Grand Continent Hotels Ltd Management Discussions

1. Overview

Financial Year 2025-26 (FY2026) marks a defining inflection point in the evolution of Grand Continent Hotels Limited (GCH or the Company). Having successfully executed its NSE SME IPO in March 2025, the Company entered FY2026 as a publicly listed entity with a strengthened balance sheet, a significantly expanded portfolio, and a sharpened strategic agenda. The year was characterised by disciplined portfolio build-up, continued asset-light expansion, and meaningful operational leverage collectively reinforcing GCHs credentials as one of Indias most dynamic and scalable mid-market hospitality platforms.

GCH operates at the intersection of three of Indias most structurally compelling travel segments business, spiritual, and leisure has systematically scaled its portfolio to serve each with precision. As on 31st March 2026, the Companys operational portfolio comprises 29 hotels across 14 cities in six Indian states, with a total of 1769 operational keys.

GCHs management remains steadfastly committed to creating long-term, compounding value for all stakeholders. The Companys asset-light, franchise-augmented operating model underpinned by strategic tie-ups with Sarovar Hotels and Royal Orchid Hotels alongside its proprietary Grand Continent brand - positions it uniquely to capitalise on Indias accelerating domestic travel wave, while maintaining capital efficiency and return discipline.

29 Operational Hotels FY2026 (as at Mar 31, 2026)	1,769 Total Keys Operational Portfolio	^ 140.54 Cr Revenue from Operations FY2026 (Consolidated)	68% Occupancy Rate FY2026 Full Year	15.71% EBITDA Margin FY2026

2. Global Economic Overview

The global economy demonstrated remarkable resilience through FY2026, confounding earlier pessimism around the cascading effects of geopolitical disruptions, US tariff escalations, and recessionary headwinds across major developed economies. The International Monetary Fund (IMF), in its January 2026 World Economic Outlook Update, held global growth projections steady at 3.3% for both 2025 and 2026 - representing an upward revision of 20 basis points relative to October 2025 estimates.

2.1 Key Global Macroeconomic Themes

Global growth has been underpinned by a tech-driven productivity boom, a more gradual-than-feared materialisation of tariff impacts, and easing financial conditions as inflation continued its downward trajectory. The IMF noted that the global economy has shaken off the immediate impact of the tariff shock, amid a tech-driven boom, while cautioning that risks from trade concentration, geopolitical tensions, and the uneven distribution of AI productivity gains remain elevated.

Region / Economy	GDP Growth FY2026 (est.)	Key Driver	Risk Factor
Global	3.3%	Tech productivity, easing inflation	Trade policy uncertainty
United States	2.4%	AI investment, consumer resilience	Labour market softening
China	4.5%	Export front-loading	Secondary city oversupply
Euro Zone	1.3%	Energy stabilisation	Weak industrial output
India	6.4%	Domestic consumption, capex	US tariff exposure

2.2 Global Travel and Hospitality Outlook

Global hotel performance in 2026 is characterised by a shift from volume-led recovery to yield-led discipline. ACE Dimensions, The Global Hotel Industry in 2026 indicates that RevPAR growth globally is expected to be modest at +1-2%, driven by ADR +1-2% rather than occupancy gains, which remain broadly flat in the high 50s to low 60s globally. This reinforces that 2026 is fundamentally a pricing-integrity year rather than a demand-expansion year for global hospitality.

Asia-Pacific stands out as the standout performing region globally. Markets such as India, Japan, Korea, and Vietnam continue to lead performance, with ADR growth of 2-3% and RevPAR expected to rise 3-4%. India in particular benefits from domestically anchored demand resilience a structural characteristic that sharply differentiates it from more mature Asia-Pacific peers such as Japan and South Korea, where growth is plateauing due to demographic headwinds and market saturation.

Cross-border tourism has recovered substantially, with UNWTO data indicating international arrivals approaching and, in some corridors, exceeding pre-pandemic levels. Indias share in global tourism flows has expanded meaningfully, driven by infrastructure investments, ease-of-travel reforms, and the rising global profile of Indian destinations.

Sources: IMF World Economic Outlook Update, January 2026; PwC Emerging Trends in Real Estate 2025; PACE Dimensions Global Hotel Industry 2026 Outlook

3. Indian Economic Overview

Indias macroeconomic trajectory in FY2026 has been one of exceptional resilience and accelerating momentum, cementing its position as the worlds fastest-growing major economy and the fourth-largest economy by GDP a milestone achieved in 2025 ahead of earlier projections. Indias GDP growth for FY2025-26 is estimated at 7.37.4%, surpassing the initial government projection range of 6.3-6.8%, driven by a powerful combination of robust private consumption, front-loaded government capital expenditure, GST rationalisation, and benign inflationary conditions.

