Espire Hospitality Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS

EHL is steadfast in its vision to establish a strong footprint in the hospitality industry by curating world-class hotels and resorts. With a commitment to redefining luxury and delivering personalized, guest-centric experiences, the Company aspires to set new benchmarks in ultra-luxury hospitality and create destinations that inspire unforgettable memories.

This Management Discussion and Analysis ("MDA") Report presents an overview of the operational and financial performance of the Company. It also discusses the opportunities, Espire Hospitalitys strategy and important initiatives taken by it during the year.

Industry structure & developments

Global Economics

The International Monetary Fund (IMF) in its July,2025 edition of Work Economic Outlook mentioned that Global growth is projected to be 0.2 % higher than that in the reference forcast in the April,2025 World Economic Outlook (WEO) forecast, at 0.1 percent point higher for 2026 This reflects stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions.

IMF Analyzed is expected to decelerate, with apparent resilience due to trade-related distortions waning. At 3.0 percent in 2025 and 3.1 percent in 2026, the forecasts are below the 2024 outcome of 3.3 percent and the pre-pandemic historical average of 3.7 percent

IMF further forecasted that for global inflation is showing mixed signs. The global median of sequential headline inflation has increased a notch, but core inflation has eased considerably and is now below 2 percent

The International Monetary Fund (IMF) has upgraded Indias growth is projected to be 6.4 percent in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast

The IMFs latest ‘World Economic Outlook report indicates that Indias economic growth forecast for the current year has also been raised to 6.4 percent.

With this, India continues to maintain its position as the fastest-growing economy among emerging markets and developing economies.

The IMF report stated that The forecast for growth in emerging markets and developing economies has been revised upward; this increase is powered by stronger-than-expected front-loading in anticipation of higher tariffs; lower

Annual Report 2024-25

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Hospitality Sector Global Scenario

The global hospitality industry (including hotels, restaurants, travel & tourism) is valued at over USD 4.5 trillion.

Expected CAGR (2024 2029): ~7 8%, driven by international travel recovery, rising disposable incomes, and digital transformation.

Post-COVID Rebound: Leisure travel leading recovery; business travel still below pre-pandemic levels.

Luxury & Experience Economy: Growth in wellness tourism, boutique stays, adventure travel, and experiential dining.

Indian Scenario

Hospitality Sector in Indias is one among the major and fast-growing sector of the economy, with a market size valued at over $24 billion in 2024, expected to reach over $31 billion by 2029-2030

Key drivers include the growth of domestic leisure, business, and medical tourism, alongside a rise in international arrivals and government initiatives to develop tourism infrastructure and promote the sector.

Tourism in India for the Spiritual aspects increased multi-folds both by the National as well as by the International Tourists. Key factors driving this growth include cultural heritage, the governments focus on spiritual sites, social medias influence, improved infrastructure, and the rising interest of younger generations like millennials and Gen Z in mindfulness, yoga, and meditation.

Ram Mandir has recorded over 110 million visitors since inaugurations in 2024,

Tourism in India for the Weddings has also increased multifold, because of the rich indian culture and diverse destinations to attract International and Domestic couples , there is a significant boom raised in the destination weddings .Governments Initiative of ‘Wed In India" is an aim for the growth of this sector

The Company, during the financial year 2024-25, has achieved various milestones:

The company achieved its highest-ever revenue of Rs. 12,016.18 Lakhs, registering a substantial 230% growth as compared to Financial Year 2023-24.

The company achieved its highest-ever EBITDA of Rs. 2,307.55 Lakhs for the Financial Year 2024-25, a 206% surge as compared to Financial Year 2023-24.

The company achieved ecorded its highest-ever PAT of Rs. 829.64 Lakhs, registering an impressive growth of 224% as compared to Financial Year

2023-24.

As part of a strategic tie-up, the company entered into a business consolidation with Espire Resorts Private Limited, to bring the renowned Six

Senses brand under its fold. This has positioned the company as a leader in the luxury segment. This strategic alliance introduces the magnificent Fort Barwara to Espire Hospitalitys portfolio, while Six Senses continues to manage the resorts operations.

