Asian Hotels West Ltd Management Discussions

The ongoing Israel Iran conflict has become one of the biggest geopolitical risks to the global economy in 2026. Its impact is being felt mainly through oil prices, inflation, trade disruptions, financial markets, and investor confidence. The conflict has already contributed to inflation spikes in several countries. In the United States, inflation reportedly rose to 3.8% in April 2026, largely because of energy costs. Economists expect weaker GDP growth if the conflict continues for a prolonged period. S&P Global estimated that a severe regional escalation could temporarily reduce global GDP significantly. India is particularly sensitive because it imports most of its crude oil. Indias RBI may also become cautious on interest-rate cuts if inflation rises further. The biggest variable remains the duration of the conflict and whether energy supply routes in the Gulf remain disrupted.

INDIAN ECONOMY

In India, the hospitality sector is projected to continue recording healthy revenue growth, with industry estimates indicating growth of around 9 12% in FY 2026 driven by strong occupancy levels and improved average room rates (ARRs). Premium hotel occupancy is expected to remain robust in the range of 72 74%, while room tariffs are anticipated to witness steady growth owing to demand outpacing new supply additions in major cities.

The sector continues to witness strong demand from domestic leisure tourism, destination weddings, religious tourism, concerts, sporting events, and corporate travel. Tier-II and Tier-III cities are also emerging as important hospitality markets due to improving connectivity, rising disposable incomes, and expansion of branded hotel chains.

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian hospitality industry continued its growth momentum during FY 2025-26, supported by robust domestic travel demand, recovery in international tourism, increasing business travel, and sustained growth in the MICE (Meetings, Incentives, Conferences and Exhibitions) segment. The industry witnessed healthy occupancy levels, improved Average Room Rates (ARRs), and continued expansion across leisure, luxury, and mid-market segments.

Demand growth continued to outpace room supply in several key markets, leading to improved pricing power for hotel operators and stronger operational performance across the sector. Premium hotel occupancy across India remained strong during FY 2025-26, supported by domestic leisure travel, destination weddings, religious tourism, corporate travel, concerts, sporting events, and government-led tourism initiatives.

The hospitality sector also benefited from increasing air connectivity, infrastructure development, digital travel platforms, and rising consumer preference for branded hospitality experiences. Global hospitality brands and domestic operators continued aggressive expansion plans in India, reflecting long-term confidence in the market potential.

Indias hotel industry is projected to grow between 9% and 12% during FY2026, with demand expected to remain resilient across key segments despite a high base effect from previous years.

INDIAN HOSPITALITY OUTLOOK

The outlook for the hospitality industry remains positive over the medium to long term. Industry reports indicate continued growth in occupancy levels, ARR, and Revenue Per Available Room (RevPAR), supported by favourable demand-supply dynamics across major hospitality markets.

Key growth drivers expected to support the sector include:

Sustained domestic leisure travel demand;

Expansion of corporate travel and MICE activities;

Growth in destination weddings and social events;

Increasing religious and experiential tourism;

Rising penetration into Tier-II and Tier-III cities;

Digital transformation and data-driven revenue management;

Asset-light expansion strategies by hospitality operators;

Increasing demand for wellness, luxury, and sustainable tourism experiences.

Industry estimates indicate that premium room inventory growth may continue to lag demand growth over the next few years, which is expected to support occupancy and pricing levels across key markets.

The sector is also witnessing increasing investments in branded residences, mixed-use hospitality developments, serviced apartments, and experiential destinations, reflecting evolving consumer preferences and long-term investment confidence in tourism-linked assets.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS

Opportunities

In the hospitality industry, operators should look to capitalize on evolving consumer preferences by integrating smart technologies, such as contactless check-ins and AI-driven personalization, to enhance the guest experience. Additionally, businesses can target emerging markets like "bleisure" travel (combining business and leisure) and eco-tourism. Creating unique local experiences, offering flexible extended-stay packages, and leveraging digital marketing platforms allow properties to tap into new, high-value demographics and generate sustainable revenue.

Threats

The hospitality sector faces significant threats from disruptive business models like short-term rentals (e.g., Airbnb), which increase market competition and alter traditional pricing structures. Unfavorable economic conditions, such as inflation and fluctuating consumer discretionary spending, can quickly reduce travel demand. Furthermore, rapid technological changes and new luxury competitors can render established services obsolete, requiring businesses to continuously adapt to stay relevant.

