The ratings are constrained by increased competition resulting in low average room rent over the past two years, volatile EBITDA margins and high adjusted debt/EBITDA of 5.6x in the financial year ended March 2011 (FY10: 4.9x). The high leverage was due to its corporate guarantee extended for a term loan of INR106.5m (FY10: INR95m) of the sister company, Golkonda Resorts Private Ltd
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