3.1 GDP Growth - Consensus Forecasts

Institution	FY2026 GDP Forecast	FY2027 Forecast	Commentary
IMF (Jan 2026 Update)	7.3%	6.4%	Upward revision on Q3 outperformance
World Bank	7.6%	6.6%	Fastest-growing major economy in South Asia

3.2 Key Macroeconomic Drivers

Private Consumption

Private consumption accounting for approximately 61.5% of Indias GDP has sustained its momentum on the back of income tax rationalisation (Budget 2025-26), expanding formal employment, and a structural shift in household aspirations. Urban consumption has rebounded strongly, supported by a record corporate earnings cycle, while rural consumption has received a fillip from a strong Kharif and Rabi harvest season.

Government Capital Expenditure

Government capital expenditure remained front-loaded in FY2026, with significant allocations directed towards roads, railways, airports, and urban infrastructure. Indias airport count expanded from 157 in 2024 towards the governments target of 350-400 airports by 2047, with over 12 new airports operationalised and 30+ under active development in FY2026. This infrastructure push directly stimulates demand for mid-market hospitality in emerging corridors.

Inflation and Monetary Policy

Headline CPI inflation in India remained well-contained within the RBIs 2-6% tolerance band through FY2026, averaging approximately 1.7%, aided by softer commodity prices, the one-off effect of GST rationalisation, and stable food prices following consecutive good monsoons. The RBIs monetary policy remained accommodative-to-neutral, providing a supportive credit environment for the hospitality and services sector.

Indias Rising Middle Class and Discretionary Spending

Indias middle class is expected to expand from approximately 432 million in 2021 to over 715 million by 2031. This demographic upswell, characterised by rising incomes, greater travel aspirations, and increased propensity to spend on experiences over possessions, is among the most powerful structural tailwinds for the hospitality sector over the next decade.

Indicator	FY2024	FY2025	FY2026 (est.)	Outlook
GDP Growth	8.2%	6.5%	7.4%	Strong; above trend
CPI Inflation	5.4%	4.6%	3.21	Contained; below 4.5%
Forex Reserves	USD 646 Bn	USD 665 Bn	USD 693 Bn	Resilient
FDI Inflows	USD 71 Bn	USD 80.61 Bn	USD 94.52 Bn	Rising
Credit Growth (Banking)	16%	12%	13%	Moderating but healthy

Sources: NSO Advance Estimates FY2026; RBI Annual Report 2025-26; IMF World Economic Outlook; World Bank South Asia Economic Update; IBEF India Economic Overview

4. Indian Hospitality & Tourism Industry Overview

Unless otherwise stated, industry performance data in this section is sourced from Horwath HTL, India Hotel Market Review 2025 (data compiled with CoStar), February 2026.

4.1 Sector Positioning and Scale

Horwath HTLs India Hotel Market Review 2025 characterises 2025 as a year of continued, though externally tempered, growth for Indias branded hotel sector describing it as qualitatively more relevant, to the quantitatively strong preceding two years, with growth and buoyancy tempered by external events even as the underlying trajectory of demand-supply imbalance and market sentiment remained positive.

The sector recorded its largest-ever annual supply addition, with openings and conversions crossing 19,000 rooms (15,500 rooms net, after substantial deflags), while demand grew 9.6% to 133,000 rooms per day, continuing to outpace supply growth of 7.7% to 216,000 rooms per day. Sector consolidation gathered pace during the year, with acquisitions by IHCL across different segments including boutique hotels and wellness, the report notes that 45% of chain-affiliated inventory is now under India-listed company ownership or management, including 22% directly owned by these companies.

This growing institutionalization is reflected in listed-company financial performance and valuations. Aggregate revenue for listed hotel companies grew from ^215 billion in FY24 to ^272 billion in FY25 (with H1 FY26 revenue of ^138 billion at a 37% EBITDA margin), while listed-company market capitalisation has grown more than tenfold from ^239 billion in CY2015, to ^335 billion in CY2020, to ^2,420 billion in FY2025.

