Lemon Tree Hotels Limited

rs,

lead to new investments and may also enhance volumes and liquidity. Slide 5 In the past two years, the company had a sequential focus on cost optimization and on ARR recovery, on like-to-like basis

1200 bps

and on ARR recovery, on like-to-like basis EBITDA margin percentage is expanded by approximately 1200 bps, which is 44.9% in Q3 FY22 versus 32.4% in Q1 FY20. lemoree HOTELS Going forward in FY23

44.9%

ry, on like-to-like basis EBITDA margin percentage is expanded by approximately 1200 bps, which is 44.9% in Q3 FY22 versus 32.4% in Q1 FY20. lemoree HOTELS Going forward in FY23 net EBITDA marg

32.4%

s EBITDA margin percentage is expanded by approximately 1200 bps, which is 44.9% in Q3 FY22 versus 32.4% in Q1 FY20. lemoree HOTELS Going forward in FY23 net EBITDA margins will stabilize on an

50%

Going forward in FY23 net EBITDA margins will stabilize on an ongoing basis at greater than 50%. Slide 6 On this slide you can see that the company’s gross ARR in Q4 FY22 was 90% of Q4 FY20

90%

greater than 50%. Slide 6 On this slide you can see that the company’s gross ARR in Q4 FY22 was 90% of Q4 FY20 and during FY22 Lemon Tree's ARR versus the all India ARR has improved from 62% in Apr

62%

22 was 90% of Q4 FY20 and during FY22 Lemon Tree's ARR versus the all India ARR has improved from 62% in April 2022 to 77% in March 2022. During FY22, the company showed resilience after the third wav

77%

0 and during FY22 Lemon Tree's ARR versus the all India ARR has improved from 62% in April 2022 to 77% in March 2022. During FY22, the company showed resilience after the third wave of COVID, the occup

34%

wed resilience after the third wave of COVID, the occupancy recovered in less than six weeks from 34% in Jan-22 to 60% in Mar-22; whereas after the second wave in Q1 FY22 recovery took less than six m

60%

fter the third wave of COVID, the occupancy recovered in less than six weeks from 34% in Jan-22 to 60% in Mar-22; whereas after the second wave in Q1 FY22 recovery took less than six months. This recov

6%

Now, speaking of the Q4 operational metrics from Slide 13 onwards, managed inventory increased by 6% to about 3,300 rooms and total inventory by 2% to 8,490 rooms. This is on a year-on-year basis occ

2%

om Slide 13 onwards, managed inventory increased by 6% to about 3,300 rooms and total inventory by 2% to 8,490 rooms. This is on a year-on-year basis occupancy percentage on full inventory decreased

“As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.”

“| will be covering the quarterly business highlights and performance for the year ending 31st, March 2022, after which we'll open the forum for questions and suggestions.”

“lemoree HOTELS Going forward in FY23 net EBITDA margins will stabilize on an ongoing basis at greater than 50%.”

“When the current pipeline becomes operational by FY25, Lemon Tree will operate approximately 10,700 rooms in 109 hotels across 65 destinations.”

“We are reasonably sure that resumption will reach pre COVID levels by H1 of this year.”

“And just secondly, as you've alluded earlier in your remarks that you want to bring the debt down significantly to the next three to four years, so could you give us some roadmap on how we intend to get there?”

“So, that will be one opportunity for us to get a third party, and which will typically be a sovereign or a pension fund into the joint venture where 80% or 75% of our debt resides.”

“So, if you do some simple math, I've already given you some kind of informal guidance and to add on what we think will happen in the next two years.”

“And in fact, you've indicated publicly a while back that by the end of this calendar year, 2022 you actually expect ARRs to significantly accelerate.”

“| don't want to give guidance in that sense.”

Patanjali Keswani

25

Adhidev

4

Sumant Kumar

4

Achal

3

Kapil Sharma

2

Hitesh Arora

2

Nihal Jham

2

Anoop Poojari

1

Baidik Sarkar

1

Anoop Poojari

Ladies and gentlemen, good day and welcome to the Lemon Tree Hotel's Limited earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ™' and then '0' on your touchtone phone. Please note, that this conference is being recorded. | now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you and over to you, sir. Thank you. Good afternoon, everyone, thank you for joining us on Lemon Tree Hotels Q4 & FY22 earnings conference call. We have with us today, Mr. Patanjali Keswani, Chairman and Managing Director; Mr. Kapil Sharma, Chief Financial Batra, Senior Vice Inder Pal Mr. Vikramjit Singh, President; and Mr. Officer; President of the company. We would like to begin the call with brief opening remarks from the management, following, which we have the foru

Patanjali Keswani

Good afternoon, everyone and thank you for joining us on the call. | will be covering the quarterly business highlights and performance for the year ending 31st, March 2022, after which we'll open the forum for questions and suggestions. Our investor presentation is already uploaded on the exchanges for your reference. Slide 3 We are happy to announce that Lemon Tree has been included in the MSCI India's small caps index effective 1st June 2022. This will hopefully lead to new investments and may also enhance volumes and liquidity. Slide 5 In the past two years, the company had a sequential focus on cost optimization and on ARR recovery, on like-to-like basis EBITDA margin percentage is expanded by approximately 1200 bps, which is 44.9% in Q3 FY22 versus 32.4% in Q1 FY20. lemoree HOTELS Going forward in FY23 net EBITDA margins will stabilize on an ongoing basis at greater than 50%. Slide 6 On this slide you can see that the company’s gross ARR in Q4 FY22 was 90% of Q4 FY20 and during F

Patanjali Keswani

See, | don't want to give specific numbers, let me put it this way that in this financial year FY23, we will at least grow 100% in revenue versus FY22, and we will have a minimum net EBITDA margin of 50%.

Adhidev

Sir, are you seeing these already in the April and May numbers, any sort of trends being there or is it still some time to go, till we fully get there?

Patanjali Keswani

No, we are already there, actually from the last week of Mar-22, you see the key was corporate traction. So, while it is catching up, you have to keep in mind that unlike, the other listed players, we have massive inventory. We have 86% of our inventory is business hotels ie. of the owned inventory and only 14% is leisure. That's the first point. So, when leisure picks up and business does not pick up, then we are at a disadvantage. Now, when you reverse that, conversely, when business picks up, then we are at an advantage. So, what we found, if you look at Gurgaon, Hyderabad and Bangalore, 40% of our owned inventory is just from these three cities and our hotels are all located in large business concentrated areas. Now these were IT businesses. So, these were completely affected for both January and February in the quarter that went by. All of them opened the offices in late March. Now we found that for this quarter Q1 FY23, Bangalore is doing what used to do 30%- 40%, is doing 80%. T

Adhidev

Okay. So that's helpful. And just secondly, as you've alluded earlier in your remarks that you want to bring the debt down significantly to the next three to four years, so could you give us some roadmap on how we intend to get there? What are the plans to de-leverage to organic and inorganic means?