Mahindra Holidays & Resorts India Ltd Management Discussions

Mahindra Holidays & Resorts India Limited ("Mahindra Holidays", "MHRIU or "the Company") is a leading player in the leisure hospitality industry in India. Founded in 1996, the Company has established vacation ownership business in India, where it is the market leader with over three lakh members. Together with its Finnish subsidiary. Holiday Club Resorts ("HCR"), Mahindra Holidays has over 3.6 lakh members and ~ 160 resorts in India, Asia and Europe — making it the largest vacation ownership company outside the USA.

Mahindra Holidays also offers its members access to over 4,300 RCI affiliate resorts worldwide and an opportunity to holiday at 500+ partner hotels in India and abroad through Horizons — its own holiday exchange programme for members. In addition, it offers unique membership privileges — an unmatched range of travel and lifestyle experiences — which differentiates it within the industry. This experience ecosystem has made ‘Club Mahindra an aspirational brand in the leisure hospitality industry in India.

This Management Discussion and Analysis (MDA) report presents an overview of the operational and financial performance of the Company. It also discusses the macroeconomic environment and opportunities, Mahindra Holidays strategy and important initiatives taken by it during the year. We begin with a summary of the Companys performance in 2024-25.

Summary and Key Highlights

India continued to be one of the fastest growing large economies, despite a deceleration in growth in 2024-25. Although recent changes in US tariff policies have introduced significant uncertainties — posing new headwinds for global growth and inflation — the outlook for Indias domestic economy remains stable. Of particular interest to your Company are urban consumption and discretionary spending trends, both of which are looking up. The section on Macroeconomic Environment and Opportunities provides a more detailed discussion.

As a leader in leisure hospitality space, Mahindra Holidays is focussed on enhancing customer experience to meet its growth and performance objectives. Here are the key highlights of its performance in 2024-25:

• Mahindra Holidays recorded its best performance in terms of inventory addition during the year. It added 520 rooms in 2024-25, taking the total room inventory to 5,847 units across 125 resorts as on March 31, 2025. This is in line with its target to achieve a room inventory of 10,000 units by 2029-30. Besides this, the Company has put in motion an ambitious plan for upgrading several of its existing resorts over the same period. Further details are provided in the section on Properties and New Projects.

• Occupancy remained stable at 84% in 2024-25, compared to 84.6% in 2023-24 This is significant as it comes on a much larger operating inventory, given the strong inventory addition in 2024-25 and the time it takes to ramp-up operations at new properties. Various initiatives were taken to improve the resort experience, member services and excellence in operations. These are presented in sections on Resort Operations, Member Experience and Business Excellence respectively. Continued growth in revenues from referrals and upgrades underscores the Companys success in these areas.

• Mahindra Holidays added 12,393 members to its vacation ownership business in 2024-25 After accounting for members who completed their tenure, the cumulative membership base stood at 3,04,508 as on March 31, 2025, compared to 2,97,771 at the end of 2023-24. During the year, the Company took measures to transform its sales process — to align it better with its target market. This is reflected in significant increase in average unit realisation. See the section on Membership for further details.

MHRIL reported creditable financial results for 2024-25. As shown in Chart A, Total Income (including Other Income) for Mahindra Holidays as a standalone entity, increased by 8% from Rs. 1,434 crore in 2023-24 to Rs. 1,545 crore in 2024-25. Profit Before Tax (PBT) increased by 21% from Rs. 223 crore in 2023-24 to Rs. 270 crore in 2024-25, whereas Profit After Tax (PAT) grew from Rs. 181 crore in 2023-24 to Rs. 200 crore in 2024-25.

Cash balances continued to be strong, increasing by Rs. 172 crore during the year to Rs. 1,555 crore at the end of 2024-25. A more detailed analysis is provided in the section on Financials.

Macroeconomic Environment and Opportunities

According to the International Monetary Fund (IMF), world output grew at 3.3% in 2024 compared to 3.5% in 2023. Even as the geopolitical risks persisted, the economic environment remained stable with better than anticipated control over inflation. At the end of 2024, the outlook was for growth to continue to be about 3.3% in 2025 and 2026 — driven by an improved outlook for the US. But that has changed. New tariff policies by the US has heightened uncertainty over global trade, inflation and the growth outlook. Although a recession is unlikely, recent projections reflect significant growth markdowns and higher inflation for some countries In its latest estimates released in April 2024, the IMF projects the global economic growth to be 2.8% in 2025.

Indian economy also witnessed a deceleration in growth during the year According to the second advance estimate released by the National Statistics Office in February 2025, Indias GDP grew at 6.5% in 2024-25, compared to 9.2% in the previous year Even as the growth in the agriculture accelerated from 2.7% to 4.6%, both industry and services sector registered lower growth compared to last year. At a fundamental level, the prospect for the domestic economy remains bright with positive outlook for agriculture and a resilient services sector. Manufacturing activity, which took the biggest hit in 2024- 25, is also showing signs of revival.