4.2 Indian Hotel Industry Performance & Outlook

Indias hotel sector recorded strong performance in 2025, supported by sustained domestic travel demand, improving room rates and continued expansion of branded hotel supply. According to Horwath HTLs India Hotel Market Review 2025, all-India hotel occupancy stood at 64% (up 1.1 percentage points year-on-year), while Average Daily Rate (ADR) reached ^8,624 (up 8.6%), resulting in RevPAR of ^5,522 (up 10.8%). Hotel demand increased by approximately 9.1% to 133,000 rooms per day, compared with supply growth of approximately 7.8% to 216,000 rooms per day indicating that demand continued to expand faster than available room supply, notwithstanding a year marked by external disruptions (the Maha Kumbh, Op Sindhoor, West Asia-related travel disruption, adverse weather, airline flight-duty- time-limitation disruptions and GST Impact).

Metric	2019	2023	2024	2025
Occupancy (%)	64.5%*	61%	63%	64%
ADR (K)	5,700	7,400	7,900	8,624
RevPAR (K)	3,700	4,500	5,000	5,522
Supply (rooms/day, 000)	151	186	200	216
Demand (rooms/day, 000)	95	109	122	133

*2019 occupancy shown is indicative; HHTL notes 2025 occupancy of 64% is only 0.5 percentage points below 2019, despite over 40% cumulative supply growth over the period. Source: Horwath HTL, India Hotel Market Review 2025.

4.3 Demand-Supply Dynamics

Indias hospitality market is witnessing continued expansion and diversification across both demand and supply. HHTLs analysis shows that transient demand remains dominant in major business markets (69 - 74% of demand in Mumbai, Delhi, Gurugram and Bengaluru), while group demand has a materially stronger presence in leisure markets such as Goa (29%) and Jaipur (33%), reflecting the weddings- and MICE-led nature of leisure destination demand.

On the supply side, 201 hotels comprising approximately 15,500 net rooms were added in 2025, with 41-43% of new supply originating in markets outside the top 30, highlighting the growing importance of emerging business, leisure and religious destinations. The market is also becoming more geographically diversified: the top 10 markets account for 56% of current supply but only 36% of the pipeline, while the Others category (over 400 markets, including most Tier 2/3 business, leisure and pilgrim destinations) accounts for just 27% of current supply but 42% of the pipeline a clear directional signal of where future growth is concentrated. By 2030, HHTL expects the upper-tier segments (Luxury, Upper Upscale) share of supply to rise from 55% to 56%, while the Midscale segment alone is expected to add approximately 26,000 rooms in absolute terms.

4.4 Segment-Wise Outlook

HHTLs 2025 segmental performance data confirms healthy rate and RevPAR growth across all tiers, with the broad Midscale/Economy segment recording the fastest RevPAR growth off a lower base, aided by strong demand growth as newer markets are absorbed into the branded fold.

Segment	Occupancy	ADR (K)	RevPAR (K)
Luxury - Upper Upscale	68.1% (-0.2 pts)	13,379 (+8.7%)	9,110 (+8.3%)
Upscale - Upper Midscale	65.9% (flat)	6,942 (+6.5%)	4,574 (+6.5%)
Midscale - Economy	56.7% (+2.9 pts)	4,049 (+10.0%)	2,294 (+15.9%)

Source: Horwath HTL, India Hotel Market Review 2025. Midscale-Economy figures include hotels managed under aggregator platforms; HHTL notes that excluding aggregators, 2025 occupancy, ADR and RevPAR for this segment would be higher, at 64.1%, ^4,666 and ^2,988 respectively.

Notably, the Luxury - Upper Upscale segment, while representing only 34% of supply, generates 56% of Indias rooms revenue and 36% of rooms demand underscoring the disproportionate value-creation potential of the upper-tier segment that anchors much of Indias branded hotel economics.

4.5 Key Demand Segments - GCHs Three-Pillar Market Thesis

GCHs portfolio and expansion strategy is built around three structurally resilient and complementary demand pillars Business, Spiritual (Pilgrimage) and Leisure & Wellness tourism. HHTLs India Hotel Market Review 2025 independently validates the strength, scale and growth trajectory of each of these three pillars, as summarised below.

Pillar I - Business Travel

HHTL identifies business travel as a key driver of the demand-supply imbalance in Indias hotel sector in 2025, supported by widening demand, newer markets, GCCs and data centres, rate confidence and the return to work-from- office. The report also flags trade deals as a positive catalyst for manufacturing, services and inbound business travel, and notes that metro cities with limited supply addition over the past 15 years are likely to see demand absorb, and in some cases encourage, new hotel supply.

