Chalet Hotels Limited — Call Transcript 2021

Aug 20, 2021

August 20, 2021

National Stock Exchange of India Limited Exchange Plaza Sandra Kurla Complex, Sandra (East), Mumbai 400 051. Scrip Code~ CHALET

BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001. Scrip Code: 542399

Dear Sir/ Madam,

Subject: Transcript of the Earnings Call in respect of the Unaudited Financial Results for the quarter ended June 30, 2021

Pursuant to Regulation 30 read with Para A of Part A of Schedule Ill of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), please find attached herewith the transcript of the Earnings Call held by the Company in respect of the Unaudited Financial Results for the quarter ended June 30, 2021.

Further, pursuant to the provisions of Regulation 46 of the Listing Regulations, the aforesaid transcript will also be disclosed on the website of the Company i.e. www.chalethotels.com.

Request you to take the same on record.

Thanking You.

Yours faithfully, For Chalet Hotels Limited

Company Secretary & Compliance Officer

Encl.: A/a

Chris~ tabelle Baptista ,4

Chalet Hotels Limited (Formerly Chalet Hotels Pvt. Ltd.)

Regd. Off. : Raheja Tower, Plot No.C-30, Block 'G', Next to Bank of Baroda, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. Phone: +91-22-2656 4000 Fax: +91-22-2656 5451 Website: www.chalethotels.com CIN: U55101MH1986PLC038538

"Chalet Hotels Limited Q1 FY2022 Earnings Conference Call"

August 11, 2021

MANAGEMENT: MR. SANJAY SETHI – MANAGING DIRECTOR & CEO MR. MILIND WADEKAR – CFO MS. RUCHI RUDRA – BUSINESS STRATEGY & INVESTOR RELATIONS

• Moderator: Ladies and gentlemen good day and welcome to the Q1 FY2022 Earnings Conference Call of Chalet Hotels Limited. As a reminder all participant lines will be in 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 "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Ruchi Rudra. Thank you and over to you Madam!
• Ruchi Rudra: Good Morning, ladies and gentlemen. Welcome to Q1 FY2022 performance call for Chalet Hotels Limited. We have with us Mr. Sanjay Sethi, the Managing Director & CEO and Mr. Milind Wadekar, our CFO to take you through the performance and respond to your queries. Let me make the usual disclaimer on forward-looking statements and rounding of numbers. Kindly refer to our presentation, which has been made available on the Stock Exchanges and on our website for the details of the same. I now hand over the line to Mr. Sethi to share his opening remarks.
• Sanjay Sethi: Thank you Ruchi. Good morning everyone, hope all of you are safe and doing well. As you are aware the second wave swept the nation and impacted businesses in Q1 of this year. The restrictions brought many cities to a standstill and hospitality business was hit hard. On a positive side we have seen a flattening of the curve in June reflecting well on the business. At the onset of the second wave in March 2021 the state of Maharashtra imposed full lockdown from April 4, 2021 till June 7, 2021 literally impacting two thirds of the quarter. Similar lockdowns were witnessed in Karnataka and Telangana also. There has been a phased opening in these states, Hyderabad has opened up a lot quicker, Maharashtra has been slow to open up, and still has restrictions till 4 pm.

Now for some good news, the month of June and July saw improving consumer sentiments with sharp pickup in business and leisure segments. We see a similar trend for the month of August, the ramp up in occupancies were stronger post the second wave as compared to the first wave indicative of resilience of travel and confidence of the travelers.

US have 50% and UK 58% of its total population vaccinated, both are key source geographies for Chalet. The European Union, Middle East and several other geographies have opened their countries for tourism for fully vaccinated travelers under the vaccine passport initiative. Some of the top global companies have announced back to office plans and several of them have also announced reopening days. For our overall portfolio April occupancies were 36%, May had a steep drop to 23% occupancies; however, June saw a smart recovery at 47% occupancy. The month of July continue to follow the trend with portfolio occupancies at 54%. The month of July has actually recorded highest revenue, occupancy and RevPAR since the pandemic started. Business continues to come from the segments of Bollywood shows, IPL, and social functions and now banking, financial services and project related businesses are showing a strong shoots of recovery. The restrictions on dine in services and banquet impacted the performance of food and

beverage. Contribution from F&B segment was 131 million for Q1 against 273 million for the previous quarter.