But the recent changes in US tariff policies have introduced significant uncertainties — affecting confidence, consumer choices, and above all, trade and investment flows. Furthermore, the impact of these changes is not yet fully understood, as the challenges and opportunities that it presents unfold over the next few quarters. According to the RBIs recent Monetary Policy Report released in April 2025, Indias growth is projected to remain stable at 6.5% in 2025-26 This is exceptional in the current global environment and would mean that India will continue to be the fastest growing large economy in the world.

This would also mean that the expansion of disposable incomes of households will continue, albeit at a somewhat lower pace. As a leading player in the leisure hospitality industry in India, the opportunities for your Company are more closely linked with the fortunes of the domestic demand. According to the RBI, urban consumption is gradually picking up with an uptick in discretionary spending. This will further reinforce the prospects of the tourism industry in India, which is going through a high-growth phase — with branded leisure hospitality market expected to double its size over the next 5 years.

Mahindra Holidays is the market leader in the vacation ownership business and one of the top players in the branded leisure hospitality space in India. During the year, it carried out extensive research on preferences of its target audience and major trends in the leisure travel in India to identify opportunities and craft a strategy to achieve these (See Box 1). An important aspect of its growth strategy is to use technology to drive efficiencies and scale in all spheres of the Companys operations. At the same time, focus will be on balancing the approach with a human touch and empathy to enhance customer delight.

Box 1: Consumer Insights and Opportunities

• Increase in Holidays: Customers are taking 5-7 trips — fewer long vacations and greater number of weekend or short trips — spending anywhere between 20-30 days in a year on leisure travel. International trips is major attraction for a vast majority of travellers.

• Looking for Premium: Holidays are increasingly becoming an opportunity to sample an aspirational life, increasing demand for upscale and premium properties. There is a growing demand for boutique theme-based resorts, including villas and eco- tourism. The desire to feel privileged and treated special transcends customer segments.

• Diverse and Customised: Closely linked to above is growing demand for diverse experiences — including destination-specific activities, local culture and cuisine. People increasingly like to plan their holidays in advance and build customised itineraries. And for this, they look for experts for end-to-end planning with an approach which is more consultative, especially when it comes to international or even less frequented domestic destinations.

• Hassle-free and Transparent: An important expectation of this target group is to have a hassle- free holiday experience, with all arrangements taken care of as planned. This includes need for a transparent communication on products and services, for example, clearly spelled out inclusions and exclusions. Given the long-term nature of the Companys products, this assumes even greater significance.

• The Social Impact: Social media is turning out to be the biggest influencing factor. Not only is this shaping the choice of destination, but it also drives choices relating to experiences on what to do, where to go, what photos and reels to click and clothes to wear.

Business Performance

Membership

Mahindra Holidays has a complete product portfolio for its target group, covering all key life-stage segments (See Box 2).

Box 2: MHRILs Product Portfolio

. CMH is the Companys flagship product in the vacation ownership business. Under this we have two variants CMH25 and CMH15, that entitle members a weeks holiday every year for a period of 25 years and 15 years respectively. This is aimed at families where the age of primary buyer is 32+ years.

• Bliss is a flexible points-based product which offers holiday every year for 10 years. This is targeted at people in the 50+ age group. This is based on customer insight that at this life stage the prospects are both time rich and money rich but are looking at the shorter commitment period.

• During the year, the Company restructured GoZest, which is now a 5-year points-based product aimed at bringing in members who want to experience Club Mahindra proposition before they commit to a long-term view on the product. This feature rich product consolidates MHRILs offering in the short tenure segment, replacing the older 3 year and 4 year products.

• Club Mahindra Fundays is a corporate product which allows enrolled organisations to offer holiday entitlements to its employees, channel partners and associates either as a part of their reward and recognition programme or as an employment perquisite. In 2024-25, Mahindra Holidays onboarded new corporate customers into the platform and the utilisation of room nights remained robust.

The Company added 12,393 members in 2024-25, compared to 20,019 in the previous year. After accounting for members who completed their membership tenure, total membership stood at 3,04,508 as on March 31, 2025, compared to 2,97,771 at the end of 2023-24. Chart B provides data on the cumulative membership for the last 10 years.

Note: Membership includes all vacation ownership products of the Company.

During the year, the Company took several steps to streamline its customer acquisition infrastructure and processes to improve efficiencies and bring down costs. This included: (a) consolidating presence of its sales network with greater focus on Tier 1 and Tier 2 markets as well as at resort locations, (b) increasing minimum membership period to 5 years and at the same time restricting payment plans with higher down payment and lower tenures, (c) greater focus on creating brand-pull to generate organic leads and referrals, corporate and retail alliances, and (d) utilise technology to customise the sales process and improve sales efficiency.

