Advent Hotels International Ltd Management Discussions

In this Information Memorandum, unless the context otherwise indicates, requires or implies, any reference to "the Company" or "our Company" refers to Advent Hotels International Limited, on a standalone basis, and any reference to "we", "us" or "our" is a reference to our Company collectively with our Subsidiaries, on a consolidated basis.

The following discussion and analysis is intended to convey the managements perspective on our financial condition and results of operations as at and for the financial years ended, June 2025, March 31, 2025 and March 31, 2024. The following information is qualified in its entirety by, and should be read together with, the more detailed financial and other information included in this Information Memorandum, including the information contained in "Risk Factors", "Industry Overview", "Our Business" and "Restated Consolidated Financial Information" beginning on pages 18, 85, 106 and 168, respectively, as well as financial and other information contained in this Information Memorandum as a whole.

Our financial year ends on March 31 of each year, and references to a particular Financial Year or Fiscal are to the 12-month period ended March 31 that year, unless the context indicates otherwise.

Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived from our Consolidated Financial Information disclosed in "Restated Consolidated Financial Information" on page 168. We have also included various financial and operational performance indicators in this Information Memorandum, some of which have not been derived from the Financial Information. The manner of calculation and presentation of some of the financial and operational performance indicators, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions.

Some of the information in this section, including information with respect to our plans and strategies, contain forward-looking statements that involve risks and uncertainties. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. You should read "Forward-Looking Statements" and "Risk Factors" beginning on pages 10 and 18, respectively, for a discussion of the risks and uncertainties related to those statements that may affect our business, financial condition or results of operations.

Overview

Advent Hotels International Limited is a newly established and professionally managed hospitality platform that possesses a bold vision and deep roots in Indias real estate and infrastructure landscape. Launched in 2025 as part of a strategic demerger from Valor Estate Limited, Advent combines the execution capabilities of one of Indias most experienced developers with the global aspirations and operational expertise of an asset-heavy, experience-led hospitality company.

Advent is poised to emerge as a standalone, publicly listed entity characterised by a diversified shareholding structure and a Board comprising seasoned professionals. Our goal is to establish ourselves as a formidable force in the Indian hospitality sector, focusing on high-barrier urban and leisure locations, global brand partnerships, and sustainable, design-forward developments.

As of the date of this Information Memorandum, Advents portfolio includes seven properties, featuring two fully operational hotels, two under construction, and three in the planning stage. Our operational portfolio includes two landmark assets:

Grand Hyatt Goa: Operational for over 13 years, this hotel contributes significantly to our recurring cash flows, operational credibility, and strong brand recognition, with 313 keys.

Hilton Mumbai International Airport: With 171 keys and operational for 24 years, this property maintains stable occupancy and strong performance metrics.

Together, these properties contribute 484 stabilised keys and form the cornerstone of our recurring cash flows, operational credibility, and strong brand recognition.

Advent is also developing Indias largest integrated hospitality complex at Delhi Aerocity in a JV with Prestige Estate. This project spans 12.25 acres, featuring a total built-up area of 3.36 million sq. ft. and represents a record capital expenditure of 5,500 crores. Anchored by two global luxury brands, St. Regis (188 keys) and Marriott Marquis (590 keys) the complex will offer a total of 778 keys, alongside 616,000 sq. ft. of premium office space and 150,000 sq. ft. of MICE facilities, including one of Indias largest single pillarless banquet halls.

Strategically located in the heart of Aerocity near IGI Airport, the project is designed to serve luxury travellers, MICE clientele, and global businesses. With scale, quality, and world-class partnerships at its core, Advents Aerocity project is set to become a benchmark in Indias hospitality and commercial real estate landscape.

Over the next 5 years, Advent aims to scale its platform to over 3,000 keys under ownership or operational control, focusing on metro and Tier 1 cities, airport precincts, and leisure corridors.

Significant developments after June 30, 2025 that may affect our future results of operations

Except as disclosed below and as disclosed elsewhere in this Information Memorandum, to our knowledge, no circumstances have arisen since June 30, 2025 that materially and adversely affect or are likely to affect our operations, trading or profitability, or the value of our assets or our ability to pay our liabilities within the next 12 months.

