Will sell realty to cut debt; eye 20% growth: Kamat Hotels

The sale of realty assets has significantly helped Kamat Hotels reduce debt. And over the next two quarters, the hotel chain plans to sell assets to pare debt to the tune of Rs 150 crore, says Kurian Chandy, CFO, Kamat Hotels India Ltd.

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Speaking to CNBC-TV18 post announcement of results, Chandy expects revenue for FY14 to grow 20 percent more than last year. He adds that an additional 100 rooms will be added to the chain's 300-room property in Pune to boost revenues and better profitability in the coming quarters. Below is the edited transcript of the interview on CNBC-TV18 Q: The consolidated earnings do not look good at least according to the operational parameters. Can you explain what went wrong and what is your guidance, going forward?
A: The earnings for the quarter were flat. In fact, growth in the next two quarters will also be a little bit slower but there is an increase in average room rates (ARRs) and occupancies are already are on the higher end. We plan to add an additional 100 rooms at our 300-room, property at Pune and this will help to increase revenues and better profitability in the coming quarters. Q: There has been an exceptional gain of about Rs 11.5 crore due to a profit on the sale of property. Do you expect to sell more assets?
A: The sale of realty assets has definitely helped reduce debt. So over the next two quarters, there could be an increase in the sale of assets to reduce debt. Q: What are assets that you plan to dispose off? How much do you plan to raise? By how much would this reduce the level of debt?
A: Debt in the range of around Rs 150-100 crore would be reduced over the next six months. Q: For the full year you have recorded a loss of Rs 62 crore. Will FY14 be positive or at least operationally positive?
A: We expect the year to be operationally and overall, positive. Q: Your revenue has come down by close to 20 percent in Q4. For FY14, how much do you expect revenues to fall?
A: For FY14, we expect revenues to grow by at least 20 percent more than last year.