Although some of these changes have impacted member addition in the short-term, they are in line with the Companys strategy to move Club Mahindra further up in its positioning as a premium and aspirational brand in the leisure travel industry in India. There were visible gains during the year in this respect. First, the average unit realisation ("AUR") increased by 39% from Rs. 4.12 lakh in 2023-24 to Rs. 5.73 lakh in 2024-25. Second, referrals and digital continued to be an important contributor to the Companys success in 2024-25, contributing to 59% of total sales. Third, contribution of on-site as well as digital and online sales was significant.

Another important aspect of Companys strategy is its Experience Ecosystem — unique privileges and experiences to its members beyond the 7 night holiday period — to strengthen the Club value proposition and pull for the Club Mahindra brand. (See Box 3).

Box 3: The Club Mahindra Experience Ecosystem

• Horizon Holiday Exchange Programme: Members can exchange their Club Mahindra room nights for stays in top-rated hotel chains after paying a nominal access fee. This currently covers 500+ hotels across 170+ locations in India and abroad, covering major cities and holiday destinations which gives more options to the members to holiday

• Curated Holiday Experiences: Offers its members a wide range of curated holiday experiences, seasonal tours and weekend getaways and villas. Members can book individual services or complete packages at attractive discounts at the Companys online platforms.

• Club M Select: An exclusive subscription programme which allows enrolled members access to several luxury lifestyle offerings: international hotels, cruises and excursions; air travel benefits; dining privileges; lifestyle experiences; and luxury holidays The platform provides exclusive member only pricing, real time booking, unrestricted access, unlimited usage as well as zero transaction charges.

Properties and New Projects

Mahindra Holidays has a Pan-India presence through its extensive network of resorts across destinations including hill stations, beaches, backwaters, wildlife sanctuaries, forts and heritage destinations. It is also present in international destinations directly or through alliances in destinations such as Thailand, Indonesia, Malaysia, Vietnam, Cambodia, Maldives, Turkey, Singapore, Abu Dhabi, Dubai, Sri Lanka and Nepal. Club Mahindra members also have a choice to access HCRs 33 resorts in Finland, Sweden and Spain.

As shown in Chart C, fhe Company added 520 units to its room inventory in 2024-25, taking the total inventory from 5,327 room units in 2023-24 to 5,847 room units across 125 resorts by the end of the year. 30 of these resorts are in international destinations. Inventory addition during the year also include several new domestic and international destination as well as expansion of 100 rooms at its resort at Kandaghat, Himachal Pradesh.

In line with the Companys strategy, a major part of its room inventory is owned by it or under long-term lease arrangements. In cases of long-term leases, it manages the resorts to ensure delivery of consistent experience to its members. Apart from these, it also adds inventory through short-term inventory arrangements to test new destinations and offer greater choice to its members.

In its last years report, MHRIL had communicated its aim to achieve an inventory of 10,000 units by 2029-30. The addition of 520 rooms during the year is the highest in the Companys history and reflects this resolve. It has a well laid out plan to achieve its target through multiple routes: building greenfield projects, expanding existing resorts, resort acquisition and leases. Existing greenfield projects — Ganpatipule, Maharashtra and Theog, Himachal Pradesh and expansion projects at its Kandaghat, Puducherry and Jaipur properties are expected to add close to 600 rooms over the next few years.

Mahindra Holidays also has land bank at several destinations, including at some of its existing resorts for expansion projects. Some of these projects are in various stages of planning. In addition, it will continue to look at opportunities for fresh leases and acquisitions, especially in regions where it perceives demand to be stronger in the medium term. The Company is also exploring opportunities to build inventory through build-to-suit resorts with third-party landowners and PPP

Given the opportunities in the leisure travel industry in India, another aspect of Mahindra Holidays strategy for growth is consolidating its presence in the premium-branded leisure travel. Accordingly, the Company will focus on building a portfolio of Upscale and Upper-Upscale properties. An important aspect of this strategy is upgrading existing resorts, for which the Company has put in place a comprehensive plan covering most of its owned properties over the next five years. Over 400 rooms will be taken up for this exercise in 2025-26.

Resort Operations

Efficient resort operations and thoughtfully designed, engaging resort amenities are central to delivering immersive holiday experiences. This encompasses three key areas: infrastructure and facilities, holiday activities and F&B. Mahindra Holidays has the unique distinction of having 29 RCI Gold Crown and 2 Silver Crown resorts, which bears testimony to the high standards of resort facilities, amenities and services that its resorts offer. 28 of its resorts are also certified under ISO 22000:2018, which is an international accreditation recognising enhanced food hygiene and safety.

Holiday activities are central to delivering a complete holiday experience. At Mahindra Holidays, these are institutionalised under the banner of ‘Happy Hub. Each resort offers holiday activities suitable for various age groups. The Host and ‘Champs programmes continue to be instrumental in enhancing member engagement at resorts. Besides, each resort has carefully curated list of activities for different age groups, tastes and preferences.

