Apeejay Surrendra Park Hotels Limited — Investor Meet, 20-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** Apeejay Surrendra Park Hotels Limited reported consolidated revenue of ₹156 crore, marking a 10.5% YoY increase. EBITDA improved by 11.3% YoY to ₹57 crore with margins steady at 36.7%. The company achieved a remarkable PAT growth of 80% YoY, resulting in EPS growth of 47% from ₹0.85 to ₹1.15. The hotel division’s RevPAR reached ₹6,440, benefiting from a consistent ARR of ₹6,888, with a YoY ARR growth of 5.2% and RevPAR growth close to 7%.

2. **Future Outlook and Growth Drivers:** Management emphasized ambitious expansion plans, aiming to more than double their keys from 2,410 to 5,048 over the next five years. New hotel openings such as the Lotus Palace Chettinad and Ran Baas The Palace stand to enhance ARR significantly, with premium pricing already reflecting in initial booking rates.

3. **Order Book and Operational Updates:** The company is actively developing significant projects, including a mixed-use property at Kolkata's EM Bypass, projected to generate ₹100 crore in annual cash flow from apartment sales. Future developments include The Park Pune, which is expected to open in April 2027.

4. **Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Analysts questioned ARR growth rate responses, focusing on market demand supply mismatches. Management forecasted double-digit ARR growth based on increased demand amidst lower supply growth.

- **Market Position and Competitive Landscape:** Concerns regarding competitive pressures in ARR for specific locations were discussed, with management confident in their occupancy and market positioning.

- **Operational Challenges or Risks:** Management acknowledged a strong wedding season positively impacting overall bookings and revenue, thus mitigating some macroeconomic risks.

- **Capex and Capital Allocation:** CAPEX guidance is maintained at ₹150 crore to ₹160 crore for FY25, aimed at sustaining revenue-generating momentum while remaining cash positive.

- **Strategic Priorities and Long-Term Vision:** Emphasis on sustainability and expansion in the F&B sector, with a plan to grow Flurys outlets to 350 in five years.

5. **Market or Regulatory Updates:** Management noted continued demand driven by improved connectivity and the recovery of business travel. They expect the hospitality sector to experience a super cycle lasting over a decade.

6. **Strategic Focus Areas:** A strong thrust on operational efficiencies and expansion, with a commitment to sustainability goals reflected in their long-term strategies.

7. **Investor Insight:** Apeejay Surrendra Park Hotels demonstrates robust financial health and growth potential through strategic expansion and market leadership. Current performance and management guidance suggest a ‘buy’ position, given the strong ARR growth prospects and a well-defined growth strategy.