HB Estate Developers Ltd Management Discussions

1. OPERATING RESULTS

During the financial year ended March 31, 2026, the Company delivered a satisfactory financial performance despite a challenging business environment. Revenue from Operations stood at ^11,692.63 lakhs as compared to ^11,769.55 lakhs in the previous financial year, reflecting a marginal decline of 0.65%. Total Revenue amounted to ^11,845.51 lakhs against Rs.12,006.66 lakhs in FY 2024-25.

The Company continued to focus on operational efficiency and prudent cost management initiatives. Total Expenses decreased to Rs.10,068.77 lakhs from Rs.10,406.12 lakhs in the previous year, registering a reduction of approximately 3.24%. As a result, Profit Before Tax (PBT) increased to Rs.1,776.74 lakhs from Rs.1,600.54 lakhs, recording a growth of 11.01%.

Profit After Tax (PAT) for the year stood at Rs.1,170.38 lakhs as compared to Rs.1,079.45 lakhs in the previous year, reflecting a growth of 8.42%. Other Comprehensive Income amounted to Rs.3.78 lakhs against a loss of Rs.2.11 lakhs in the previous year. Consequently, Total Comprehensive Income increased to Rs.1,174.16 lakhs from Rs.1,077.34 lakhs, registering a growth of 8.99%.

The total revenue of the hotel unit of the Company, Taj City Centre Gurugram, for the financial year under review was Rs.11634.63 lakhs as compared to ^11713.06 lakhs during the previous year. During the year under review, the Company incurred a cash profit amounting to 2574.56 lakhs compared to Rs.2,361.04 lakhs incurred in the previous financial year.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

2.1 Global Scenario

As per United Nations World Tourism Organization (UNWTO) international tourism maintained its strong growth momentum during 2025, with approximately 1.52 billion international tourist arrivals, representing a 4% increase over 2024 and signaling a return to the long-term pre-pandemic growth trend. Global tourism export revenues, including international tourism receipts and passenger transport, are estimated to have reached USD 2.2 trillion, with international tourism receipts alone accounting for around USD 1.9 trillion, reflecting continued growth in visitor spending. The recovery was supported by robust outbound travel demand from major source markets, improved air connectivity, visa facilitation measures, and the continued recovery of destinations in Asia and the Pacific. Looking ahead, UN Tourism projects international tourist arrivals to increase by 3%-4% in 2026, driven by sustained consumer demand, expanding airline capacity, and major global sporting events. However, the outlook remains subject to risks arising from geopolitical tensions, economic uncertainty, inflationary pressures, climate-related disruptions, and changing consumer spending patterns. Overall, the global tourism sector is expected to continue its positive trajectory, supported by resilient travel demand and improving market conditions.

(Source: UNWTO, Barometer January 2026)

2.2 Indian Scenario

The Indian hospitality sector continued its strong growth trajectory during FY 2025-26, supported by robust domestic tourism, increasing business travel, MICE (Meetings, Incentives, Conferences and Exhibitions), destination weddings, religious tourism and improving international tourist arrivals. Despite a high base following the post-pandemic recovery, the industry maintained healthy growth, with ICRA projecting 6-8% revenue growth during FY 2025-26. The premium hotel segment is expected to sustain healthy occupancy levels of 72-74%, while average room rates (ARRs) are projected to improve to Rs.8,200- Rs.8,500, reflecting strong pricing power amid demand outpacing supply.

The sector also witnessed significant investments by domestic and international hotel chains, expansion into Tier-II and Tier-III cities, and continued growth in branded hotel inventory. Government initiatives to strengthen tourism infrastructure, improved connectivity, and rising disposable incomes further supported the industrys expansion. Although challenges such as inflationary pressures, geopolitical uncertainties and increasing operating costs persisted, the overall outlook for the Indian hospitality sector remained positive, underpinned by resilient domestic demand and sustained investment in tourism and hospitality infrastructure.

3. OPPORTUNITIES AND THREATS

The Indian hospitality industry continued to present significant growth opportunities during FY 2025-26, at the same time the industry continues to face certain challenges and threats. Inflationary pressures on food, energy and employee costs, geopolitical uncertainties affecting international travel, fluctuations in foreign tourist arrivals, and global economic slowdown may impact travel sentiment and discretionary spending. Intensifying competition from alternative accommodation platforms and new hotel developments, coupled with rising compliance requirements and increasing investments in technology and sustainability, may exert pressure on operating margins. The industry also remains vulnerable to unforeseen events such as pandemics, natural disasters, adverse weather conditions and disruptions in transportation networks, which could adversely affect travel demand. Nevertheless, the strong domestic travel market, prudent capacity expansion and continued focus on operational efficiency are expected to support the long-term resilience and sustainable growth of the Indian hospitality sector.