During the year, Mahindra Holidays introduced Flavour Boat, a unique restaurant designed to provide an array of global cuisines and Aagni, an open kitchen concept specialising in pit fire, grills and barbeques. It already operates several successful restaurant concepts across its resorts such as Barbeque Bay, Unwind, Curries, Spice, Finz and Ripples. Efforts are continuously undertaken to make the dining experience more exciting and fulfilling. One such initiative implemented in 2024-25 was Vayu, which uses innovative technology and fresh ingredients to create a unique dining experience focused on health and sustainability.

Mahindra Holidays has institutionalised post-holiday feedback ("PHF"), which encompasses all key areas of resort operations. This serves as a measure of its success in delivering quality holiday experience as well as identifying and addressing member concerns.

Member Experience

At Mahindra Holidays, excellence in member services is about ensuring high levels of satisfaction at all touchpoints, thus improving their overall experience of the Club Mahindra brand.

Over the years, appropriate technological and digital interventions, including use of data science and analytics has become a key element of its strategy to deliver better efficiencies on key operating metrics. This continued during the year. MHRIL launched a new full-service member app, which caters to all Club Mahindra products, further enhancing accessibility. Curated digital offers led to

a significant rise in bookings. Overall, digital bookings grew to 83.4% in 2024-25.

Considerable progress was also made on digitizing important membership-related processes. For instance, the co-applicant journey was digitized in 2024-25, allowing members to add, modify or delete co-applicants directly through the website. Multiple enhancements were also implemented in the onboarding process to guide members through the product and its applicable benefits. 2024-25 marked a significant milestone in the digital onboarding journey, with 92% of the new members onboarded digitally during the year, up from 88% in 2023-24.

In another significant development, the Company instituted a dedicated vertical for holiday planning. The objective of the team is to leverage the power of analytics to offer resort recommendations based on past holidays or search patterns. This contributed to a significant increase in unique member holidays. For new members, this involved proactive planning of their first holiday which resulted in a considerable increase in new members holidaying within the first 3 months of becoming eligible.

As noted earlier, the Company added significant room inventory in 2024-25. New resorts take a certain amount of time to stabilise and ramp-up operations. So does percolating information and generating interest about these properties among the members. Thanks to the efforts mentioned above and specific campaigns to drive member holidays, MHRIL sustained its occupancy levels in 2024-25, despite natural calamities in Sikkim. Overall, occupancy was 84% in 2024-25, compared to 84.6% in 2023-24.

Member engagement is a high priority area as it provides opportunities to introduce members with latest offerings and developments, address concerns, and driving referrals and upgrades In 2024-25, the Company organised large number of Heart-to-Heart ("H2H") activities. Coffee Meets and Feet-on-Street engagements — reaching out to about 11,000 members in the process.

All key operational metrics of effective member experience — be it turnaround times, referrals, product upgrades and collection have shown a healthy improvement during the year. Feedback received through internal feedback mechanisms as well as external surveys continues to be positive.

BUSINESS EXCELLENCE

Mahindra Holidays has adopted the principles of Total Quality Management ("TQM") under the banner of The Mahindra Way — the Mahindra Groups integrated approach to promote excellence in all spheres of its operations.

The Company has effectively embedded quality systems within its critical business functions, seamlessly integrating TQM practices into its day-to-day operations, with emphasis on continuous improvement, customer satisfaction and enhancing overall efficiency. The commitment to delivering exceptional experiences to its customers, active participation of employees in quality initiatives and recognising the importance of sustainable practices remain the key objectives.

During the year, MHRIL organised Quality Marathon as well as Unnati events to foster a culture of quality within the organisation. As a part of its quality initiatives, the Company registered 70,000+ Kaizens, 90 improvement projects, 66 innovation ideas, 660 Best Practices, 18,000+ e-learning quality module certifications, 2,400+ Make Every Moment Magical stories and 151 newly introduced One Point Lessons. Over 88% employees were involved in these initiatives.

Human Resources ("HR")

Hospitality is a service-oriented business where customer experience depends on the interaction between the customers and employees. At Mahindra Holidays, the work environment is built on values including transparency, respect and trust — thus inspiring empowerment creating a performance-driven culture that inculcates excellence.

The Companys operations are spread across its 125 resorts as well as another 35+ offices. Its HR function is organised into three key areas: resort operations, customer acquisition and corporate functions. Over 70% of its people are in customer facing roles. Besides, as millennials form a large part of our workforce, providing them with right avenues to grow is the key element of its HR strategy.

MHRIL strives to ensure that its talent development and engagement practices successfully assess employee strengths, identify areas of development, augment skills through targeted learning and development ("L&D") interventions and reward performance with opportunities for growth. During the year, the company continued its commitment to nurturing talent and building capability across its workforce through structured learning pathways, cohort-based development programs and leadershipbuilding initiatives. Some of the key L&D initiatives undertaken in 2024-25 are presented below:

• Foundations and role-specific training modules to support onboarding and early-stage learning include: Shubharambh induction programme;

Get-Set-Go — a starter program for new hires (1-3 months); Star Academy — an intermediary level learning program for employees with 4-6 months of tenure; Rookie to Champion — a self-paced programme delivered through the Companys Learning Management System; Train the Trainer programme to equip managers and HODs with facilitation and coaching skills and Perfect 10 — a program designed for telemarketing executives.