Risks (Operational & Financial)

Operational and financial risks revolve around the day-to-day challenges of running a property, particularly the tight labor market and widespread staff shortages, which can compromise service quality. Rising operational costs including increased expenses for food, utilities, and wages directly impact profit margins. Additionally, businesses face physical and legal risks such as workplace safety hazards, supply chain disruptions, and the ever-present vulnerability to natural disasters.

Concerns

Industry-wide concerns often focus on reputational damage, particularly the rapid spread of negative reviews on social media platforms, which can instantly deter potential guests. Data privacy and cybersecurity remain major concerns as hotels and restaurants increasingly collect, store, and process sensitive guest information. Moreover, businesses are increasingly concerned with shifting regulatory environments, compliance requirements, and managing long-term environmental sustainability pressures.

Conclusion

For 2026 27, the hotel industry outlook is broadly positive, especially in India, due to strong domestic tourism, event-driven travel, luxury demand, and limited room supply. However, profitability and long-term success will depend on how effectively hotels manage rising costs, technology adoption, sustainability expectations, and evolving traveler preferences.

SEGMENT WISE PERFORMANCE

During the period under review, the Company engaged in only one segment of Hotel Business hence segment wise performance is not applicable.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate reporting systems in respect of financial performance, and reporting with respect to compliance of various statutory and regulatory matters. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Act. The internal auditors of the Company had regularly conducted exhaustive internal audits pertaining to financial and compliance areas and their reports were placed before the Audit Committee for its review and recommendations.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE (STANDALONE BASIS).

Total Income

The total income of the Company for the financial year under review was INR [-5.79] Crores as against INR [5.64] Crores during the previous Financial Year ended on 31st March 2025.

Profit before Tax

Your Company has registered PBT of INR [-10.04] Crores as against INR [-35.89] Crores during previous Financial Year.

Total Comprehensive Income/(loss) after tax

Your Company has registered Comprehensive Income/(loss) after tax of INR [-8.55] Crores as against INR [-36.28] Crores during previous Financial Year.

Key Ratios

Key financial ratios are given below:

Particulars	2025-26	2024-2025
PBIDT/Turnover	-0.65	-5.17
Profit After Tax/Turnover	-1.48	-6.43
PBIDT/ Finance Cost (no. of times)	-1.41	-8.88
Debt to Equity	3.99	3.68
Book Value per share(/share)	86.24	93.57
Earnings per share(/share)	-7.34	-31.13
Return on Equity (percent)	8.16	-28.53
Net Profit Margin (%)	-147.61	-642.77
Current Ratio	.01	0.03

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES /INDUSTRIAL RELATIONS FRONT

As our Company is part of the hospitality industry the importance of efficient and motivated human resources helps in achieving complete customer satisfaction, which in turn has direct impact on the brand image and turnover of the Company. However, the operations of the Company are not yet started after coming out from CIRP. During the period under review there were two employees in the Company i.e Company Secretary and Chief Financial Officer.

The Company recognizes the importance of human values and ensures that proper encouragement both moral and financial is extended to employees to motivate them. The senior management team consists of experienced professionals with diverse skills.

DETAILS OF SIGNIFICANT CHANGE (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN THE KEY FINANCIAL RATIO

Particulars	2025-26	2024-25
Debtors Turnover	0	-
Inventory Turnover	0	-
Interest Coverage Ratio	-1.41	-8.88
Current Ratio	0.01	0.03
Debt Equity Ratio	3.99	3.68
Operating Profit Margin (%)	0.00	0.00
Net Profit Margin (%)	0.00	0.00

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIALYEAR

Particulars	2025-26	2024-25
Return on Equity(percent)	-8.16	[-28.53]

Cautionary Statement

The Statements in the ‘Management Discussion and Analysis Report with regard to projections, estimates and expectations have been made in good faith. The achievement of results is subject to risks, uncertainties and even less than accurate assumptions. Market data and information are gathered from various published and unpublished reports; their accuracy, reliability and completeness cannot be assured.

	For and on behalf of the Board of
	Asian Hotels (West) Limited
Place: New Delhi	Sandeep Gupta
Date: May 25, 2026	Chairman and Non-Executive Director
	(DIN: 00057942)