On the P&L front in Q1 we received a rebate from one of our operators on some past disputed liability of 37 million on reimbursements, excluding this the revenue for the quarter was 715 million higher 21% year-on-year. Milind will take you through some of the details later. Our cost control measures since the beginning of the pandemic have kept the fixed cost 46% lower as compared to the pre-COVID comparable quarter of Q1 FY2020. For the hospitality division variable costs are in line with revenue levels and were down by around 70% for the quarter. Our staff to room ratio a key metric for hospitality further improved to 0.7 as of June 2021 from 0.74 as of March 2021 on improved efficiencies at our hotels. We report all employees including those on contract and outsource services for this calculation. Utility cost at absolute level was down by 11% sequentially for hospitality in Q1 FY2022 while maintaining the unit wise consumption efficiency on a per room basis. Reported EBITDA for the quarter was negative 31 million this however includes a onetime charge of 94 million for interest payable on cancelation to six flat owners who have decided not to continue with the Koramangala project, as you know these cancelations are funded by the promoters on a cash flow front and we can elaborate this further in the Q&A session. Adjusted for this and the rebate from our operator the EBITDA for the quarter was 25 million as against 51 million reported in the preceding quarter. On the non-hotel assets rentals from our commercial tenants were stable for the quarter, we have as I had mentioned earlier given some relief on CAM and parking area charges that continues for this quarter also.

The Inorbit Mall in Bengaluru was closed for the months of May and June because of the restrictions in the city impacting the mall's performance. The repurposing of the space at Sahar Mumbai is underway with majority of the area being converted to commercial offices; select F&B outlets will continue to operate providing the necessary F&B to the office occupants. On the growth pipeline the two commercial development projects are progressing well and in line with the timeline shared in our previous call. We continue to evaluate demand dynamics to assess the opening of the new hotel in Hyderabad, expansion of capacity in Pune and the rebranding of the Powai hotel.

Our mission to go green at the company is gathering further momentum since our last update on EV100 which focuses on accelerating transition to electric vehicles we are now committing to EP100 on energy productivity and RE100 on renewable energy. Our applications have been submitted and are under consideration with the Climate Group. I would also like to update you that we have started the process of application for the Dow Jones Sustainability Index or DJSI as it is known on the ranking on ESG parameters. I am also very happy to share that Chalet received the sixth rank in great places to work in mid segment companies in India this is 10 notches higher than the previous ranking last year. In addition Chalet Hotels has also been ranked 40th in the best places to work in Asia in similar category, these recognitions reinforce the power of strong human resource practices at Chalet Hotels.

Ladies and gentlemen whilst we have had a longish rough patch the strategic mix of our asset classes in our portfolio has and will hold us well in the coming years. Chalet also has significant value that can be unlocked from its existing balance sheet and we look forward to discussing the same in the near future. Now please do join me in congratulating Milind who has been promoted to the position of CFO of Chalet Hotels and I hand over the proceedings to Milind now to take you through some of the key financials.

