Emerald Leisures Ltd Management Discussions

YOUR DIRECTORS ARE PLEASED TO PRESENT THE MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR THE YEAR ENDED 31 st MARCH, 2025.

The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by the Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward-looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise.

The management of the company is presenting herein the overview, opportunities and threats, initiatives by the Company and overall strategy of the company and its outlook for the future. This outlook is based on managements own assessment and it may vary due to future economic and other future developments in the country.

The operational performance and future outlook of the business has been reviewed by the management based on current resources and future development of the Company.

GLOBAL ECONOMY

The year 2024 was marked by geopolitical uncertainty & tight monetary conditions. However, riding on the growth in emerging markets and developing economies, according to IMF World Economic Outlook (April 2025), global GDP is estimated to have grown surprisingly by 3.3% Amongst the emerging markets, India led the pack with 6.5% followed by China with 5.0% while amongst the developed economies USA led with 2.8% growth spurring the global momentum. A major bright spot has been globally easing of inflationary pressures as headline inflation of advanced economies fell from 4.6% in 2023 to 2.6% in 2024, while in emerging markets it fell from 8.0% to 7.7%. This is expected to stabilise at around global average of 2.5%. The global economic outlook for 2025 is that of cautious optimism amidst persistent uncertainties. IMF projects a slowdown in global growth to 2.8% in 2025 & recover to 3.0% in 2026. The forecast thereafter will largely depend on the impact of tariff war. While emerging economies will lead the growth developing countries may see a further slowdown. As trade policy uncertainty remains elevated, impacting global trade flows and economic sentiment. Governments are likely to tighten fiscal policies, and central banks may continue to adjust interest rates to manage inflation and support economic growth.

INDIAN ECONOMIC OUTLOOK

India has emerged as globally fastest growing economy and is ranked 5th largest economy in nominal GDP terms & 3rd largest economy in PPP (purchasing power parity) terms. As per second advanced estimates of national income released by N.S.O. in Feb25, Indias real GDP is expected to grow by 6.5% in 2024-25 as compared to 9.2% in 2023-24. Trade, Hotels, Transport, Communication & Broadcasting services sector is expected to grow at 6.4%.

In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the Indian economy has demonstrated remarkable resilience and robust growth. Inflation has moderated, and policy measures have helped stabilize market liquidity. Inflation eased in 24-25 and as of Feb25 stood at 4.7% vis-a-vis 5.4% in Feb24. Core Inflation fell to 4 years low of 3.5% (DEA, monthly economic review Feb25). Exports grew by 7.1% while Imports marginally declined by 1.1%. Forex reserves stood at $645bln, Current account deficit was stable at 1.1%of GDP in Q3(FY 25) nearly same as in FY 24 but lower from Q2 (FY 2025).

Foreign Portfolio Outflows & Currency Risks

• Sustained foreign portfolio investor (FPI) outflows put pressure on stock markets and the rupee.

• However, domestic investors increased their holdings, stabilizing market ownership structures.

• Rupee depreciation risks remain due to external uncertainties.

RBIs Liquidity Management

• RBI used open market operations (OMO), daily repo auctions, and dollar/rupee swaps to manage liquidity.

• These measures helped stabilize domestic liquidity despite capital outflows.

Trade War & Tariffs Impacting Growth

• The global economy entered 2025 with strong momentum but is now slowing due to increased protectionism and trade restrictions.

• US-China tariff escalations could reduce US GDP growth by 0.6 percentage points in 2025 and shrink the economy by 0.3-0.4% in the long run.

• OECD lowered global GDP forecasts to 3.1% in 2025 and 3.0% in 2026 due to slowing demand.

Despite global economic headwinds, Indias growth remains stable at 6.5%, supported by strong domestic demand. Inflation is under control, though core inflation remains sticky, necessitating careful monetary management. Trade challenges persist due to weak global demand, but a narrowing trade deficit offers some relief. While foreign investor outflows pose risks, robust domestic investment provides resilience. The RBIs proactive policies have played a crucial role in stabilizing liquidity and inflation expectations. Overall, Indias economy is well-positioned for growth, but, persistent and escalating geopolitical tensions, uncertainties in global markets, rising protectionist measures and supply chain pressures, financial volatility, and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum.