Significant factors affecting our business, financial condition and results of operations

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed in the section titled ‘Risk Factors beginning on page 18 of this Information Memorandum. The following are certain factors that had, and we expect will continue to have, a significant effect on our financial condition and results of operations:

General political, social and economic conditions in India and other countries;

Regulatory changes and the Companys ability to respond to them;

Our ability to successfully implement our strategy, our growth and expansion plans and technological changes;

Change in domestic and foreign laws, regulations and taxes and change in the competition in the industry; Fluctuation of the operating cost;

Dependency on our management and our ability to attract and retain qualified personnel;

Any adverse outcome in the legal proceedings in which the Company is involved;

Strikes or work stoppages by our employees or contractual employees; Accidents and natural disasters; and Other factors beyond our control.

Summary of Past Financial Performance of Hotels Business

The Hotels Business of Valor Estate Limited (VEL) was demerged into the Company with effect from April 1, 2025 (appointed date), and the scheme became effective on July 1, 2025. The Consolidated Financial Statements for FY25 and FY24, prepared under Ind AS, consolidate subsidiaries line-by-line and joint ventures under the equity method. This section presents the key performance highlights of the hotels business for these periods.

VEL acquired Goan Hotels & Realty Pvt. Ltd. (100%), BD & P Hotels (India) Pvt. Ltd. (75%), and Bamboo Hotel & Global Centre (Delhi) Pvt. Ltd. (50% joint venture) from related parties on September 30, 2023. These businesses were subsequently transferred to the Company Goan Hotels and Bamboo through a share purchase agreement dated June 6, 2024, and BD & P Hotels through the Composite Scheme of Amalgamation and Arrangement.

The transfer / Composite Scheme has been accounted for using the Pooling of Interests Method under Appendix C of Ind AS 103. Accordingly, assets and liabilities were recorded at book values from VELs consolidated accounts, and the financials have been consolidated as if the Hotels Business had always been part of Advent.

FY25 and FY24 figures are not comparable, as the hospitality businesses of Goa (Grand Hyatt Goa), Mumbai (Hilton Mumbai International Airport), and Delhi (Bamboo) were acquired by VEL on September 30, 2023, and later transferred/demerged into the Company. FY24 includes partial-year contributions (October 1, 2023 to March 31, 2024), while FY25 reflects full-year contributions. FY23 data is not applicable, as the Company was an associate of VEL before becoming a wholly-owned subsidiary in FY24.

(a) Significant Items of Income

	For the year ended			% change FY25 vs FY24	% change Jun25 vs Mar25
Particulars (Rs in Lakhs)	June 2025	March 31, 2025	March 31, 2024
Revenue from Operation	8048.29	36,657.42	20,095.14	Non comparable	Non comparable
Other Income	8.56	58.99	2446..81	Non comparable	Non comparable
Total Income	8056.85	36716.41	22541.95	Non comparable	Non comparable
RevPar	10,769	13,063	12,402	5.33%	(17.56%)
Occupancy %	82%	80%	75%	6.66%	2.5%

a) Hotels business posted record performance, fuelled by broad-based RevPAR growth across Retail, Contracted, and MICE segments. b) Rental income witnessed an uptick, supported by new customers and incremental rentals under fresh lease agreements. c) Other income for FY25 was significantly lower than FY24 ,primarily due to the inclusion of profit on the sale of investment of non-core asset amounting to Rs. 2,397 lacs in FY24

(b) Significant Items of Expense

Note: Figures for both years are not comparable since hospitality business of Goa and Delhi was acquired by Advent from Valor on September 30, 2023 through a share purchase agreement.

Particulars (Rs in Lakhs)	For the year ended			% change FY25 vs FY24	% change Jun25 vs Mar25
	June 2025	March 31, 2025	March 31, 2024
Food and beverage consumed	1,881.19	2,507.00	1,429.98	Non comparable	Non comparable
% of Food Revenue	26.52%	28.14%	27.57%	NA	NA

Raw Material cost marginally increased on account of increase in covers at existing food and beverage outlets.