• Fast track growth programmes such as Proficiency Development Centre - a structured 12 month programme for resort managers to prepare them for future leadership roles; Manager as a Coach programme to strengthen coaching skills; Leadership Development Centre for mid senior level executives which focuses on leadership styles, performance management and managerial effectiveness; and ACE (Accelerated Career Enhancement) programme for frontline roles to increase productivity and develop a career roadmap.

• Similarly, the 12-month iGrow programme is aimed at preparing identified resort team members for next level roles through structured on-the-job training across multiple resorts and monthly development sessions. This programme is designed to broaden exposure and deepen managerial readiness across locations.

• Club Mahindra Executive Training programme for resorts aims at building a team of best-in-class professionals following source-hire-train model for its unique and differentiated product offerings. Over the years, this 18-month intensive programme for hotel management graduates has been successfully providing a steady stream of trained managerial talent in resorts.

Maintaining high employee engagement levels continues to be a top priority. At Mahindra Holidays, this is based on three key pillars - Communication, Joy (a Work and Rewards & Recognition. The Company has institutionalised several mechanisms to drive these efforts.

As on March 31, 2025, there were 5,383 people on the rolls of the Company. Employee relations remained cordial throughout the year.

Information Technology ("IT")

Mahindra Holidays believes that IT plays an active role in providing a competitive edge and contributes directly to its performance. The Company has invested significant resources in its IT architecture and benefits from it in all key spheres of its operations.

During the year, the Company took several tech-based measures to support growth. This included implementing a new Property Management System across its resorts, which allows better integration for all key resort services and points of sale. The core IT infrastructure was also extended to its new operating locations — both resorts and sales offices. Efforts to upgrade its IT assets and application environment to digitise processes in customer acquisition, resort operations and member experience have already been discussed in the respective sections of this report.

Security continued to be an important area of focus in 2024-25. This included upgrading security infrastructure as well as strengthening internal data security systems and processes. Several training sessions on security awareness and drills were also conducted to sensitise employees.

Environment Social Governance ("ESG")

As a part of the Mahindra Group, Mahindra Holidays is guided by the Rise philosophy, with the broader goal of driving positive change for all its stakeholders — including its customers, employees, vendors, shareholders — the communities in which it operates and the larger society. Adherence to the underlying principles of ESG have always been an important part of its functioning, guiding its strategic decision making to create long-term value as well as a tool for mitigating risks.

A discussion on the Companys processes and initiatives around Governance is provided in the chapter on Corporate Governance that forms part of this Annual Report. In what follows, we present the Companys initiatives in the areas of Environment and Sustainability and Corporate Social Responsibility ("CSR").

Environment and Sustainability

Mahindra Holidays is committed to conserve the ecological integrity of its operating locations through responsible business practices and activities such as measurement of carbon footprint, conservation of biodiversity, energy conservation, use of renewable sources, water conservation and waste recycling (See Box 5).

Box 5: MHRILs Sustainability Commitments

• Mahindra Holidays has committed to become Carbon Neutral by 2040.

• It is Indias first hospitality company that has signed both RE100 (Renewable Energy) and EP100 (Energy Productivity), a global campaign led by The Climate Group — setting targets to run on 100% renewable energy by 2050 and to double its energy productivity by 2030.

In 2024-25, Mahindra Holidays undertook various initiatives in the areas of renewable energy, energy saving, water conservation, waste recycling and biodiversity:

• Renewable Energy and Energy Saving: Solar power is streaming in 34 of its resorts with a total installed capacity doubled to 13.9 MWp. Renewable units generated during the year is 90 lakh units (kWh), up by 55% compared to previous year.

Microgrid operations comprising solar energy and BESS (Battery Energy Storage System) is another major initiative to bring down the use of diesel generators, which is now implemented in 9 of our resorts. Outdoor solar lights continue to be installed in landscaped areas, whereas other energy saving initiatives have been systematically implemented at resorts as a part of the energy saving action plan. Deployment of electric vehicles at resorts and charging stations has also increased.

• Water Conservation: Important initiatives include recycling water from sewage treatment plants, rainwater harvesting, installation of water saving taps/ fixtures in rooms as well as public areas. Two of our resorts are Net Water Positive. Utilisation of rainwater increased, whereas an initiative to separate black and grey water treatment systems is underway to improve wastewater recovery.

• Waste recycling: The Company had embarked on the Zero Waste to Landfill ("ZWL") programme in 2019-20 with its Virajpet resort becoming Indias first ZWL resort. Currently, 41 of its resorts are ZWL certified. It is also focused on the installation of organic waste converters, vermicompost systems and biogas which are currently operational at many of its resorts. It has also initiated steps towards implementing principles of circular economy, responsible sourcing and elimination of single-use plastics (See Box 6).