Reserve Bank of Indias Monetary Policy Statement of April25 projects real GDP growth of 6.5% for FY 2025-26 on expectations of manufacturing retaining its growth momentum, increase in global demand, continuation of PLI schemes and conducive investment environment. While better than normal monsoon is expected to give a booster to agriculture and rural demand, Bank Credit growth is expected to be over 11% and urban consumption is likely to go up on strength of higher disposable incomes and stable inflation. Indias macroeconomic fundamentals remain robust with favourable outlook for investments, consumption and employment in the coming fiscal year.

INDUSTRY OUTLOOK

Global Tourism continued strong resurgence in 2014. According to United Nations World Tourism Organisations (UNWTO) Barometer Jan25, international tourist arrivals are estimated to reach 1.4billion an 11% growth 2023& 99% growth over pre-pandemic levels. Asia-Pacific (APAC) region recorded 316 million international travellers an increase of 22% in 2024 over 18% growth in 2023.Export revenues from tourism are estimated at record USD$1.9trillion in 2024 3% higher than pre-pandemic levels. The revenues are poised for further growth in 2025 & expected to increase by 3% to 5%. The Global Hospitality Industry is expected to continue growing in 2025, with a focus on recovery from the pandemic and the emergence of new trends like AI and sustainability. While growth will be uneven across regions, overall demand is anticipated to rise, particularly in urban markets and driven by group, business, and international travel. As per survey of travel professionals by the UNWTO Barometer Jan25 Confidence Index, 65% expressed stronger performance in 2025.

The World Travel & Tourism Council (WTTC) forecasts that 2025 will be a landmark year for the industry. The sectors global economic contribution is expected to reach a record breaking $11.7 trillion — up from $10.9 trillion in 2023 and $10.3 trillion in 2019. This represents a 6.7% increase over the previous year and a 13% rise compared to pre-pandemic levels. Moreover, travel and tourism are set to support 371 million jobs globally in 2025, surpassing employment levels seen before the pandemic.

The global hospitality market is projected to grow to $5717.43 billion in 2025 from $5384.78 billion in 2024, a CAGR of 6.2%.

The global hotel sector demonstrated remarkable resilience in 2024, with RevPAR growing 4% and demand reaching 4.8 billion room nights. Performance varied across regions, with APAC lagging behind 2019 levels while other regions fully recovered. Urban markets saw accelerated demand, driven by group, business, and international travel, with London, New York, and Tokyo expected to attract significant investor interest in 2025. As the industry enters 2025, it faces a unique inflection point. While leisure travel has been the primary driver of demand post-Covid, its expected to moderate as consumer savings contract. Group, corporate, and international travel are anticipated to accelerate, fuelling 3-5% global RevPAR growth. Performance will remain uneven across regions, with APAC likely seeing the largest growth due to recovering Chinese travel. Urban markets are poised for a surge in performance, with London, New York, and Tokyo likely to attract significant investor interest. JLL projects 15-25% growth in global hotel investment volume catalysed by impending loan maturities, deferred capex, and private equity fund-life expirations.

Indian Hospitality and Tourism Industry FY 2024-25:

FY 2024-25 marked another landmark year for Indian tourism, driven by strong fundamentals such as a youthful population, rising employment, growing disposable incomes, and solid domestic demand. Improved infrastructure, greater connectivity, and increased investments have further accelerated the sectors momentum. The Union Budget 2025-26 allocated Rs. 2,541 crore ($291 million) for the tourism sector, with a focus on infrastructure upgrades, skill development, and easing travel. Key initiatives include the development of 50 leading tourist destinations, improved transport connectivity, and expanding the e-visa programme. As of December 2024, e-visas are available to citizens from 167 countries under 9 categories — making travel to India simpler and more accessible. The Ministry of Tourism advanced its flagship schemes such as Swadesh Darshan, PRASHAD, UDAN, and Dekho Apna Desh, encouraging regional and cultural tourism. This year also saw major strides in airport infrastructure, with 10 new greenfield airports becoming operational bringing the total count to 159 by the end of December 2024. Large scale projects at Noida (Jewar) and Navi Mumbai are nearing completion and are set to open in 2025.

