MHRIL - Mahindra Holidays & Resorts India Limited Share Price

Management provided a robust outlook for Mahindra Holidays & Resorts India Limited, with notable growth metrics and strategic initiatives outlined. For the fourth quarter of FY '25, the standalone PAT (Profit After Tax), excluding one-offs, increased by 61%, reaching INR 57 crores. The consolidated PAT grew by 12% YoY. For the full financial year, standalone PAT, excluding one-offs, saw a 25% increase, totaling INR 197 crores, while consolidated PAT rose by 37% to INR 134 crores.

The key forward-looking points highlighted by management include:

1. Inventory Growth: The company added 520 keys and seven new managed resorts across India in FY '25, with a target to reach 10,000 keys by FY '30. The current inventory stands at about 5,850 keys, and management is investing in greenfield and brownfield projects.
2. Member Addition Strategy: The average unit realization (AUR) improved significantly, with FY '25 AUR at INR 5.73 lakhs (up 39%) and Q4 at INR 7.7 lakhs (up 82%). Member additions for FY '25 totaled 12,400, bringing the cumulative base to 304,000.
3. Market Demand: Management noted a strong demand in the market, with increased resort revenue in Q4 at INR 107 crores (up 14% YoY) and full-year revenue at INR 396 crores (up 8%).
4. Premiumization Strategy: The focus remains on premiumizing the brand, aimed at attracting a higher-tier customer base while rationalizing member additions to improve overall member experience.

Overall, management expressed confidence in continuing this positive momentum and improving operational metrics in the forthcoming quarters.

Questions and Answers from Q&A Section

1. Pankaj Kumar: "How do you see inventory additions for FY '26?"
Manoj Bhat: "In FY '26, we plan to add many rooms while also exiting some resorts based on customer feedback. Our target is to add about 1,000 rooms gross, but the net addition will be lower due to departures from some associate resorts."

2. Pankaj Kumar: "What's the capex for upcoming greenfield resorts?"
Manoj Bhat: "Capex for FY '26 will exceed FY '25, driven mainly by our large projects in Ganpatipule and Theog. Additionally, we plan refurbishments on certain older resorts, contributing to a meaningful increase in capex."

3. Pankaj Kumar: "Will member additions align with inventory growth?"
Manoj Bhat: "Yes, inventory additions will directly lead member growth, particularly focusing on product simplification and targeted customer acquisition. Henceforth, we should see growth in member additions."

4. Shreyans Gathani: "What is the expected stabilization level for the member-to-room ratio?"
Manoj Bhat: "Currently at 52, our aim is for stability between 45-48 based on refusal rates and availability, adjusting as needed but not strictly targeting that number."

5. Himanshu Shah: "How many members were upgraded in FY '25?"
Manoj Bhat: "We upgraded about 11,500 members this year. This trend is likely to continue, but I anticipate a decrease in the rate of growth moving forward."

6. Akshat Bairathi: "What will be the expected tax rate for FY '26?"
Vimal Agarwal: "For standalone purposes, the tax rate remains at 25%, and for consolidated numbers, it's around 35%."

7. Varun Mishra: "What are the strategies for boosting revenues at Holiday Club Resorts?"
Manoj Bhat: "We expect a recovery based on weather normalization. We will maintain a dual strategy between conventional hotels and an active timeshare model to enhance sales."

8. Nidhi Agarwal: "Are you looking at reaching 10,000 keys by FY '30? How many are already signed?
Manoj Bhat: "We feel 60% to 70% comfortable with our current funnel towards that target, including both owned and leased keys."

9. Shreyans Gathani: "Is the ASF uniform for all members within the same category?"
Manoj Bhat: "Yes, the ASF is the same for all members within a category, regardless of their join date."

10. Pranav Tendulkar: "How are sales and marketing costs being managed moving forward?"
Manoj Bhat: "Sales and marketing costs are optimized, focusing on targeted offers and geographic expansion as we prepare for greater member additions."

Each of these responses conveys the management's strategies, insights on growth, and focuses on both operational and financial aspects while noting their ongoing adjustments to improve business outcomes in FY '26 and beyond.