• Biodiversity: The Company has organic gardens at 10 of its resorts. Assonora Nature Park has theme- based gardens namely Herb, Spice, Butterfly, Medicinal and Nature trails. It also has butterfly gardens at Puducherry and Ashtamudi. CII- IBBI, India Business and Biodiversity Initiative ("IBBI") has developed 3 case studies on biodiversity initiative at its resorts in Madikeri and Gir. Another 10 of its resorts have carried out biodiversity assessments. Achievements in the Companys tree plantation drive are presented in the section on CSR. Club Mahindra Ashtamudi, Kerala, is Indias first Resort to adopt the global Taskforce Nature Related Financial Disclosure ("TNFD") framework for Biodiversity Assessment.

Box 6: Elimination of Single-Use Plastics — Key Initiatives

Significant steps were taken in 2024-25 to move towards eliminating single-use plastics. These include (i) replacing plastic mineral water bottles with glass mineral water bottles and resorts implementing in- house bottling plants, (ii) eco - friendly toiletries and liquid soap dispenser eliminating one time use 30ml plastic bottles; in-room dry guest amenities such as dental and shaving kits; laundry bags made of straws from corn starch, (iii) Plastic hangers and trays in guest rooms replaced with products made of rubber wood or other sustainable material trays, (iv) move from plastic to wooden disposable cutlery, room key cards and employee name badges and (v) crockery made of sustainable materials in F&B.

Club Mahindra Madikeri is Indias first Triple Net "0" rated resort which includes Net Zero Energy, Net Zero Water and Zero Waste to Landfill. The Companys efforts on sustainability are also reflected in the Platinum green building certification (IGBC-CII) of 26 of its resorts and Cold certification of another 3 resorts.

The Company actively participates in Mahindra Groups Corporate Sustainability Reporting. The Sustainability Report of the Group is prepared in accordance with the internationally accepted framework specified by the Global Reporting Initiative ("GRI"). This framework sets out the principles and indicators that should be used to measure and report economic, environmental and social performance During 2024-25,50 resorts participated in sustainability reporting of the Croup.

Corporate Social Responsibility ("CSR")

Mahindra Holidays aims to positively contribute towards the economic, environmental and social well-being of communities through its CSR interventions. The Company engages in community initiatives that are designed to enrich lives and protect nature. It is committed to be in the harmony of nature, value natural resources and contribute towards a greener future.

Apart from working with not-for-profit organisations and contributing resources for CSR projects, the Company also encourages community service by its employees by involving them through its Employee Social Options Programme During the year, 2,391 employees volunteered 16,987 person hours on CSR initiatives.

MHRIL assists communities around its resorts by rolling out interventions in the areas of Women Empowerment, Education and Livelihood and Environmental Sustainability. Key initiatives undertaken by the Company in 2024-25 are presented below:

• Girl Child Education: Through the Nanhi Kali project, the Company supports education of 3,500 girls from socially and economically marginalised families.

• Women Empowerment, Education and Livelihood:

The ‘Udaari programme provided support to 200 women by enhancing their skills, while the ‘Saksham programme helped 130 women in developing businesses during the year. As a part of its ‘Ma Ki Roti initiative, the Company established 2 canteens which are run by 14 women. Both initiatives aimed at providing employment opportunities, encourage entrepreneurship, and improve the financial independence of women in the community. Another 75 women benefited from a programme aimed at building craft skills of women artisans and imparting employability in Rajsamand, Rajasthan.

• Environmental Sustainability: 25,934 trees were planted in 2024-25 as a part of ‘Mahindra HariyaW — the tree plantation initiative of the Mahindra Group — taking the total trees planted to 5,65,544 since the beginning of the project in 2010-11. Under its Green Guardians initiative, it distributed 508 smokeless Sarala stoves which are more efficient and can use any agricultural waste as fuel. Solar electrification infrastructure was provided to 173 households. In addition, 38 solar streetlights and off-grid electrification were provided to a school and a Anganwadi in Gir, Gujarat. It also stepped- up its water conservation efforts by rejuvenating 15 water bodies as well as installing rainwater harvesting using rooftops of five school buildings in Puducherry.

Financials

Standalone Financial Results

Table 1 presents the abridged financial statements of the Company as a standalone entity.

Table 1: Financial Information (Standalone)

(Rs. in Crore)
Particulars	2024-2025	2023-2024
Income from Operations	1,400.3	1,314.0
Other Income	144.6	120.1
Total Income	1,544.9	1,434.1
Operating & Other Expenses	1,053.1	1,018.5
Finance cost	44.2	33.7
Depreciation	178.0	158.7
Total Expenditure	1,275.3	1,210.9
Profit Before Tax (PBT)	269.6	223.2
Tax Expenses	69.1	42.6
Profit After Tax (PAT)	200.5	180.6
Diluted EPS (Rs.)	9.94	8.97
Cash & Cash Equivalents	1,555.0	1,383.3
Long-term Debt	-	-
Deferred Revenue	5,736.0	5,595.3

Total Income, which includes both operating and other income, grew at 7.7% from Rs. 1,434.1 crore in 2023-24 to Rs. 1,544.9 crore in 2024-25. Income from vacation ownership, which includes income from sale of vacation ownership products (including interest income on payment plans) and Annual Subscription Fees (ASF) are the largest components of the Companys operating income, grew at 6.4% from Rs. 977.4 crore in 2023-24 to Rs. 1,039.5 crore in 2024-25. Resort Income grew at 7.2% from Rs. 336.6 crore in 2023-24 to Rs. 360.7 crore in 2024-25.

