comparable as far as that is concerned.

Unidentified Participant — — Analyst

This is Krishna Kumar from Sterling. Another point to note on the occupancy is something which I want to add towards which I had mentioned is for the pre pandemic to the current year we also added resorts and rooms. I mean, so we actually added around 50,000 room nights over the period of three years and those have come up in hill stations and various other locations.

And occupancy is also catching up and while we are reporting a 16+ from our occupancy over the year, there are months in the year — for previous year where we also touched 75% beyond. And on the weekends, we also do 100% capacity in many of the weekends in the April, May, June months also. That’s something I want to add to what Vikram already mentioned.

Shashank Pore — Crescentia STRATEGISTS — Analyst

Thank you. Thank you.

Debasis Nandy — Chief Financial Officer

Thanks a lot.

Madhavan Menon — Chairman & Managing Director

Thank you very much Akul. Probably, we overstepped the time limit, so I don’t see any more questions coming up. Maybe you can close now. Hello Akul. Are you there?

Akul Broachwala — Equity Research Analyst

Yeah, we can. We can close the call. Thank you so much for the management. Madhavan, you would like to say something as a closing remark.

Madhavan Menon — Chairman & Managing Director

Thank you everybody for joining the conference. If there are any more clarifications, please reach out to Debasis Nandy. His numbers are available or email address and we will happily respond to any queries that you may have or direct it to whichever companies you may have questions relating to that. Thank you very much.

Operator

[Operator Closing Remarks]