Milind Wadekar: Thank you Sanjay. Good morning ladies and gentlemen. The first quarter of this year started in the midst of second wave, with resurfacing of lockdowns and our performance reflect the same. Reported revenue for the quarter was 753 million which includes a rebate received from an operating partner of Rs.37 million for past disputed liabilities. Adjusted for this the revenue was at 715 million for the quarter which was sequentially down by 30%. EBITDA for the quarter was negative 31 million which additionally included Rs.94 million on account of interest on cancelation of six flats in Koramangala. Adjusting for these rebates EBITDA for Q1 was positive of Rs.25 million. PBT post charges on depreciation and interest for the company were negative of 638 million as against negative of 475 million in the sequential quarter of Q4. After taking credit for deferred tax asset of 275 million losses after tax was at Rs.363 million. The hospitality segment contributed 66% of the total revenue of the company in Q1 FY2021. Occupancy for the quarter averaged at 36% lower by 3% point sequentially largely due to drop in occupancy in the month of May. The RevPAR for the same period was at Rs.1252 as against Rs.1610. On a yearon-year comparison occupancy is up 12% point and the RevPAR is up 35%. Adjusted for the rebate the revenue for hospitality was Rs.462 million in the quarter as against 724 million in Q4 and Rs.312 million in Q1 of last year. EBITDA loss adjusted for rebate was at Rs.99 million against profit of 19 million in Q4 and loss of 145 million in Q1 of the previous year.

On the cost front we continue to maintain lower fixed and variable cost compared to our pre-COVID performance. Fixed cost was lower by approximately 46% and variable costs were lower by 70% as compared to pre-COVID Q1 of FY2020. The variable costs are expected to rationalize as operations scale up whereas our strategic initiatives on cost will keep the variable cost contribution lower than traditional levels.

On retail and commercial front we have received steady rental income from commercial asset and the revenue and EBITDA from retail and commercial segment was at 233 million and Rs.191 million for the quarter respectively. As mentioned by Sanjay Inorbit Mall at Bengaluru was closed due to lockdown for two months and we are currently in the process of repurposing The Orb at Sahar and hence the contribution from retail operations has been lower for the quarter. With the conversion of large part of The Orb at Sahar to commercial office space we will be hedging the portfolio of quarter. The new setup is likely to be EBITDA and return ratios accretive. Net debt of the company as on June 30, 2021 was at 1954 Crores as against 1871 Crores a total increase of around 83 Crores in the period. The capex spend during the same period was 34 Crores. Our cash burn that is EBITDA less finance cost for Q1 FY2021 has been 39 Crores led by prudent cash flows and working capital management. The average cost of rupee loan is now at 7.92% as against 8.04% at the beginning of the year. The cost of all loans is in the

range of 8%. We have cash and cash equivalent as of June 2021 of Rs.77 Crores and Rs.780 Crores available lines of credit for general corporate purpose and our planned capex.

There has been no new subscription from promoters on zero percent nonconvertible redeemable preference shares for funding the outflow relating to residential project at Koramangala during the period under review. Since we have recommenced negotiations with the flat owners for a new plan a majority of existing owners barring nine have consented to continue with the project. Of these six customers have exited from the project and payments have been made. While the remaining three customers have expressed their desire to exit however final exit documents are awaited. We are awaiting final clearances from regulatory authorities and court to recommence work at site a suitable announcement will be made for the same once the approvals are in place. With this we will now open the floor to questions.

Moderator: Thank you very much. We will now begin with the question and answer session. The first question is from the line of Aditya Bagul from Axis Capital. Please go ahead.