Foreign tourist arrivals reached 9.7 million in 2024 as against 9.23 million in 2023. This years arrival denoted a recovery of 88% of the 2019 high of 10.9 million, signalling steady progress toward full recovery. Outbound travel, on the other hand, surged ahead, with 30.2 million Indians travelling abroad in 2024 — 12% above pre-COVID levels. Domestic air travel remained strong, growing by 6% to 161 million passengers and surpassing 2019 figures by 12%. Key demand drivers included leisure travel, weddings, business events, and corporate travel.

According to the India Hotel Market Review 2024 by Horwath HTL, national occupancy stood at 63.9% for 2024 as compared to 62.1% in 2023. While the occupancy is still marginally below the 2019 level of 64.5%, Revenue per day was 82% higher than 2019 indicating market growth both in terms of capacity and size. The average daily rate (ADR) rose to Rs.7,951, marking a 7.5% y-o-y increase and revenue per available room (RevPAR) rose to Rs. 5,078, marking 10.7% year on year increase. Udaipur reported highest ADR followed by Mumbai and then by Goa and New Delhi highlighting the continued demand for premium destinations.

According to Horwath HTLs India Hotel Market Review 2024, around 14,400 rooms across 169 hotels were added in 2024, taking the total supply of branded hotel rooms to approximately 2,00,000. Notably, over two-thirds of these additions were in emerging destinations beyond the top 10 markets, indicating growing depth and diversification in Indias hospitality landscape.

OUTLOOK FOR INDIAN HOSPITALITY INDUSTRY FOR FY 2025-26

The Indian hotel industry has promising outlook for 2025 based on strong fundamentals of sustained domestic travel, infrastructure upgrades, and rising interest from international markets. Sustained economic growth, rising disposable incomes, and evolving travel aspirations especially among millennials and Gen Z are fuelling demand for both leisure and business stays. The demand is further boosted from tier-2 and tier-3 cities, driven by improved air connectivity, the rise of hybrid work models, renewed interest in historic pilgrimage destinations and state-level initiatives promoting tourism circuits. The evergreen demand for destinations for weddings, strong M.I.C.E activity (Meetings, Incentives, Conferences and Exhibitions) surrounding large state of the art conventions centres are providing a strong impetus to growth. As per estimates, demand for branded hotel rooms in India is expected to continue outpacing supply growth which remains moderate. As per Horwath HTL, the industry has a pipeline of 1,05,000 branded rooms expected by 2029 subject to some slippages. Indias hospitality industry presents a significant potential for market penetration with just 0.1 branded room inventory per 1,000 people.

While risks of Tariff war and global geopolitical tensions is running at new highs, the governments continued support through tourism-friendly policies, infrastructure spending, and ease-of-travel initiatives are expected to keep the sector on a stable growth trajectory and the Indian hotel industry is well-positioned for a strong and sustainable performance in 2025 and beyond. Hotels are increasingly focusing on health and wellness offerings, integrating fitness programs, mental health initiatives, and personalized wellness experiences. Adoption of AI-powered service automation, smart guest experiences, touchless check-ins, and wireless mobility for staff are becoming more prevalent. The rise of leisure travel (combining business and leisure) is creating new opportunities for hotels.

The Indian hospitality sector is projected to grow at a CAGR of 10-12% from 2024 to 2025, reaching a market size of USD 55 billion by 2025.The global hospitality market is expected to grow from $5384.78 billion in 2024 to $5717.43 billion in 2025, with a CAGR of 6.2% .Indias hotel market is projected to reach USD 9.13 billion in 2024, with revenue expected to grow at a CAGR of 5.4% from 2024 to 2028, reaching USD 11.27 billion by 2028.

OPPORTUNITIES & THREATS OPPORTUNITIES

The hospitality industry faces both significant opportunities and challenges. Opportunities include leveraging technology for personalization and efficiency, capitalizing on emerging trends like sustainability, and attracting environmentally conscious travellers.