This view is supported by market-level performance. The Top 10 Markets - Mumbai, Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Ahmedabad, Pune, Goa and Jaipur - recorded occupancy of 69.8% (+1.3 percentage points), ADR of ^9,711 (+10.9%) and RevPAR of ^6,781 (+13.1%) in 2025, comfortably outperforming the all-India average. Several business markets outside the traditional top metros delivered some of the years strongest gains:

- Chennai - highest-ever occupancy of 74.9% (+10.2 percentage points YoY), ADR crossing ^8,000 for the first time, and RevPAR growth of 16.9%.

- Pune -described by HHTL as the best-performing non-metro business city, with 70.5% occupancy and ADR of ^7,000; Luxury- Upper Upscale ADR stood at ^10.5k.

- Ahmedabad - occupancy improved to 69.9% after three years of mid-60s stagnation, with supply and demand increasing by 70% and 94%, respectively, since 2019.

- Indore -occupancy reached 76.5%, with HHTL identifying the city as a growing business market and a potential target for GCCs and the IT sector.

- Coimbatore - occupancy reached 75.5%, displacing Delhi from fourth rank nationally on occupancy.

Structurally, the Upscale-Upper Midscale segment remains the workhorse of Indian business-hotel demand. With a 38% share of national supply, the segment posted steady RevPAR growth of 6.5%. HHTL notes that its 74% pipeline growth will require deeper demand creation for absorption, supported by the ongoing manufacturing and services- sector push. GCH is well aligned with this opportunity, with 10 hotels in Bengaluru, two in Chennai, four in Hyderabad and one in Gurugram, along with a pipeline of two hotels in Bengaluru, one in Chennai and one in Gurugram.

Pillar II - Spiritual (Pilgrimage) Tourism

HHTL notes that pilgrimage travel, driven by faith and customary obligations, sustains demand across market cycles, subject mainly to security considerations. The report identifies Haridwar, Varanasi and Tirupati as pilgrimage markets that attract even upper-strata travellers, creating scope for upper-tier hotels alongside a broad base of Midscale/Economy-led pilgrim markets across India.

HHTL data indicates that pure-play pilgrimage destinations typically achieve occupancy of around 60% to 65%, while Tirupati, supported by incremental MICE and wedding demand, can reach the 70% range. Chain-affiliated hotels are gaining share from independent midscale and unbranded accommodation as religious destinations increasingly attract upper-strata travellers seeking longer stays that combine temple visits with leisure. The segment is also becoming more hybrid, with leisure, weddings and MICE demand: resorts along the Ganges command premium ADRs, while Puri (Odisha), Dharamshala and Rishikesh have successfully built leisure positioning around a pilgrimage core.

Supply remains materially under-penetrated relative to visitation. HHTL identifies a pipeline of approximately 19,500 rooms across pilgrimage destinations, with many high-footfall locations still unserved or under-served by branded hotels. The report cites the 2025 Maha Kumbh at Prayagraj, which drew an exceptionally large national turnout despite limited chain-affiliated supply, as evidence of latent unmet demand and the value of tented accommodation and flexible seasonal formats in capturing pilgrimage peaks. Ayodhya, following the temple opening, and Puri, where chain-affiliated supply has grown from 668 rooms to 2,500 since 2020, further demonstrate the segments growth runway. GCH is already present in Dwarka, Tirupati and Rameswaram, with Ayodhya, Somnath and Vrindavan in the pipeline, positioning the company to participate directly in this expanding pilgrimage-led opportunity.

Pillar III - Leisure and Wellness Tourism

HHTL notes that leisure continues its upward path, also seeking new destinations, citing the growing popularity of travel to game parks (while cautioning that this is fundamentally a leisure trip with game-viewing as a prime activity rather than the primary motivation, and that supply should be balanced against carrying capacity). The report separately identifies wellness as a massive need, as a specialised product and not just an upgraded spa, and flags weekend getaways from business cities as key. but scant in offer and consistency. It further identifies the North-East, Odisha, Andhra Pradesh and Madhya Pradesh, together with religious destinations, as regions with meaningful growth potential relative to current supply.

HHTLs Key Leisure Markets basket (Rajasthan, Kerala, Goa, Himachal Pradesh, Uttarakhand, Agra and Amritsar) recorded occupancy of 56.4% (+0.9 pts), ADR of ^9,539 (+3.5%) and RevPAR of ^5,378 (+5.1%) in 2025, with demand growth of 12.8% outpacing supply growth of 11% per day despite headwinds the report attributes to demand diversion to the Maha Kumbh, Op Sindhoor-related group cancellations, adverse weather, and West Asia-related disruption to cross-border travel. Within this basket:

- Jaipur - occupancy of 65.6% (+2.9 pts), market-wide ADR of ^9.6k, Lux-UpperUp ADR of ^16.2k

- Udaipur - highest market-wide ADR in India at ^15.9k (Lux-UpperUp resort ADR of ^25.7k), driven overwhelmingly by destination weddings

- Agra - occupancy crossed into the 70s (70.7%) for the first time, with Lux-UpperUp RevPAR growth of 9.8%

- Hills of Leisure (Himachal Pradesh, Uttarakhand and similar hill destinations) demand has grown 10x between 2014 and 2024 (matching 9.5x supply growth), with Lux-UpperUp ADRs rising from ^13.3k to ^20k.