• Aditya Bagul: Congratulations to the entire team at Chalet for a reasonable performance amidst really challenging times and congratulations Milind Sir on the promotion. Sir I have three questions, firstly Sanjay if you can help me understand a little more in terms of texture of our occupancy, you did allude to improvements across the board in our customer set, but if you can give us a little more texture in terms of how do you see the corporate shaping up over the next three to four months and if we have got any learnings from our Marriott and other brand partners from how international travel is likely to play out over the next 6 to 12 months that would be helpful that is my question number one, my question number two is it is actually in terms of our employee to room ratio we have done a spectacular job there, but assuming that we were to go back to let us say 70% occupancy what would be a steady state number there I also have a third question but I will come back?
• Sanjay Sethi: Thank you Aditya and it is always a pleasure to speak with you. Overall the state of travel is still in a state of flux and therefore a lot of the business that we are getting right now is business that is being created out of opportunities in the current environment. The good part is that we have been able to capitalize on those opportunities well and have been able to report high occupancies. To answer your question specifically on the business travel I think everyone here on this call will know that, that is still no way near normalcy right now and if you were to open up or look at the DGCA site on passenger loads on aircrafts you realize that we are still at about 30% of the same period 2019 numbers and that is not a great sign, but what we are looking at is the pace of future bookings. Second, we are looking at what is happening in various companies and industries. On the industries front we see hiring patterns to be encouraging, on the companies front as I mentioned earlier we see announcements of back to work happening and finally on the health front the vaccination that is happening on the ground in India and elsewhere in the world is encouraging. Today India has 400 million people who have received the first dose, over 113 million have received the second dose and with approximately 5.5 million to 6 million people getting vaccinated every day this should ramp up fairly quickly and we are still awaiting the final

on ground execution of the new vaccines. The movement was three or four new vaccines come into play this vaccination pace should at least double. Overall our view is that the domestic business travel will be back in Q3 to at least 50% to 60% of pre-COVID numbers, international travel however will probably have a lag of a couple of quarters after that. Currently roughly around 15% to 20% or maybe 20% to 25% of our business comes from business travel and I am saying this from the numbers that I see here that 15% of the in-house residence in Q1 for us were foreigners, clearly they are not here for leisure travel they are here for work so if we have 15% coming out of foreigners you can add another 10% to 12% from domestic business travelers roughly between 25% to 30% of the rooms that we have done are coming now from business travel. We have taken a few flights in the recent weeks my colleagues had done that we are now for the first time seeing on the aircrafts very obvious business travelers on the aircraft which indicate business travel is back. Finally, I think there were two points of business travel one was the companies were not ready to take the risk but then companies were not ready to even call them back to work. Back to work is happening, travel the one bottleneck was the scare about breathing common air on an aircraft I think the airline industries done a fabulous job of making people comfortable that they have it all under control so that fear is largely out of people's mind. Rooms in any case were never the problem because the air conditioning in rooms in hotels is individual there is no cross or transfer of the air from one room to the other so with all that in place and largely the WHO recommendation that the transmission through surfaces is almost negligible has given a lot of comfort for people to travel and if people can travel in large volumes for leisure well the need for business travel arises there is no reason why they want to travel for business too. Coming to your second question employee to room ratio on a steady count we believe that when we hit back that 75% occupancies that Chalet was at in the pre-COVID period we should be back to at a highest of 0.9 employees to a room. As a reference we were 1.22 when we listed the company we had come down to a little over 1.1 pre pandemic our target that time was one employee to a room, our fresh target on normalized basis is 0.9 employees to a room and when I say 0.9 I want to emphasize this includes contract employees, fixed term contracts, outsource employees, all of them, this is not just permanent employees.

• Aditya Bagul: Sanjay I think that is a commendable job in terms of efficiency that we have done not only in terms of our employees but also in terms of our fixed cost. The last question that I had was on our Koramangala project this has been in limbo ever since our IPO I just wanted to get a status update how do we see the pickup in that project, any timelines that you would like to share or at the time of an IPO there were various discussions that we did in terms of what kind of eventual NPV Chalet would realize if there are any indications that you can share that would be very helpful?
• Sanjay Sethi: Aditya I cannot give you information that is unannounced in the general and public domain as of now, but what I can share with you is the progress on the Koramangala side. There were three or four hurdles to this Koramangala project one was that HAL has withdrawn its approval, second was because of that we were not getting the approvals to build, third was if we went with 10 storeys only there were a certain number of buyers who were above the 10th floor who we needed to move to the lower floors, so let me take you through one-by-one what has happened till