Total Expenditure grew at 5.3% from Rs. 1,210.9 crore in 2023- 24 to Rs. 1,275.3 crore in 2024-25, mainly on account of higher employee expenses, rent, resort expenses and other overheads. In contrast, sales and marketing expenses came down sharply from Rs. 212.3 crore in 2023-24 to 156.7 crore in 2024-25. As a result, PBT grew at 20.8% from Rs. 223.2 crore in 2023-24 to Rs. 269.6 crore in 2024-25. After accounting for taxes, PAT grew at 11.0% from Rs. 180.6 crore in 2023-24 to Rs. 200.5 crore in 2024-25. It must be noted here that PAT, without considering the items in Other Income that are one-off in nature, also reflects a healthy increase of 24.6% from Rs. 157.9 crore in 2023-24 to Rs. 196.7 crore in 2024-25.

Cash balances continued to be strong at Rs. 1,555.0 crore at the end of 2024-25. As a result, the liquidity situation of the Company remains comfortable. The Deferred Revenue pool also increased to Rs. 5,736.0 crore as on March 31, 2025. This provides visibility on future revenues and improved profitability with minimal incremental costs.

The Companys strong balance sheet is further underscored by lack of any long-term debt as a standalone entity.

Table 2: Key Financial Ratios (Standalone)

(Rs. in Crore)
Particulars	2024-2025	2023-2024
Debtors Turnover	1.14	1.10
Inventory Turnover	8.57	8.71
Current ratio	1.85	1.89
Operating profit margin (%)	35.10%	31.60%
PBT margin (%)	17.50%	15.60%
PAT margin (%)	13.00%	12.60%
Return on Net Worth* (%)	11.80%	12.10%

* Net worth has been derived after excluding revaluation reserve of Rs. 998.84 crore and Transition Difference of Rs. 1,402.7 crore.

Table 2 presents key financial ratios for Mahindra Holidays as a standalone entity. As the Company does not have any debt on its standalone balance sheet, Debt Equity and Interest Coverage ratios are not applicable and have not been calculated. None of the ratios reflects a significant change i.e., a change of more than 25% as defined under the revised SEBI Listing Regulations between 2023-24 and 2024-25.

Holiday Club Resorts (HCR)

Holiday Club Resorts Oy ("HCR"), Finland, is a wholly owned subsidiary of Mahindra Holidays through its step-down subsidiary Covington S.a.r.l, Luxembourg. Established in 1986, HCR is the largest vacation ownership company in Europe and the largest operator of leisure hotels in Finland. As of March 31, 2025, HCR had 33 hotel destinations of which 25 are in Finland, 2 in Sweden and 6 in Spain.

Its revenues are split between the timeshare-related business and the hotel business. Its current timeshare membership is about 60,000 families and 1,300 companies. Besides, HCRs Spa Hotels service over 1.3 million guest visits annually.

Table 3: Summary Financials — Holiday Club Resorts

(million €)
Particulars	2024-2025	2023-2024
Total Income	138.2	142.2
EBITDA	4.4	5.0
Profit Before Tax (PBT)	-2.3	-0.6
Profit After Tax (PAT)	-2.1	-0.8

Note: As per FAS Accounts; Figures in € million

During the year under review, total income of HCR, which includes turnover and other operating income decreased marginally from € 142.2 million in 2023-24 to € 138.2 million

in 2024-25. Revenue from Timeshare, Spa Hotels and Villas came down during the year, whereas Renting and Real Estate Management businesses reflected a marginal increase. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased from € 5.0 million to € 4.4 million in 2024-25.

Consolidated Financial Results

For the purpose of consolidation of financial results of the Company, 20 subsidiaries, 1 joint venture (JV) and 2 associates as on March 31, 2025, were considered as per IND AS. Table 4 presents the abridged financial statements of the Company as a consolidated entity. Further details of operational and financial performance of HCR have already been provided.