4. FUTURE PROSPECTS AND OUTLOOK

The outlook for the global hospitality industry in 2026-27 remains positive, supported by sustained growth in leisure and business travel, rising international tourist arrivals, and continued investments in tourism infrastructure. The Indian hospitality sector is also expected to witness robust growth, driven by strong domestic demand, increasing foreign tourist arrivals, expansion of religious and MICE tourism, improved connectivity, and government initiatives to promote tourism.

The industry is increasingly leveraging digital technologies, including artificial intelligence, automation, and data analytics, to enhance operational efficiency and deliver personalized guest experiences. Sustainability initiatives and evolving consumer preferences towards experiential travel are also expected to create new growth opportunities.

While challenges such as inflationary pressures, rising operating costs, and geopolitical uncertainties may continue to pose risks, the long-term outlook for the hospitality industry remains encouraging. Strong demand fundamentals, technological advancements, and continued infrastructure development are expected to support sustainable growth and enhance the sectors contribution to economic development.

5. RISKS AND CONCERNS

Your Company aims to understand measure and monitor the various risks to which it is exposed and to ensure that it adheres, as far as reasonably and practically possible, to the policies and procedures established by it to mitigate these risks. The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.

Risk Management Policy

(i) The Senior Management is responsible for identification of new risks, changes to existing risks and retirement of previously identified risks through a formal decision making process.

(ii) To ensure key risks are identified and analyzed, the Senior Management:

(a) defines risks in the context of the Companys strategy;

(b) prepares risk profiles including a description of the material risks, the risk level and action plans used to mitigate the risk; and

(c) regularly reviews and updates the risk profiles.

(iii) The Company has implemented a systematic process to assist in the identification, assessment, treatment and monitoring of risks and provides the necessary tools and resources to management and staff to support the effective management of risks.

(iv) Risks faced by the Company in its business principally arise from Real Estate and Tourism industry. This includes macroeconomic risks, investee company specific risks, market wide liquidity risks and execution risks relating to the company/its intermediaries. The macroeconomic risks, investee company specific risks are covered by investment decisions based on third party research and internal assessment. Market wide risks are assessed and managed by investment timing decisions. The execution risk is managed by dealing with reputed intermediaries and through own back office discipline re accounting and follow up of trades.

(v) The Company assesses the effectiveness of its risk management plan through structured continuous improvement processes to ensure risks and controls are continually monitored and reviewed.

6. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has adequate internal controls commensurate with its size to ensure protection of assets against loss from unauthorized use and all the transactions are authorised, recorded and reported correctly. The internal control is also supplemented by internal audit conducted by an external and independent firm of Chartered Accountants on an ongoing basis.

The Internal Audit Reports along with management comments thereon are reviewed by the Audit Committee of the Board. Besides, the Audit Committee reviews the internal controls at periodic intervals in close coordination with the Internal Auditors.

7. FINANCIAL PERFORMANCE

a) Share Capital: The Companys issued and subscribed share capital consists of Equity and Redeemable Preference Share capital. The paid-up share capital of the company as at March 31, 2026, stood at Rs.127,95,99,470/- comprising of 22959947 Equity Shares of Rs. 10/- each and 10500000 Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs. 100/- each.

b) Non-Current Assets & Non- Current Liabilities: During the year under review, the NonCurrent Assets and Non-Current Liabilities stood at Rs.43,392.11 Lakhs and Rs.23 342.10 Lakhs respectively against Rs.44,752.88 Lakhs and Rs.25,295.28 Lakhs respectively in the last year.

c) Current Assets & Current Liabilities: During the year under review, the Current Assets and Current Liabilities stood at Rs.5705.70 Lakhs and Rs.6394.79 Lakhs respectively against Rs.4,891.07 Lakhs and Rs.6,895.97 Lakhs respectively in the last year.

d) Key Financial Ratio (Standalone):

Particulars	Year Ended		% change over previous year	Reason for change of more than 25%
	March 31,2026	March 31, 2025
1. Trade Receivable Ratio	18.00	26.88	(33.05)	Decline in ratio due to increase in average trade receivables
2. Inventory Turnover Ratio	0.75	0.71	5.49	NA
3. Debt Service Coverage Ratio	0.97	0.88	9.76	NA
4. Current Ratio	0.89	0.71	25.80	Improvement in ratio due to decrease in current liabilities and increase in current assets during the year
5. Debt Equity Ratio	1.33	1.63	(18.18)	NA
6. Operating Profit Margin (%)
7. Net Profit Margin (%)	10.01	9.17	9.14	NA
8. Return on Net Worth (%)	7.59	8.25	(7.98)	NA

8. HUMAN RESOURCES

Your Company has adequate human resources which is commensurate with the current volume of activity and is reviewed by the management periodically and the Company would induct competent personnel on increase / expansion of the activity.

9. CAUTIONARY STATEMENT

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Statements in this Management Discussion and Analysis, describing the Companys objective, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include interest rates and changes in the Government Regulations, tax regimes, economic developments and other factors such as litigations etc.