Country Club says current debt under Rs 200cr

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Country Club says current debt under Rs 200cr

In an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, Siddharth Reddy, CEO of Country Club, spoke about the latest happenings in his company and the road ahead.

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In an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, Siddharth Reddy, CEO of Country Club , spoke about the latest happenings in his company and the road ahead.

Below is a verbatim transcript of the interview. Also watch the video.

Q: How exactly business is panning out for you all in terms of occupancies and average room rates (ARRs) currently?

A: The ARRs and occupancies have been doing spectacular. This month, especially, we are doing upwards of over 90%. For the whole year, we are at about 70%. We are along the lines of everybody else. The India growth story is continuing-the juggernaut is going forward despite the global trouble. So I guess a strong domestic consumption story is here to stay.

Q: So to capitalize on this strong domestic consumption stories are you looking at may be expanding your presence-buying some property?

A: If you look at the company, we started with about one property back in 1989. By 2005, we actually increased to about 10 properties and then post that now the company owns 35 properties and manages about 50 properties throughout the country, including about two properties in every single metropolitan city in India. We also have strong presence in every single tier one city and resort locations like Goa, Bandipur etc. So from that front we have done fantastically well expanding from 10 properties to 50 within the matter of four years-that's an average of about 11-12 properties on a yearly basis.

We are at a stage where-let's say like an an a IPL game. From zero to the eight over you are hitting big. We have done the expansions well but now we are in the stage between the eight and the fourteenth over, where we are just going to finish of our projects-we are going to go through a period of consolidation. But once we are done with that hopefully from next year onwards we will be back to the last leg of our target.

Q: So what is it that you are broadly expecting in terms of investment for may be expansions or how many properties? Are you going to be looking at international shores as well?

A: On the whole we have about 50 properties as I mentioned and we will be looking to take this to about 100 over the next five years. The capex plan actually changes literally every quarter because as you know when the world is going through a bit of a liquidity crisis-you can look at it in two ways one you can look it as a difficulty but also you can look it as an opportunity where you can actually get assets at very low prices.

We take the latter as a very good view. The capex plan is-it' too early to tell because it depends on how real estate prices are next year and we believe that the west, specially if we chose to expand there will take at least about 3-4 years for real estate to bounce back, so I think we are in a good position.

Q: If you could just expand on your capex. What are your funding requirements? And how exactly are you going to be funding it? Are you going to be tapping the market anytime soon for these funding requirements at all?

A: I understand the stock is up about 8% or 9% but I guess the question is why isn't it up 80% or 90% because if you look at the company you are talking about a company, which has a networth of over Rs 750 crore with a market cap of only about Rs 160 crore. So from a balance sheet perspective we have all the options available to us.

We are talking about a debt of less than Rs 200 crore. So basically we are very unleveraged. We have the ability to take on lot of debt. We have the ability to raise capital, so I think all the options are on the table at this point. I guess sooner or later once we have our board meeting then we will decide if we have to raise capital to begin with and if we do then what options we take.