HHTL notes that leisure demand continues to diversify into new destinations, including wildlife and game-park tourism, wellness described as a massive need requiring a specialised product rather than simply an upgraded spa and weekend getaways from business cities. The report also highlights emerging state-level opportunities in the North-East, Odisha, Andhra Pradesh and Madhya Pradesh, where chain-affiliated supply remains limited relative to underlying tourism potential. This diversification directly supports GCHs strategy of capturing leisure and wellness demand ahead of the market in high-potential, under-supplied Tier 2 and emerging leisure geographies. GCH currently has two hotels in Goa and one hotel each in Udaipur, Mysore and Mahabalipuram, positioning it to benefit from the continued broadening of Indias leisure and wellness travel market .

Summary 2025 Performance Across GCHs Three Demand Pillars

Pillar	Representative HHTL Basket	2025 Occupancy	2025 ADR (K)	YoY RevPAR Trend
Business	Top 10 Markets	69.8%	9,711	+13.1%
Spiritual / Pilgrimage	Pure-play pilgrim centres	60-65%*	n/a (varies by market)	Structurally resilient demand
Leisure & Wellness	Key Leisure Markets	56.4%	9,539	+5.1%

*Pilgrimage occupancy is indicative of pure-play pilgrim markets per HHTL commentary; Tirupati and select hybrid pilgrimage-MICE markets can reach the 70% range. Source: Horwath HTL, India Hotel Market Review 2025.

Taken together, the performance data reported by Horwath HTL across all three baskets Business, Spiritual/Pilgrimage and Leisure & Wellness shows demand growth outpacing supply growth at the all-India level in 2025, consistent with the demand-supply imbalance the report describes as a defining feature of the current market.

5. Financial Performance and Ratio Analysis

GCHs financial performance in FY2026 reflects the tangible fruits of the operational ramp-up and portfolio Build up that followed its landmark expansion cycle. Having commissioned 9 new hotels in FY2026 taking the portfolio from 20 to 29 hotels. FY2026 has been a year of stabilisation, yield enhancement, and financial consolidation. The Companys clean balance sheet, post the aggressive debt paydown from IPO proceeds, provides meaningful headroom for growth capital deployment without compromising financial prudence.

5.1 Consolidated Income Statement Summary

Particulars (K Lakhs)	FY2024-25	FY2025-26	YoY % Change
Revenue from Operations	7,262.17	14,053.83	93.52%
Other Income	61.61	246.72	300.48%
Total Income	7,323.77	14,300.55	95.26%
Food & Beverages Cost	632.34	1,007.40	59.31%
Lease Rentals	1,413.54	3,654.00	158.50%
Employee Benefits Expense	1,247.17	2,719.52	118.06%
Depreciation & Amortisation	147.70	493.76	234.30%
Finance Costs	509.54	291.28	-42.84%
Other Expenses	2,051.10	4,123.71	101.02%
Total Expenses	6,001.39	12,877.26	114.57%
EBITDA	1,979.62	2,208.32	11.55%
EBITDA Margin	27.26%	15.71%	-42.35%
PBT	1,322.38	1,423.29	7.63%
PAT (after minority interest)	1,063.80	1,240.81	16.64%
EPS - Basic (^)	5.73	4.98	-13.17%

Income

The Gross Revenue of the company increased by 95.26% percent from Rs. 73.23 Cr to Rs. 143.00 Cr in FY 2026.

- Operational revenue increased from Rs. 72.62 Cr to Rs. 140.53 Cr was due to increase in operating inventory from 956 Keys to 1769 Keys with opening of new hotels. The number of operating hotels increased from 20 in FY25 to 29 at end of FY26.

- ARR of the company grew from Rs. 3,830 in FY 25 to Rs. 3,968 in FY26.

- Occupancy in FY26 was at 68% versus 61% in FY 25. The change in occupancy was on account of new hotel openings / increase in inventory in the second half of the year. Inventory grew from 956 Keys to 1769 Keys. Of this 547 Keys went live in H2 period. These keys did not achieve operational efficiency within the fiscal year. While the 956 keys delivered optimal occupancy and revenues, the new properties caused the enterprise occupancy to drop / improve.

