H. S. India Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS:

Hospitality industry is becoming more technology-driven, customer-centric, and sustainability- focused. Organizations that invest in innovation, digital capabilities, environmental responsibility, and personalized services are likely to strengthen their competitive position and achieve sustainable long-term growth. Growth is being driven by digital innovation, evolving customer preferences, and strategic investments in sustainable and technology-enabled operations. These days, the hospitality business is presumably the worlds quickest developing, work making calling, utilizing one out of ten individuals around the world. It is a noteworthy player inside the worldwide economy.

The primary goal of the tourism strategy in India is to position tourism as a noteworthy motor of monetary development. Rising incomes among Indias growing middle class are driving strong growth in domestic leisure travel. Supportive government initiatives like improved connectivity and Dekho Apna Desh campaigns have made travel more accessible, making the middle class a key driver of Indias tourism growth.

2. OPPORTUNITIES, THREATS, RISK AND CONCERNS:

One of the most significant trends shaping the hospitality industry is the rise of hybrid work and leisure travel. Hybrid work allows employees to divide their time between working from the office and working remotely. As a result, many professionals are no longer required to remain in one location, creating greater flexibility to combine business and leisure travel. This trend has increased demand for hotels that provide both business facilities and leisure amenities.

Your Company is in well position to take advantage of the following situations:

- Healthy economy having positive support of Tourism Sector.

- Well framed State and Central Government policies to attract tourists.

- Proximity to Railway station and Bus station.

- Healthy Competition in the city.

- Extending the product portfolio by offering various types of facilities.

- Demand between the national and the inbound tourists can be easily managed due to difference in the period of holidays.

Recent geopolitical tensions and ongoing wars (particularly in West Asia and surrounding regions) have created significant uncertainty for the global hospitality and tourism industry. These conflicts have both direct and indirect effects on travel demand, operational costs, and overall business stability. Wars reduce global tourist confidence due to safety concerns, travel advisories, and fear of instability.

Cyber security threat s and data breaches represent a significant and evolving risk for the hospitality industry. As digital adoption increases, the attack surface continues to expand, making robust cyber security frameworks essential.

3. FINANCIAL AND OPERATIONAL PERFORMANCE:

The total revenue of your Company for the year 2025-26 was Rs. 2659.20 lakh in comparison of Rs. 2727.87 lakh of the previous year. The Company reported net profit after tax of Rs. 162.12 lakh for the year 2025-26 in comparison with a net profit after tax of Rs. 141.18 lakh of the previous year.

4. DETAIL OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Details of Significant changes in Key Financial Ratios given in Note-37 of the Notes on financial statements for the year ended on 31^st March, 2026.

5. FUTURE PROSPECTS:

Green technology investments, as well as a change in how hotels conduct their business, will be necessary for this. The hotel sector in emerging nations is still expanding, which is a significant trend. People are eager to travel and discover new locations more frequently as more and more individuals worldwide have access to more disposable income. In previously untouched markets, this will provide hotels with new opportunities to grow.

The expansion of regional airports under schemes like UDAN (UDE DESH KA AAM NAGRIK) has improved connectivity to Tier-II and Tier-III cities in India, enabling the growth of new hospitality markets. Improved road networks and high-speed rail connectivity have also reduced travel time and increased tourist mobility. As travel demand continues to rise, the sector is expected to expand significantly, offering increased employment, investment opportunities, and sustained economic growth.

However, your company to believe that the long term prospects for the travel and tourism industry in India are more attractive. As mid market faces very little disturbances, your company is at locations where they are targeting the mid-market segment, provide comfort and look as per guests requirements. Your Directors look forward to the future with confidence.

6. ADEQUACY OF INTERNAL CONTROL SYSTEM:

The Company has proper, strong, independent and adequate internal control systems to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transaction are authorized, recorded and reported correctly. The internal control systems are supplemented by an extensive programme of internal audits reviewed by management and documented policies, guidelines and procedures. The internal control systems of the Company are designed to ensure that the financial and other records are reliable, for preparing financial statements and other data, and for maintaining accountability of assets.

7. HUMAN RESOURCE DEVELOPMENT:

The manpower employed in your Company for 2025-26 was 137 employees. The Company depends extensively on its human assets and consider this as one of the most precious asset and not affordable to lose.

Your Company has a team of able and experienced industry professionals. Your Company always believe to invest in human resources by means of providing various facilities, with a view to strengthen its presence in existing business and for taking advantage of the emerging growth opportunities in the hospitality sector. Your Company seeks regular feedback fro m its employees to ascertain their levels of satisfaction and to ensure that employees morale and motivation are constantly improved. Critical human resource issues are analysed, corrective actions initiated and results monitored regularly. In order to preserve competent employees and to provide homely environment, your Company has arranged monthly staff function, religious programs, picnic tours, etc. Human resource is drawn from diverse academic backgrounds and the Company has placed emphasis on recruiting people with formal training that matches their job profile.

8. CAUTIONARY STATEMENT:

Certain statements made in the Management discussion and analysis report, describing the Companys objectives, projections, estimates, predictions and expectations may be forward looking statements, within the meaning of applicable securities law and regulations and actual results may differ materially from those expressed or implied. Significant factors that make differences to Companys operations include competition, changes in Government policies and regulations, tax regimes and economic development within India. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events or otherwise.