	For the year ended
Particulars (Rs in Lakhs)	June 2025	March 31, 2025	March 31, 2024	% change FY25 vs FY24	% change Jun25 vs Mar25
Other operating expenses	1,316.14	5,246.69	2,419.56	Non comparable	Non comparable
% of Revenue from Operation	16.35%	14.31%	12.04%	NA	NA

Other expenses include key variable expenses such as power and fuel, sales and marketing, consumption of stores and spares, repairs and maintenance etc. On proportion to revenue from operation, operating expenses are stable in FY25 vis-a-vis FY24. Marginal increase in repair of plant and machinery cost in FY25 resulted in marginal increase in other operating expenses. Project improvement expenses in June 25 resulted in marginal increase in expenses.

	For the year ended
Particulars (Rs in Lakhs)	June 2025	March 31, 2025	March 31, 2024	% change FY25 vs FY24	% change Jun25 vs Mar25
Employee Benefit expenses	1,881.19	6,704.67	3,202.04	Non comparable	Non comparable
% of Revenue from Operation	23.37%	18.29%	15.93%	NA	NA

Incremental employee expenses are usually on account of increments and promotion during the year.

	For the year ended
Particulars (Rs in Lakhs)	June 2025	March 31, 2025	March 31, 2024	% change FY25 vs FY24	% change Jun25 vs Mar25
Operating Profit (EBITDA)	2151	13,028.86	7899.54	Non comparable	Non comparable
% of Revenue from Operation	26.73%	35.54%	39.31	NA	NA

EBITDA margin declined as stable employee costs and rising operating expenses outweighed the marginal rental income growth.

	For the year ended
Particulars (Rs in Lakhs)	June 2025	March 31, 2025	March 31, 2024	% change FY25 vs FY24	% change Jun25 vs Mar25
Profit before tax (PBT) before exceptional items	3046.32	1813.91	4641.42	Non comparable	Non comparable
% of Revenue from Operation	37.95%	4.95%%	23.10%	NA	NA

Consolidated Results of Operations

The following table sets forth our Restated Consolidated income statement data, the components of which are expressed as a percentage of total income for the periods indicated, for our operations for June 2025, March 2025 and March 2024:

	June 2025		For the Financial Year Ended March 31
			2025		2024
Particulars	Amount in Lakhs	% of Total Income	Amount in Lakhs	% of Total Income	Amount in Lakhs	% of Total Income
Revenue from	8048.29	99.9%
Operations			36,657.42	99.84%	20,095.14	89.15%
Other Income	8.56	0.1%	58.99	0.16%	2,446.81	10.85%
Total Income	8056.85	100%	36,716.41	100%	22,541.95	100.00%
Expenses:
Food and beverages consumed	615.28	7.64%	2,507.00	6.83%	1,429.98	6.34%
Other operating expenses	1316.14	16.34%	5,246.69	14.29%	2,419.56	10.73%
Employee Benefits	1881.19	23.35%
Expenses			6,704.67	18.26%	3,202.04	14.20%
Depreciation and	1371.73	17.03%
Amortization Expenses			5,147.99	14.02%	2,549.89	11.31%
Finance Costs	1229.87	15.26%	6,125.95	16.68%	3,155.04	14.00%
Other Expenses	2092.97	25.98%	9,170.21	24.98%	5,144.02	22.82%
Total Expenses	8507.17	105.59%	34,902.50	95.06%	17,900.53	79.41%
gProfit / (Loss) before exceptional items and tax	(450.32)	(5.59%)	1,813.91	4.94%	4,641.42	20.59%
Exceptional Items	4783.47	59.37%	(1,859.01)	-5.06%	18,699.35	82.95%
Profit / (Loss) before share of profit / (loss) from associates and joint ventures	4333.15	53.78%	3,672.92	10.00%	(14,057.94)	-62.36%
Share of Profit / (Loss) from associates and joint ventures	14.82	0.18%	(20.05)	-0.05%	(112.76)	-0.50%
Profit / (Loss) before tax	4347.97	53.97%	3,652.87	9.95%	(14,170.69)	-62.86%
Tax expense:
- Current tax	107.71		488.36		183.49
- Deferred tax charge / (credit)	1193.94		489.39		896.61
Total Tax expense	1301.65	16.16%	977.74	2.66%	1,080.10	4.79%
Profit / (Loss) after tax	3046.32	37.81%	2,675.12	7.29%	(15,250.79)	-67.66%