- Other Income increased by 300% to Rs. 2.47 Cr in FY26, driven by Foreign and Interest gain.

Expenses

Total Expenses of the company increased by 114.57% percent to 128.77 Cr in FY26 versus 60 Cr in FY25. The increase

in cost was largely attributable to business expansion of the company as compared to the previous year.

- Food and Beverages Consumption increased by 59.31% to ^ 10.07 Cr in FY26 v/s ^ 6.32 Cr in FY25 in line with increase in turnover and higher consumption for premium/leisure properties.

- Lease rent in FY 25-26 has increased due to the signing and commencement of 10 new hotels and increase in lease rent of existing properties as per agreements.

- Employee Benefit Expenses increased by 118.06% percent to ^ 27.19 Cr from Rs. 12.47 Cr in FY25 driven by increase in headcount to 875 from 626 with increase in the number of hotels and expansion of corporate teams.

- Other expenses comprising of Power and Fuel costs, administrative costs, commissions increased by 101.02% to Rs. 41.23 Cr in FY26 versus Rs. 20.51 Cr in FY25 in line due to increase in number of operating hotels and in line with turnover.

- The Earnings Before Interest, Tax and Depreciation (EBITDA) of the company grew by 11.55% to ^ 22.08 Cr in FY26 from ^ 19.79 Cr in FY25.

- Depreciation & Amortisation increased to ^ 4.93 Cr in FY26 from ^ 1.47 Cr in FY25 from capitalization expenses incurred during the year, primarily on account of business expansion and refurbishment of existing properties.

- The companys net worth increased to ^ 119.42 crore.

- Overall Debt increased due to expansion of Business with new properties to ^ 37.05 Cr in FY26 from ^ 11.08 Cr in FY25.

5.2 Operational KPIs - Three-Year Trend

KPI	FY 2023-24	FY 2024-25	FY 2025-26
Operational Hotels (year-end)	12	20-21	29
Total Operational Keys (year- end)	532	956-1,000	1,769
Average Room Rate (^)	3,410	3,830	3,968
Occupancy Rate (%)	66%	61%	68%
RevPAR (^)	2,499	2,464	2,685
Headcount	407	626-700	875

The occupancy recovery from 61% in FY2025 to approximately 67-68% in FY2026 is a critical operational milestone.

5.3 Financial Ratios

Financial Ratio	FY2024-25	FY2025-26	Variance	Commentary
Current Ratio	4.27	1	-76.50%	Supporting working capital requirements & business expansion activities
Debt-Equity Ratio	0.10	0.30	203.35%	Business expansion initiatives, capital investments & other growth-oriented requirements
Debt Service Coverage Ratio	0.41	0.48	17.48%	Improvements in companies operating performance
Return on Equity (%)	10	8.54	-14.60%	-
Net Profit Ratio (%)	18.68	8.39	-55.06%	Higher operating & other expenses relating to growth
Net Capital Turnover (x)	2.54	6.14	141.75%	IPO proceeds utilised for Debt repayment & business growth purpose

6. Opportunities and Growth Drivers

6.1 Indias Structural Travel Boom

Indias domestic air passenger traffic exceeded 161 million in FY2024-25 and is growing at 6 - 8% annually. The governments ambitious airport expansion plan - targeting 400 airports by 2047 from 157 in 2024 - is systematically opening new demand corridors for mid-market hospitality in previously underserved Tier 2 and Tier 3 destinations. Each new airport operationalisation historically creates demand for 500 - 2,000 new branded hotel rooms in the catchment within 3-5 years.

6.2 Underpenetrated Mid-Market Segment

Indias branded mid-market and midscale segment remains significantly underpenetrated relative to its structural demand potential. Of Indias approximately 5 million hotel rooms, fewer than 200,000 are in branded properties - leaving over 96% in the unorganised, unbranded segment. The ongoing formalisation of Indias hospitality sector, accelerated by post-GST compliance requirements and traveller preference for standardised experiences, is driving a multi-year shift towards branded accommodation. GCH is uniquely positioned to capture this branded migration in the mid-price tier.

6.3 Spiritual and Religious Tourism Pipeline

The governments ongoing investment in spiritual circuit development - through the Prashad and Swadesh Darshan schemes - represents a pipeline of demand creation for GCHs spiritual segment properties. The Ram Mandir consecration in Ayodhya (January 2024) has already catalysed a step-change in religious tourism to the Purvanchal region, with visitor counts projected to exceed 50 million annually. GCHs pipeline includes properties in emerging spiritual destinations where supply remains acutely short relative to rising demand.