- Digitalization and Technology:

Embracing technology offers opportunities to enhance guest experiences, streamline operations, and improve efficiency.

- Sustainability:

Focusing on eco-friendly practices can attract environmentally conscious travelers and reduce operational costs.

- Personalization:

Tailoring services and experiences to meet individual guest needs and preferences can lead to increased satisfaction and loyalty.

- Niche Markets:

Targeting specific segments of the market with unique offerings can create opportunities for growth.

- Expansion:

The hospitality industry offers huge opportunities for growth and development, with a wide range of career paths available.

THREATS:

The hotel industry stands as a testament to adaptability and resilience in the face of a rapidly changing world. Faced with a diverse array of global challenges, from cybersecurity and economic volatility to pandemics and supply chain disruptions, hotels have demonstrated their capacity to evolve and thrive. By embracing innovative strategies, sustainability practices, and a commitment to guest well-being, they continue to provide exceptional experiences for travelers worldwide, promising a bright future amidst the uncertainties of our times.

- Cybersecurity Concerns:

In todays interconnected digital landscape, hotels face an escalating spectrum of cyber threats that reach far beyond mere data breaches. These threats encompass a range of potential risks, including sophisticated cyberattacks that can compromise guest privacy, tarnish the hotels reputation, and disrupt overall operations.

- Geopolitical Instability:

Geopolitical tensions, international conflicts, and diplomatic uncertainties can significantly affect tourism patterns. Hotels in regions prone to political instability may face fluctuations in occupancy rates and international arrivals.

- Economic Volatility:

Fluctuations in currency exchange rates, inflation, and economic crises can impact travelers purchasing power and destination choices. Hotels may experience variations in demand and revenue due to these economic uncertainties. Travelers may be more cost-conscious, affecting their choices of accommodations and travel plans.

- Climate Change and Environmental Concerns:

Increasing awareness of climate change and environmental sustainability has led travelers to prioritize eco-friendly accommodations. Hotels are pressured to adopt green practices, reduce carbon footprints, and implement energy-efficient technologies.

- Pandemics and Health Crises:

Pandemics and health crises, exemplified by events such as the COVID-19 pandemic, can have a profound and lasting impact on the hotel industry. These situations often lead to reduced travel, lockdowns, and heightened health and safety concerns, disrupting the normal flow of operations and guest expectations.

- Regulatory Changes and Compliance:

Regulatory changes, including new health and safety requirements and tax regulations, have a substantial impact on hotel operations. Health and safety mandates necessitate operational adjustments, while tax regulations introduce financial complexities. Compliance is crucial not only for legal reasons but also to maintain guest trust and ensure business sustainability.

- Supply Chain Disruptions:

When global supply chains face disruptions, whether due to natural disasters or events like a global pandemic, hotels encounter multifaceted challenges. These include sourcing essential supplies, sustaining operational efficiency, and managing costs effectively.

MITIGATION

We are constantly working on excelling the customer delight and expanding our reach through our quality of service, our amenities, our food, the affordability of our offerings and value-addition. Targeting non-traditional demand, bringing in operational efficiencies, rationalising costs across major expense heads, bringing down material procurement costs, improving occupancy levels and ARR, have been some of the prominent measures taken by the Company in order to mitigate the threats. We undertake continual repairs & maintenance to the assets to provide excellent hospitality experiences. We also have a continual risk management framework to ensure competitive advantages, business continuity & minimise adverse impact on business objectives.

INTERNAL CONTROL SYSTEMS & ITS ADEQUACY

We have well established policies & procedures for internal control of operations and activities that ensures that all the assets are protected against loss from unauthorized use or disposition and all transactions are recorded and reported in conformity with Generally Accepted Accounting Principles. Entire work force is integrated to work in unison to achieve laid down service and efficiency standards. We have an internal control system with checks and balances pertaining to key operations that ensures maximum compliance to norms and regulations required by the regulatory authorities across various aspects of the business and also supports continuous monitoring & corrective actions to be taken. The Audit Committee periodically reviews the audit findings & recommends corrective action to the Board as and when required.

