Asian Hotels East Ltd Management Discussions

INDUSTRY STRUCTURE, DEVELOPMENT, OPPORTUNITIES AND OUTLOOK

In the financial year ended 31st March, 2026, the star hotel industry in Kolkata demonstrated steady resilience with occupancy levels reaching 71.8%, reflecting a 2.7% year-on-year growth. Despite a softer performance in the final quarter of the financial year under review, driven largely by fewer auspicious wedding dates compared to the previous year, the overall trajectory remained positive.

Average Daily Rate (ADR) for the period stood at Rs 7,229/- reflecting a strong increase of 8.5% compared to the previous year. This growth underscores the hotel industrys ability to sustain pricing power even amidst the seasonal fluctuations, supported by strong demand across both business and leisure segments.

The broader tourism sector in Kolkata continues to benefit from the citys cultural richness, heritage attractions and growing reputation as a hub for festivals and events. While the social and wedding tourism segment moderated during the financial year under review, leisure and business travel remained resilient, supported by improved connectivity and rising domestic demand.

Looking ahead, the outlook of hotel industry remains encouraging. The combination of limited supply, strengthening ADR and Kolkatas expanding appeal as both a cultural and commercial destination is expected to sustain growth momentum. However, diversification of offerings particularly in the social and events segment will be critical to mitigate seasonal variations and capture evolving consumer preferences.

RISKS, CONCERNS AND THREATS

In the financial year ended 31st March, 2026, the star hotel industry in Kolkata continued to benefit from strong demand, particularly from large MICE events. The hotel is focused to catch up to the trend by securing mid-size business groups and larger social gatherings to retain its market share in the segments. However, the hotel industry in Kolkata remains exposed to some risks that could impact its long-term sustainability.

A key concern is the high attrition rate and scarcity of skilled talent, which continues to be the most pressing threat for the sector. The uncertainty in the job market and evolving career preferences have made it difficult to attract and retain the right professionals. This challenge is expected to persist over the next couple of years, potentially affecting service quality and operational efficiency.

Competition is intensifying in the city as newly renovated properties and new hotels enter the market with updated products and modern amenities. These developments pose a significant threat to the established hotels particularly in capturing the business travel segment where guests increasingly seek contemporary facilities and experiences.

Additionally, the expansion of international hotel chains across eastern India, including Kolkata, is creating heightened competition at multiple price points and locations. The growing distribution of the global brands presents a formidable challenge for local operators, who must differentiate themselves to retain both business and leisure travellers.

While the outlook of hotel industry remains positive, these risks underscore the need for proactive strategies. Addressing talent shortage, investing in the product upgrades and strengthening the brand positioning will be critical to sustain the competitiveness in an increasingly dynamic market environment.

EFFICIENT INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

For the financial year ended 31st March, 2026, your Company continued to maintain a robust internal control framework designed to ensure operational efficiency, safeguard assets and uphold the reliability of financial reporting. The system provides reasonable assurance of compliance with applicable laws and regulations, supporting the Companys long-term sustainability.

The documented procedures and policies remain in place across all critical corporate functions and hotel operating units, covering areas such as hotel operations, purchasing, finance, human resources, safety etc. These policies are regularly reviewed and updated to reflect the evolving operational requirements and regulatory changes, ensuring that controls remain relevant and effective.

The internal audit function continues to play a pivotal role in monitoring the adequacy and effectiveness of these controls. Audits are conducted across operational units and major corporate functions, ensuring strict adherence to the established policies and procedures. The Audit Committee of the Board also provides oversight by reviewing audit findings and monitoring the timely implementation of recommendations, thereby reinforcing the governance standards.

The internal control system is designed not only to safeguard your Companys assets but also to ensure the reliability of financial controls and compliance with statutory requirements. Given the dynamic nature of the hospitality industry in Kolkata where the market conditions and consumer preferences can shift rapidly, these controls remain critical for maintaining operational consistency, financial integrity and stakeholder confidence.

DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human Resource Development (HRD) refers to your Companys plan to help employees develop their abilities, skills and knowledge. Industrial relations play a major role in human resource management. It is an important function of HRD that focuses on maintaining good relations between the company, its employees and its business partners.

Your Company tries to ensure that all its selected candidates either possess competencies or can be developed through training to fit into the organisation with the mentioned characteristics. The interviewers are supposed to grade the employees according to what they perceive from the candidate during the rounds of interviews. This fits into the Hyatts strategy by ensuring that the right fit of people is employed keeping in check the overall mission of providing authentic hospitality. The competencies mentioned are characteristics required in employees to best match the manpower need of your Company. The core competencies include a basic framework of the employees personality and how he or she will be able to adapt to the culture of the company. Your Company requires people who are proactive with good communication skills and can fit into a team by working in coordination with others. Your Company does not concentrate on the skill as much as the overall personality of the candidate as they have an extensive training and development module to teach the employees the standard operations. This is done through various extensive task training modules and sessions that are conducted for the employees.

Your Company continues to maintain a very cordial and healthy relationship with its workforce across all its units. The number of people employed on-roll by the hotel as on 31st March, 2026 was 282.

The overall wellbeing of team members is important for your Company and it took necessary steps in ensuring that its associates are happy working for the hotel. Your Company did multiple team building exercises, festive celebrations like Townhall with multiple rewards and recognition, Global Month of Service, Gratitude Day, COP, Diwali Celebration, Christmas celebration, Family Day, Housekeeping week etc.

DETAILS OF SIGNIFICANT CHANGES IN FINANCIAL RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately preceding financial year) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

Particulars	Financial Year
	2025-26	2024-25
Debtors Turnover Ratio	21.79:1	17.40:1
Inventory Turnover Ratio	11.00:1	10.13:1
Current Ratio	7.94:1	7.31:1
Debt Equity Ratio	0.68:1	0.80:1
Operating Profit Margin %	47.19%	48.44%
Net Profit Margin %	22.64%	22.47%
Debt Service Coverage Ratio	3.50	2.83

Net worth of Asian Hotels (East) Limited

Particulars	31 st March 2026 (Rs.)	31 st March 2025 (Rs.)	changes (Rs.)
Net worth	2,13,34,08,247/-	1,87,34,10,501/-	25,99,97,746/-

Net worth is increased due to the following reason during the financial year ended 2025-26:

Particulars	Amount (Rs.)	Reason/Remarks
Assets	25,99,97,746/-	Due to increase in Assets
Increase in Net Worth	25,99,97,746/-

For and on behalf of the Board of Directors

Kolkata
9th July, 2026

Shourya Sengupta
Director
(DIN: 09216561)

umesh Saraf
Jt. Managing Director
(DIN: 00017985)

Swati Singhania
Director
(DIN:03610903)