6.4 International Expansion Optionality

GCHs management has articulated a medium-term ambition to establish a presence in select international markets - particularly in South and Southeast Asia - where the mid-market segment is underserved and where Indias diaspora creates a natural demand base. While international expansion remains a FY2028+ priority, the Companys proven asset-light model and operational playbook are directly transferable to comparable international markets.

6.5 Government Policy Tailwinds

Multiple government policy initiatives create a constructive operating environment for GCH:

- Tourism Infrastructure Development: National Infrastructure Pipeline includes hospitality and tourism as priority sectors.

- Dekho Apna Desh: Domestic tourism promotion initiative driving awareness of Indian destinations.

- UDAN Scheme: Regional air connectivity expansion opening new Tier 2 and Tier 3 demand corridors.

- Swadesh Darshan 2.0: Development of thematic tourist circuits across spiritual, ecological, and heritage themes.

- E-Visa Liberalisation: Expanded e-visa access for international tourists across 169 countries.

6.6 Technology-Enabled Scalability

GCHs investment in technology infrastructure positions it to scale efficiently without proportionate increases in overhead. AI-driven operations spanning revenue management, energy optimisation, maintenance prediction, and guest personalisation are expected to deliver 150-250 basis points of margin improvement at portfolio level over the next three years, consistent with industry experience documented by PwC and global hospitality consultants.

7. Risks and Concerns

GCHs risk management framework identifies, monitors, and mitigates risks across strategic, operational, financial, and regulatory dimensions. The Board and Management continuously evaluate the risk landscape and implement appropriate safeguards to protect stakeholder value.

7.1 Risk Matrix

Risk Category	Risk Description	Likelihood	Potential Impact	Mitigation
Demand Volatility	Economic slowdowns, health crises, or geopolitical events reducing travel demand	Medium	High	Diversified segment exposure; flexible operating leases; cash reserves
Competitive Intensity	New supply from established chains and unbranded operators in target markets	High	Medium	Brand strength; loyalty programmes; superior locations; quality differentiation
OTA Dependency	High OTA commission exposure compressing net RevPAR	Medium- High	Medium	Direct channel development; corporate account deepening; loyalty programme
Lease Escalation Risk	Contractual lease escalations outpacing revenue growth	Medium	Medium-High	Performance-linked lease negotiations; revenue-sharing structures where feasible
Talent Attrition	High hospitality sector attrition affecting service consistency	High	Medium	Structured L&D programmes; internal promotions; competitive compensation

Risk Category	Risk Description	Likelihood	Potential Impact	Mitigation
Regulatory Compliance	Multi-state licensing, GST, labour law, and FSSAI compliance complexity	Low- Medium	Medium	Centralised compliance function; dedicated legal counsel; digital compliance tools
Interest Rate Risk	Rising borrowing costs on residual debt	Low	Low	Near-debt-free balance sheet; fixed-rate borrowings where possible
Brand Reputation Risk	Guest complaints, negative online reviews, or food safety incidents	Low- Medium	High	Standardised QA protocols; rapid resolution framework; regular audits
Macro economic / Tariff Risk	US tariff spillovers, rupee depreciation affecting input costs	Medium	Low-Medium	Domestic demand orientation; INR cost base minimises forex exposure

7.2 Key Mitigating Strengths

GCHs risk profile is substantively mitigated by several structural strengths:

- In the coming year debt will mainly obtained for expansion of business.

- Asset-light operating model: Operating lease structures limit capital at risk and provide operational exit flexibility in underperforming markets.

- Diversified portfolio: Exposure across 3 different segments - Corporate, Lesure, & Spiritual

- Strong cash position: Aiming at strong liquidity position in the ensuing year.

8. Outlook - FY2026-27 and Beyond

8.1 Industry Outlook

Indias hospitality sector is poised for an extended period of structurally favourable conditions. Demand growth of 810% annually is expected to outpace supply additions of 6-8% annually through at least FY2028, sustaining pricing power for well-positioned operators. Premium hotel occupancies are projected to remain in the 72-74% range in FY2027, with ARRs expected to rise to ^8,200-8,500 at the industry level. Indias hotel pipeline has over 114,000 rooms in development with 78% of projects under active development suggesting the supply response remains measured and disciplined.