BUSINESS OVERVIEW

The Company operates out of its single standalone property located at Chembur, Mumbai. The Companys hospitality offerings are marked by its service and exclusive vegetarian food at its restaurants and banquets which finds strong endorsement from its customers. The Company has successfully captured the increased business traffic buoyed by positive economic outlook and looks forward to strengthening it further. The Company has continued to adhere to specific Health and Hygiene mandates of the local government and authorities and rationalised its operations accordingly. The Company has continued to follow its growth targets in line with asset light expansion strategy.

FINANCIAL PERFORMANCE

For the FY 2024-25, Revenues from operations were Rs.1523.29 lakhs, less by 8.20 % over FY 2023-24 and EBIT for FY 2024-25 was Rs. -1079.84 lakhs as compared to Rs. -973.17 lakhs for FY 2023-24. The Company registered good growth in business as economies opened up, travel restrictions were removed and pent- up demand for travel and celebrations got released. The Company has improved its operational efficiency.

SEGMENT WISE PERFORMANCE

The Company has ventured into a new segment of business by establishing a real estate division. In the year 2024-25 the company has covered major ground at the grass root level in order and has taken significant steps to activate the operations in this segment. As the operations are yet to kickstart there is no revenue from this segment for the year 2024-25 but the Company is confident that the division will start showing results from FY 2025-2026.

OUTLOOK & STRATEGY

Sustainability has transitioned from a niche initiative to a core strategy within the hospitality sector. Notable developments include:

Energy Efficiency: A significant majority of hotels have adopted LED lighting and smart thermostats, leading to substantial energy savings.

Waste Reduction: The elimination of single-use plastics and the implementation of food waste tracking systems have become standard practices, contributing to environmental conservation efforts

Sustainable Sourcing: Hotels are increasingly sourcing locally produced, organic ingredients, aligning with guests growing preference for eco-friendly options.

These initiatives not only reduce environmental impact but also enhance brand reputation and appeal to environmentally conscious travelers.

Artificial Intelligence (AI): AI-powered chatbots and virtual assistants are streamlining bookings, handling guest inquiries, and providing personalized recommendations, leading to improved efficiency and customer satisfaction

Smart Rooms: Hotels are offering rooms equipped with voice-controlled lighting, app-based controls, and in-room fitness solutions, providing guests with a customized and convenient stay.

Automation: Self-service kiosks and mobile check-ins are becoming standard, reducing wait times and enhancing the overall guest experience.

HEALTH & SAFETY

We adhere to all safety protocols and rules and regulations set by the regulatory authorities as regards fire, building safety, sanitation, COVID-19 protocols and garbage disposal. We are committed to providing a safe and conducive work environment to our people. Designing and implementation of Health & Safety protocols is one of the important items on agenda across all our decision-making processes.

FOOD SAFETY, HYGIENE AND CLEANLINESS

The Company is constantly monitoring adherence to FSSAI guidelines and standards. We conduct periodic trainings for our staff to apprise them of the importance of following the standards. We also make use of newer technologies and processes for water recycling, waste management and garbage disposal.

HUMAN RESOURCES

The Company believes that our people are our greatest asset. Our loyal and skilled staffs enable us to withstand the challenges and grow in a highly competitive and dynamic industry. We strive to develop teams that are fully involved in their work and empower them to achieve new milestones in customer satisfaction and experience. They are constantly guided by the Companys philosophy of A Service Approach to Growth. We recognise the criticality of human resource and ensure a conducive work environment that helps learning and growth of individuals that in turn will enable achieving the Organisational Objectives.

CAUTIONARY STATEMENT

Information in the management Discussion and Analysis describing the Companys projection, estimates, expectations or predictions, may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ significantly from those expressed or implied in the statement. Important factors that would make a difference to the Companys operations include slowdown in Indias economic growth, inflation, war, change in Government Regulations, tax laws and other factors such as litigations and labour relations.

For and on behalf of the Board
Emerald Leisures Limited
SD/-	SD/-
Rajesh Motilal Loya	Nikhil Vinod Mehta
Whole Time Director & CFO	CEO & Director
DIN: 00252470	DIN - 00252482
Date: 06.09.2025
Place: Mumbai