Shares of Nitesh Estates jumped nearly 5 percent on Friday after property development company obtained clearances to start operations at 'The Ritz- Carlton', Bangalore, the 5 star luxury hotel in the central business district.
Speaking to CNBC-TV18, Ashwini Kumar, COO, Nitesh Estates says the project is likely to be operational by the end of September of 2013. "In the first year, we expect to start slowly ramping up from around 25 percent occupancy going up to 60-65 percent occupancy,"he says.
Below is an edited transcript of the interview on CNBC-TV18.
Q: By when would do you expect the completion of this project and how much would it add to your revenues?
A: We are expecting to open in a full scale manner by the end of September of 2013. That is the plan in terms of the hotel. In terms of the revenue of course in the first year we expect to start slowly ramping up from around 25 percent occupancy going up to 60-65 percent occupancy.
Q: What will be the revenue inflow if you go by these occupancy expectations—25 percent to start off with and then scaling up to 66 percent? What will this mean in terms of rupee revenues?
A: If I talk of it in terms of the numbers, we are expecting around Rs 13,500 to Rs 15,000 per room day. In addition to that, you have almost an equivalent amount from the other services like banquettes, food and beverages (F&B) and all that. So that is what would contribute finally to the P&L.
Q: You had a disastrous last quarter. How are things looking up now in terms of business? Will you be breaking even? What about sales outlook?
A: When I look at the business from the fundamentals of whether the sales is happening, whether the cash flow is happening I think in terms of that everything is positive. The P&L of course is also an impact of what is happening on the balance sheet, how the percentage of completion is happening. Several of the projects now are getting towards completion. It is only in really the third year of the operations that you will start seeing the bulk of the money coming into the P&L. That is what we expect will start happening from now onwards. What you have seen in the past is not really a reflection of what you are going to see in the future.