Tier 2 and Tier 3 cities will be the frontier of growth for the next decade, with nearly two-thirds of upcoming branded hotel room additions concentrated in these markets. GCHs established presence and active pipeline in these corridors position it ahead of many peers in capitalising on this geographic diversification of hospitality demand.

Sources: Hotelivate Trends & Opportunities 2025 (Oct 2025); Global Asset Solutions India Market Outlook (Nov

2025) ;BizzBuzz India Hotel Boom Report (Mar 2026); JLL Hotel Momentum Monitor; IMF World Economic Outlook (Jan

2026) ;NSO FY2026 Advance Estimates; Management estimates and projections for FY2025-26

8.2 GCHs Strategic Priorities for FY2027

- Portfolio Expansion: Target of operational 3000 keys by March 2028 in high-return markets, with a continued preference for business and spiritual hotel properties.

- Portfolio Build Up and Yield Enhancement: Continue driving occupancy improvement and ARR growth, targeting enterprise-wide occupancy of 65%+.

- Brand development: Focus on new units in name and style of Grand Continent, improve in-house sales program, establish a robust digital marketing platform

- Technological intervention/improvement: In functions such as revenue management, accounting, procurement, CRM & Guest interaction

9. Efficient Internal Control System And Its Adequacy

The Company has established adequate internal control system designed to ensure the accuracy and reliability of financial reporting, safeguard assets, and ensure compliance with applicable laws and regulations. The internal control framework is periodically reviewed by management and tested by the Internal Audit team, with findings and recommendations placed before the Audit Committee. Continuous monitoring, process standardization, and technology enabled controls further enhance the adequacy and effectiveness of the system. The Board believes that these controls are commensurate with the size and nature of the Companys operations.

In accordance with Section 134(5) of the Companies Act, 2013, the Company has also laid down Internal Financial Controls (IFC) to ensure the orderly and efficient conduct of its business, including adherence to policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. These controls are periodically assessed for both design and operating effectiveness through internal audits and management evaluations. Based on the results of these assessments, the Board confirms that the Companys internal financial controls over financial reporting were adequate and operating effectively during the financial year under review.

10. Human Resources and Organisational Development

Human Resource Development at Grand Continent Hotels Limited is focused on enhancing the knowledge, skills, and competencies of employees so that they can perform to the best of their potential while meeting the evolving needs of the organisation. Our HR framework ensures that candidates are selected with the right set of competencies, or with the ability to develop them through structured training, thereby aligning with the culture and service ethos of the hotel. We believe in employing individuals who reflect our mission of providing authentic hospitality, with emphasis on adaptability, teamwork, effective communication, and service orientation. Employees are expected to be proactive, demonstrate strong interpersonal skills, and contribute effectively in a collaborative work environment. To support this, we have developed an extensive training and development model that equips employees with the required operational and service standards.

10.1 Employee Engagement

We recognise that employee engagement directly contributes to superior guest satisfaction and business outcomes. Engagement is fostered through initiatives that emphasise connection, recognition, communication, and care. Celebrations of birthdays and festivals, contests, sports and cultural programs are organised across units to build a sense of belonging among employees.

10.2 Inclusive and Empowered Workforce

Our workforce is diverse, covering operations, culinary, technical, front office, and corporate roles, each contributing uniquely to the guest experience. The company is committed to being an equal opportunity employer and continues to expand inclusivity efforts, including opportunities for persons with disabilities. We remain supportive of blue-collar talent by ensuring fair compensation, dignity of labour, and structured career growth. A culture of accountability and ownership is encouraged across all levels, empowering employees from the frontline to leadership roles.

10.3 Learning & Development

The company invests significantly in learning and development to shape industry-ready professionals. Our training efforts include technical workshops in housekeeping, front office, food and beverage, and engineering to strengthen functional expertise. In addition, certification programs in collaboration with Hotel Logix and hospitality institutes are provided to enhance technical knowledge. Soft skills and leadership development programs are tailored for middle and senior management to prepare them for greater responsibilities. Industrial training tie-ups with leading hotel management institutes ensure a steady pipeline of trained talent for the future.

10.4 Talent Management

Our talent management strategy is designed to attract, develop, and retain high-potential employees with a future- focused approach. A robust performance management system linked with goal setting and annual appraisals drives accountability and ensures alignment with organisational objectives. Career pathing and internal promotions are prioritised over external hiring, reflecting our commitment to developing talent from within. Succession planning for key roles is undertaken to ensure business continuity. Employees are also encouraged to gain cross-functional exposure to become multi-skilled professionals, while regular talent reviews and personalised development plans help in identifying and grooming the next generation of leaders.