Cash Flows

The following table summarizes our restated consolidated cash flows for June 2025, March 2025 and March 2024:

(Rs in Lakhs)

	June 2025	For the Financial Year Ended March 31
Particulars		2025	2024
Net Cash Inflow / (Outflow) From Operating Activities	8247.15	2,31,031.56	18,951.28
Net Cash Inflow/(Outflow) From Investing Activities	3133.64	(2,18,309.01)	790.90
Net Cash Inflow/(Outflow) From Financing Activities	(10809.69)	(15,699.84)	(16,260.19)
Net Change in cash and cash equivalents	571.10	(2,977.29)	3,481.99
Opening Cash and Cash Equivalent	504.71	3,481.99	-
Closing Cash and Cash Equivalent	1075.81	504.71	3,481.99

Contingent Liabilities

Please see below details of contingent liabilities for the consolidated period as indicated in this Information Memorandum:

	June 2025	For the Financial Year Ended March 31
Particulars (Rs in Lakhs)		2025	2024
Claim against the company not acknowledged as debt
i) Income tax	1,112.88	1,112.88	0
ii) GST	1,537.05	1,537.05	0

Except as disclosed above, guarantees are issued to banks and financial institutions against credit facilities extended. Details of the same can be found in note no 42.2 of the Restated Consolidated Financial Statements.

Recent Accounting Changes

There are no significant changes in the accounting policies during June 25, March 2025 and March 2024.

Statutory Auditors Qualifications or Observations

There are no adverse qualifications by the Statutory Auditors which have not been given effect to in the Consolidated Financial Statements.

Unusual or Infrequent Events or Transactions

Except as described in "Risk Factors" on page 18 and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page 170, there have been no events or transactions to our knowledge that have in the past or may in the future affect our business operations or financial performance which may be described as "unusual" or "infrequent".

Significant Economic Changes

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. See "Risk Factors" on page 18.

Known Trends or Uncertainties

Our business has been subject, and we expect it to continue to be subject, to significant changes arising from the trends identified and the uncertainties described in "Risk Factors" beginning on page 18. Except as disclosed in this Information Memorandum, there are no known trends or uncertainties that have or had or are expected to have a material adverse effect on our revenue or income from continuing operations.

Future Relationships Between Expenditure and Income

Other than as described in "Risk Factors" on page 18, "Our Business" on page 106 and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page 170, to our knowledge there are no known factors which we expect will have a material adverse impact on our business operations, financial performance and growth prospects.

New Product or Business Segments

Other than as described in "Our Business" on page 106 there are no new products or business segments in which we operate.

Supplier or Customer Concentration

We do not have any material dependence on a single or few suppliers. We have a wide customer base and do not have any material dependence on any particular customer.

Related Party Transactions

The details of the related party transactions have been provided in Annexure A of Consolidated Financial Statements.

Seasonality of Business

The hospitality industry in India is subject to seasonal variations. The periods during which the hotels in our portfolio experience higher revenues vary from property to property, depending principally upon location, weather and guest profile. Our revenues are generally higher during the second half of each Financial Year. Seasonality affects leisure travel, including weddings, inbound foreign leisure travel, etc., such that demand is relatively stronger during the October to March period. However, business travel and MICE are generally more consistent throughout the year. Seasonality can be expected to cause quarterly fluctuations in our revenues, profitability and margins.

See also "Risk Factors - Our business is subject to macroeconomic conditions, seasonal and cyclical volatility and variations which could result in fluctuations in our results of operations and financial condition." above on page 18.

Competitive Conditions

We expect competitive conditions in our industry to further intensify as new entrants emerge and as existing competitors seek to emulate our business model and offer similar products. For further details, please refer to "Risk Factors" and "Our Business" beginning on pages 18 and 106, respectively.