now. The fire NOC has been received, the 92 flat owners that were there and I think Milind touched on it a little earlier out of the 92 flat owners 83 have confirmed that they will continue and out of those who were on higher floors has accepted the floors below the 10th level or at 10th and signed MOUs with us. This has allowed us now to go to the courts and HAL that we have an agreement between the buyers and us to cap this project at 10 storeys and we have presented a draft compromise document to HAL it has gone through two stages of approval at their end and the final committee meeting has been expected in the near future. Once that comes through, the process is very simple, we take it to court and we say that both parties have agreed to what is in the document there and we apply then for the final approvals through BBMP. The HAL draft approval and the subsequent submission to the court are imminent now. I cannot give you specific timelines because there is a third party involved which has to deliver the next step but it is not months anymore it is probably weeks or days now. Second part of your question was around the financials, the financials hold well. Milind will now give you some numbers in terms of what is the project size and then you can extrapolate that in your working if you want.

• Milind Wadekar: Aditya we cannot give you NPV it depends on many variables but we would like to give you some data points. Now this is going to be 12 building project up to 10 floors, two buildings with 11 floors and total area of around 8.5 lakhs sq.ft. Out of 8.5 lakhs, 2.8 lakh square feet is sold to existing, flat owners who are the 83 flat owners so balance salable area is around 5.7 lakh square feet. The rate in that area is around 12,500, we are planning to put 1.5 lakh square feet commercial project for strata sale will be build to sale and the cost estimated to complete this project including commercial will be in the range of 425 to 450 Crores.
• Sanjay Sethi: Just repeat it is 425 to 450 Crores of cost to complete the project and roughly I think you might want to give the number of apartments that are still pending now.

Milind Wadekar: 238 apartments to be sold so we have total 321 apartments 83 are sold.

Sanjay Sethi: Aditya let me close this by the final comment that this is certainly going to be a value accretive project and as I explained in my opening statement also Chalet has opportunity on its own balance sheet which can be unlocked to create significant value for the years ahead this is one of those and we have some more which we can talk about later. Thank you Aditya.

Aditya Bagul: Thank you.

Moderator: Thank you. The next question is from the line of Vikas Ahuja from Antique Stock Broking. Please go ahead.

Vikas Ahuja: I have couple of questions number one in the presentation you have highlighted that during the post second wave in the month of June the occupancies jump to 47% and it is more than 50% in July and maybe in early August do we think that 50 plus occupancy levels will gradually improve provide there is no third wave and also how was the ADR overall and in June and July versus maybe 3500 for the whole quarter Q1?

• Sanjay Sethi: Thank you Vikas. Yes you are right in your assessment that the occupancies are now reaching sort for a steady state situation. The third wave is expected and your guess is as good as mine so I would not hazard a guess right now in that one. I think we are as a nation better prepared for it, if it does come by. Mumbai as you know, Maharashtra as a whole has been extremely cautious on the opening up on account of the anticipated third wave and even if it comes I am saying it is a matter of one or two months now for even that to come and go so I do not see a mid or long-term impact of COVID post that I think we will be able to retain occupancy I think it is important to also notice that the ramp up post the second wave has been a lot sharper than the ramp up post the first wave that is one. On your question on the average room rate I did say that when I answered the earlier question, that our teams have been extremely efficient in picking up the special purpose businesses group businesses that was available in the market and the occupancy in some of our hotels have now hit pretty high numbers and if you were to look at individual hotel occupancies in the recent months there are at least now two or three hotels which are now exceeding 50% by a big margin I do not want to say anything more than that because we have not given that as an open disclosure elsewhere especially for July and August. The ADRs have obviously been muted as a result, they are hovering around the Rs.4000 mark but the RevPAR are now comfortably over Rs.2000 and in July when we crossed over to roughly around 2100 RevPAR it was the highest we have had since March 2020, August as of now is actually better than July.
• Vikas Ahuja: Secondly on this staff to room ratio which has come down to 0.7 and you just told us that it may go up to 0.9 that is more of a normalized number but are we also working on the pyramid like by hiring more freshers or less experienced people to reduce the overall employee count?
• Sanjay Sethi: So to answer your question right now there is not too much of hiring I think very few it is a handful of numbers that we would have hired in the last three months, but as we go down to ramp up our numbers when there is demand required us too clearly we will be looking at a younger more contemporary workforce in Chalet which is the values are lined with current times and the Chalet's values.
• Vikas Ahuja: Overall in terms of savings would be much better than the…
• Sanjay Sethi: Cost to companies have been low.
• Vikas Ahuja: I know you have answered this earlier to Aditya but just want to come back to corporate side bookings again any early feedbacks you are getting from them in terms of the pricing or with the contract because clearly many of the corporates are now guiding for travel spends is coming back gradually from second half because many of the sales guys will start traveling and you have highlighted that hiring has been very, very strong in most of the sectors especially IT and consulting any kind of a feedback you can provide us when you are talking to those customers how they are looking at in terms of pricing are they asking for huge discounts right now just trying to capitalize on the situation, any of the feedback and last question is for Milind, Milind if