The company registered a significant stride in its growth journey with the addition of three new properties to its portfolio during FY25 Zana by the Ganges, Rishikesh, Country Inn Premier, Amritsar, and Country Inn Anant, Ayodhya collectively adding 200+ keys to its inventory.

On the operational front, Espire Hospitality reported an Average Daily Rate (ADR) of Rs. 13,822 for the Financial Year 2024-25, a 117% increase compared to Financial Year 2023-24, and significantly surpassing the industry average of Rs. 8,175 for the same period (Source: HVS Anarocks Hospitality Monitor, India).

The companys Revenue Per Available Room (RevPAR) stood at Rs. 8,051 for the Financial Year 2024-25 reflecting a 168% increase as compared to Financial Year 2023-24 and again outperforming the industry average of Rs. 5,326 for the same period (Source: HVS Anarocks Hospitality Monitor,

India).

Future Prospects

On the business development front, the Company is aggressively scaling its presence with a robust pipeline of new hotels in Ghaziabad, Vrindavan,

Mussoorie, Navi Mumbai, Gurugram, Lucknow, Amritsar, and Bengaluru collectively adding nearly 700 keys to the portfolio. In addition, advanced negotiations are underway for over 20 properties across 14 high-potential destinations, which are expected to contribute more than 1,000 keys in the coming year. Our ambitious expansion roadmap for the next 2 3 years is designed to establish a formidable footprint across both culturally significant and emerging destinations. Beyond physical expansion, our vision is to curate a distinguished collection of properties that not only elevate the hospitality experience but also celebrate the diverse cultural heritage of India.To capture demand across varied traveler segments, we are strategically pursuing growth in prominent business hubs such as Mumbai, Ahmedabad, Chennai, Bengaluru, Lucknow, Amritsar, Bhopal, Jaipur, Gurugram, Ranchi,

Chandigarh, Pune, and Noida tapping into the growing mobility of corporate and business travelers. Simultaneously, we are deepening our presence in spiritual and religious circuits, including Rishikesh, Puri, Varanasi, and Haridwar, in line with the rising trend of spiritual and experiential tourism. Parallelly, we are exploring opportunities in leisure destinations such as Sikkim, Dehradun, Goa, Ootacamund, Dharamshala, and McLeodganj to cater to travelers seeking immersive, nature-centric retreats.

Strategically, the company is in the advanced stages of finalizing a proposal to merge an associate company with a sizeable land bank at a prominent location, subject to necessary approvals from the Board and Shareholders in next few quarters .

Threats, Risks and Concerns

Espire Hospitality ‘s risk management framework consists of identification of risks, assessment of their nature, severity and potential impact and measures to mitigate them. This framework is in place for adequate and timely reporting and monitoring. Risks are reviewed periodically and updated to reflect the business environment and change in the size and scope of the Companys operations. The Company has a Risk Management Committee consisting of three Independent Directors.

Segment wise or product wise performance

The company deals in only one segment namely hotel and resorts, accordingly the requirements of Ind AS-108,are not applicable .

Internal Control Systems & their adequacy

The company has placed adequate and effective system of internal controls, which are wisely commensurate with the nature of business and its scale of operations. Reviews of the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards including any changes in that is a regular course of action of the companys Audit committee.

The Statutory Auditors of the Company have also, in their report to members for the financial year ended on 31^st March 2025, confirmed the adequacy of internal control system of the Company.

Discussion on financial performance with respect to operational performance

The Financial Statement for the financial year ended on 31st March, 2025 have been prepared in compliance of the provisions of the Companies Act, 2013 and applicable Indian Accounting Standards issued by the Institute of Chartered Accountants of India (Ind AS). The Board of Directors accepts the integrity and objectives of these financial statements. During the year under report, your company has recorded revenue of Rs 12018.18 Lacs in financial year 2024-25 as compared to Rs 3636.31 Lacs in financial year 2023-24. The Company has incurred a net profit of Rs. 819.13 Lacs as compared to net profit of Rs 256.18 Lacs recorded in the last financial year.