Howard Hotels Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The global hospitality industry showed strong signs of recovery in FY 2024-25, following several years of disruption due to the COVID-19 pandemic and macroeconomic headwinds. International tourism witnessed an encouraging rebound, fueled by a surge in travel demand, easing of visa restrictions, and growth in global air connectivity. Destinations in Europe, Southeast Asia, and the Middle East recorded robust occupancy levels, with travellers increasingly opting for experiential stays, wellness retreats, and eco-conscious hospitality options. Simultaneously, the hospitality sector globally embraced digital transformation, including contactless services, data-driven personalization, and ESG-centric operations, indicating a paradigm shift in customer preferences and operational priorities.

In parallel, the Indian hospitality sector witnessed a continued rebound during the financial year 2024-25, driven by the resurgence of domestic tourism, increased business travel, and gradual normalization of international arrivals. Government initiatives such as the Dekho Apna Desh campaign, the ongoing development of infrastructure, and Indias presidency of the G20 further contributed to higher footfalls across key travel destinations. The hotel industry, being a significant contributor to employment and GDP, has seen the adoption of new-age technologies including AI-based customer service, automated check-ins, and sustainable energy usage models. These developments have redefined the service delivery standards across the sector. Notably, the tier-II cities including Agra, where Howard Hotels Limited operates, have emerged as focal points of growth, offering untapped tourism and hospitality potential.

However, challenges such as rising input costs, shortage of skilled manpower, and increased regulatory compliance continue to exert pressure on margins. The sector remains sensitive to global geopolitical dynamics and pandemic-related uncertainties, making resilience and adaptability key priorities for stakeholders.

OPPORTUNITIES AND THREATS

The Company sees multiple growth opportunities arising from changing travel behavior, including a preference for experiential stays, wellness tourism, and eco-conscious travel. Howard Hotels Limited, with its flagship property situated near the Taj Mahal, is strategically positioned to leverage increased interest in cultural and heritage tourism. The rise of digital platforms for direct bookings, virtual concierge services, and data analytics provides further avenues to enhance guest experience and operational efficiency.

Nevertheless, the Company also faces external threats such as the emergence of alternate accommodation aggregators, changing environmental regulations, and the volatility of seasonal demand. Maintaining service consistency and differentiating on quality remains crucial amidst growing competition.

SEGMENT-WISE PERFORMANCE

Howard Hotels Limited operates in a single segment?hospitality?focused on its premier property "Hotel Howard Plaza - The Fern" located in Agra. During the financial year under review, the Company recorded total revenue of ¹ 1,633.58 lakhs, reflecting a growth of approximately 22% over the previous years revenue of 1 1,338.63 lakhs. The growth can be attributed to higher occupancy rates, improved average room revenue, and increased banquet and F&B sales. Despite strong revenue growth, operating margins witnessed a marginal decline due to inflationary trends in utilities and supplies.

OUTLOOK

Looking ahead, the Indian hospitality sector remains poised for long-term expansion, supported by domestic consumption, digital penetration, and policy support for tourism. The rising aspirations of middle-class travelers and growing inbound traffic, coupled with the governments focus on creating world-class tourism infrastructure, are expected to sustain sector momentum. The Companys strategy includes strengthening its digital presence, enhancing operational efficiency, and exploring asset-light management contracts to expand its footprint.

Howard Hotels Limited remains cautiously optimistic and continues to invest in upgrading guest experience, employee training, and energy- efficient systems. With the hospitality market in India evolving toward personalized and sustainable travel, the Company is well-positioned to tap into these emerging trends.

RISKS AND CONCERNS

As a hospitality business, the Company is exposed to a variety of risks, including operational, financial, environmental, and reputational risks. The seasonality of tourist flow in Agra presents a cyclical challenge to consistent revenue generation. Rising input costs, coupled with unpredictable geopolitical scenarios and potential public health disruptions, pose threats to operational stability. Regulatory risk in the form of evolving environmental, tax, and labor compliances also requires continuous monitoring.

To address these challenges, the Company has institutionalized a risk management framework that identifies, assesses, and mitigates critical business risks. Regular internal audits, compliance checks, and management reviews form part of this framework, ensuring preparedness against potential uncertainties.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has implemented robust internal financial control systems commensurate with its size and complexity. These systems are designed to ensure accuracy of accounting records, regulatory compliance, and the safeguarding of assets. Internal audits are conducted periodically by an independent firm of chartered accountants, and their findings are reviewed by the Audit Committee.

During the year, the internal control mechanisms were tested and found to be operating effectively. No material weaknesses or significant control failures were observed. The management remains committed to continuously enhancing the control environment in alignment with best governance practices.

FINANCIAL AND OPERATIONAL PERFORMANCE

During FY 2024-25, the Company reported a total income of ¹ 1,633.58 lakhs compared to ¹ 1,338.63 lakhs in the previous financial year. Profit before tax stood at 1 57.35 lakhs, while the net profit after tax was 1 42.68 lakhs, compared to 1 95.09 lakhs in FY 2023-24. Although revenues grew significantly, profitability was affected by an increase in operating expenses, particularly energy costs and material consumption.

Other comprehensive income for the year amounted to 1 2.96 lakhs, bringing the total comprehensive income to 1 45.64 lakhs. The Company continues to focus on cost optimization, resource efficiency, and revenue diversification through auxiliary services to enhance its financial performance.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Howard Hotels Limited recognizes its employees as a vital force behind its sustained success. The Company fosters a culture of inclusivity, learning, and performance. Various training programs were organized during the year to upskill employees across service, safety, and leadership domains.

As on March 31, 2025, the Company maintained a cordial and cooperative relationship with its workforce. There were no industrial disputes or employee grievances pending as on the date of this report. The Company is also compliant with all statutory obligations relating to labor laws, wages, safety, and welfare.

MATERNITY BENEFIT COMPLIANCE

In accordance with the provisions of the Maternity Benefit Act, 1961, the Company confirms its full compliance with the applicable maternity benefit norms. During the financial year under review, no employee availed maternity leave or related benefits. However, all required systems and policies are in place to support eligible employees as and when applicable.

KEY FINANCIAL RATIOS:

In compliance with Schedule V of SEBI (LODR) Regulations, 2015, the Company has disclosed key financial ratios as below:

Particulars	2024-25	2023-24
Debtors Turnover Ratio	58.16	43.82
Inventory Turnover Ratio	4.16	4.13
Interest Coverage Ratio	2.31	7.52
Current Ratio	1.09	0.964
Debt Equity Ratio	0.42	0.48
Operating Profit Margin (%)	2.61%	7.10%
Net Profit Margin (%)	2.61%	7.10%
Return on Net Worth	6.15%	8.70%
Earnings Per Share (EPS) (Rs.)	0.47	1.04

The decline in profitability ratios is primarily due to increased cost pressures and a more competitive pricing environment.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations, or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied due to various factors beyond the control of the Company including economic conditions, market dynamics, and regulatory developments.

For and on behalf of Board of Directors HOWARD HOTELS LIMITED

	Sd/-	Sd/-
	Nirankar Nath Mittal	Nirvikar Nath Mittal
Date: July 11, 2025	(Chairman & Managing Director)	(Whole-Time Director)
Place: Agra	DIN: 01533102	DIN: 00536470