you can just help us with any kind of a guidance on debt for FY2022-2023 how it is going to move? Thanks. That is all.

Sanjay Sethi: Vikas clearly the rates are muted right now and even if there is a corporate rate which has been accepted and signed off by a corporate traveler and if your rates online are lower they will take advantage of that. So right now there is no resistance to rate contracts because rate contracts have this clause that they can choose the rate contract or what we call the best available rate for the day that they see on our website. They have the option of doing both so therefore the rates we have not seen any specific guidelines from our clients. Corporate whilst we say 15% of our guests in the last quarter were foreigners we have not really had new RFPs signed with foreign companies because they still have not firmed up their dates of travel and that the big factor is India has really not announced opening up for visa as yet, so people around the world are not really able to plan travel because India has not open up travel for regular business or leisure tourists from inbound from other countries as yet. Once India announces that, we will then see a significant traction on foreign business travel this is something that we have been following up with the government that even if we cannot do it immediately why not announce an advance date like UK did and it worked brilliantly for UK actually and so let us see if that happens it will be definitely helpful, but no resistance on the rates purely because today your best available rates online are very reasonable so people are opting for that rate. One more data point on foreign traveler in Q4 last year to Q1 this year the growth on foreign guests in our hotels is up by 61%.

Milind Wadekar: So Vikas on debt front today we are at 1950 Crores and our debt will peak at around 2500 Crores in FY2023 and we have planned capex of around 850 Crores spread over next two-and-a-half years out of the 850 Crores a major part is for commercial of around 650 Crores and Rs.200 Crores is for hotels, again hotel capex will depend on micro market conditions of the respective hotels Pune and Hyderabad so from 1900 to 2500 in FY2023 and FY2022 will depend on the capex which we incurred in the balance part of the year.

• Sanjay Sethi: That is very important to look at what our debt profile is you would actually divide that into growth capital driven debt and regular non-growth capital driven debt you will find a majority of the debt on our books is actually growth driven and that is an important factor for all of us to sort of recognize which will then start getting monetized over the next few months to the next three years now, so the ramp up and opening of the two office buildings, Hyderabad hotel, the expansion in Pune, the rebranding of the Powai hotel and Koramangala for example all this will show very short return. Koramangala is largely going to be funded through sales so that may not have any significant impact except the initial one or two months on the debt side and that will be very small.
• Milind Wadekar: So Vikas we do not want to give forward looking numbers but if you look at our operating cash funding for the current quarter which is around Rs.36 Crores, as occupancy pickup and we have steady income and EBITDA from retail and commercial we expect that operating cash funding will reduce on quarter-on-quarter basis and that will be reflected in our debt, as Sanjay has mentioned that whatever incremental debt will be only for growth.

Sanjay Sethi:	May I just add to that when Milind says operation cash funds it is including interest cost that isnot at operating level EBITDA positive is given we are talking about post interest cost.
Vikas Ahuja:	Sure Sir I was just trying to see if there is any deviation from guidance in last quarter this is veryhelpful. Thanks.

Sanjay Sethi: It is actually very much in track, if anything I think we should be able to do better because the numbers are looking better and I think Koramangala is a big move forward for us.

Vikas Ahuja: Sure Sir. Best of luck thanks a lot.

Moderator: Thank you. The next question is from the line of Karan Khanna from Ambit Capital. Please go ahead.

• Karan Khanna: Sir firstly when you talk about the occupancy of 54% in July will it be fair to assume that this was largely driven by MMR or is it possible to get some flavor in terms of what sort of occupancies and what sort of growth are you seeing in Bengaluru and Hyderabad and as a followup to this question since June we have seen a sharper recovery across the leading hotels assuming there is no set of another lockdown is it fair to assume that the exit occupancies by end FY2022 should be similar to what it was before the pandemic started and also what is your take on the ADR recovery because of this?
• Sanjay Sethi: Sorry I missed the second part of the question could you just repeat that please?

Karan Khanna: I was saying that given that we have seen a fairly sharper recovery since June across hotel sales assuming there is no threat of another lockdown how should one think about the exit occupancies by end FY2022 and relatively what is your take on the ADR recovery because of this?

Sanjay Sethi: On the first part of your question about occupancies that whether this is largely driven by MMR yes MMR had a larger impact than any other place on the overall growth, but Pune has done well, we see Hyderabad picking up pretty well, Bengaluru has been a little bit of a challenge for us because the Whitefield, Sarjapur outer ring road market is completely dry because IT, ITES companies have really not started coming to work and not traveling for business too much, but that will open up soon we have confident of that. To give you a reference and this is July occupancy right so Novotel Pune was at 64, Four Points Sheraton 55, JW Marriott Sahar 77, Renaissance and Marriott Executive Apartments combine together 53%, Westin has started claiming up rapidly in July at 46%, and Bengaluru still struggled at 28%. So besides Bengaluru which actually tracked the blended occupancy now almost everyone is climbing up fairly well. We are very happy with the performance of occupancies at JW Sahar, Four Points, Novotel and Marriot Executive Apartment which is in the 70s.

Karan Khanna: Second question on how should one think about the exit occupancies in FY2022?

Sanjay Sethi: I am not going to be able to give you forward looking numbers on that.

• Karan Khanna: Sure no worries. Secondly on the retail portfolio now you have been looking to restrategize the Inorbit Mall can you help us understand how has the recovery been here since the opening post the COVID second wave and what kind of rentals we have offered to your retail tenants?
• Milind Wadekar: Post first wave opening the footfalls increase and we could recover the cost and last two months Inorbit Bengaluru Mall is almost closed and retailers have been asking for waivers on CAM as well as on rentals so we are negotiating on case-to-case basis but we have recovered the cost and there was loss of around 3 million at EBITDA level that is for the quarter.
• Sanjay Sethi: But I think July would be slightly better we do not have the numbers handy right now to give you that and we will come back to you if there is any further input and just trying to answer this Inorbit Bengaluru I think there is an opportunity to set that asset in a different way so maybe we need to skin that cat a little differently and get an optimized value creation out of that particular asset so we will study more opportunity and the multiplexes are on hold, cinemas are not allowed to open, with all in play we have got to have a long-term view on this one, we are considering all options we will come back to you when we have something from Inorbit.
• Karan Khanna: That is it from my end thanks and all the best.
• Moderator: Thank you. As there are no further questions I would now like to hand the conference over to Mr. Sanjay Sethi for closing comments.
• Sanjay Sethi: Thank you. Once again thank you everyone for your time really appreciate the time that you spent on the call we do hope you all stay well and jointly we look forward to better times ahead. Thank you.
• Moderator: Thank you. On behalf of Chalet Hotels Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.