Table 4: Financial Information (Consolidated)

(Rs. in Crore)
Particulars	2024-2025	2023-2024
Income from Operations	2,780.9	2,704.6
Other Income	129.0	115.0
Total Income	2,909.9	2,819.6
Operating & Other Expenses	2,202.0	2,190.7
Finance Cost	148.2	132.2
Depreciation	366.0	336.6
Total Expenditure	2,716.2	2,659.5
Profit before Share of Profit of JV and Associates	193.7	160.1
Share of Profit of JV and Associates	-1.1	-0.6
Profit Before Tax (PBT)	192.6	159.5
Tax Expenses	66.6	43.5
Profit after Tax (PAT)	126.0	116.0
Diluted EPS (Rs. )	6.33	5.74
Cash & Cash Equivalents	1,606.7	1,500.6
Long-term Debt	987.5	884.1

Total Income increased by 3.2% from Rs. 2,819.6 crore in 2023-24 to Rs. 2,909.9 crore in 2024-25, whereas Total Expenditure increased by 2.1% from Rs. 2,659.5 crores in 2023-24 to Rs. 2,716.2 crore in 2024-25. As a result, PBT after including share in profit/loss of JV and associates grew at 20.8% from Rs. 159.5 crore in 2023-24 to Rs. 192.6 crore in 2024-25. Consolidated PAT, in contrast, grew at 8.6% from Rs. 116.0 crore in 2023-24 to Rs. 126.0 crore in 2024-25. Accordingly, Diluted EPS increased from Rs. 5.74 in 2023-24 to Rs. 6.33 in 2024-25.

The liquidity situation remained comfortable during the year, with improvement in cash balances to Rs. 1,606.7 crore at the end of 2024-25. On consolidated basis, total longterm debt increased to Rs. 987.5 crore as on March 31, 2025, compared to Rs. 884.1 crore at the end of the previous financial year.

Internal Controls

The Company has an adequate internal control system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency.

The Company conducts periodic internal audits in line with an audit plan that is drawn at the beginning of the year and is approved by the Audit Committee. The scope of the exercise includes ensuring adequacy of internal control systems, adherence to management policies and compliance with the laws and regulations of the country. The Companys ERP system has appropriate controls embedded in its processes and systems to reduce the need and reliance for compensating manual controls. These have also been strengthened from time to time.

Internal audit reports are placed before the Audit Committee of the Board of Directors, which reviews the adequacy and effectiveness of the internal control systems and suggests improvements for strengthening them.

Threats, Risks and Concerns

Mahindra Holidays 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 four Directors.

Macroeconomic Risks

The global economic environment is going through significant uncertainty due to the new tariff policies of the US. This may impact global trade and capital flows and result in higher inflation, affecting both business and consumer confidence. Recent projections suggest a deceleration in global growth. This can adversely impact Indias growth prospects and in turn your Companys performance.

Mahindra Holidays recognises these risks. The Company approach for mitigating risks emanating from weak economic performance include its focus on customer acquisition through referrals, alliances and digital leads. Other initiatives to generate robust performance include a complete product portfolio across all life-stage segments, a differentiated product proposition and initiatives to augment member spends at resorts. That it is an aspirational brand and the market leader in its segment augurs well for it in tough times.

Operational Risks

Operational risks mainly relate to meeting customer expectations in terms of quality of service and maintaining a balance between the inventory of resorts and growth of customers. These assume significance given the long service duration of key products. As there are multiple choices of locations and seasons, there could be occasions where the first choice of holiday requested by the members may not be available, which may result in dissatisfaction. Another operational risk is inability to consistently attract, retain and motivate managerial talent and other skilled personnel, especially in a high growth industry with unique characteristics. Further, some of the Companys resorts are in remote areas and natural calamities such as earthquake, flood and landslide may affect the accessibility of the resort to members.

The Company has invested significant resources in systems and processes to mitigate these risks. Customer satisfaction continues to be favourable and on an upward trend. Regarding room inventory, the Company will continue to be judicious in the use of different options — greenfield projects, acquisitions, expanding inventory at existing locations, long term leases and inventory arrangements — to meet the expectations of its customers and at the same time maintain a balance between demand and supply. Regarding talent management and retention, management believes that its HR practices enhance employee engagement and satisfaction to effectively mitigate this risk. The Company is alert to climate risks, including those from extreme weather events. At the same time, it believes that its focus on sustainability mitigates some of these risks by more thoughtful and efficient use of natural resources.

Financial Risks

The Companys business operations involve significant investments in building and upgrading resorts. These expose it to risks in terms of timely and adequate availability of funds at competitive rates to finance its growth. Besides, it offers its customers schemes to finance the purchase of the vacation ownership and similar products, which exposes it to credit risks. The Company is, therefore, exposed to potential risk of non-payment or delayed payment of membership instalments and/or the annual subscription fee by members resulting in higher outstanding receivables. High inflation could potentially increase the cost of resort operations as well as its project and renovation related costs. The Company is also exposed to foreign exchange risks due to its overseas subsidiary companies and debts on their books.

Currently, Mahindra Holidays has no long-term debt on a standalone basis and has a strong and stable capital structure to raise money for further expansion, if needed. The Companys focus on improving quality of sales by increasing down payments and lowering EMI tenures have been very effective in bringing down credit and repayment risks. Even so, it undertakes comprehensive assessment of the profile of its customers and carefully monitors its exposure to credit risk. Several improvements have also been implemented in receivables management and collections to reduce such risks.

Regarding inflation, the Company has strong processes to mitigate these risks through a combination of cost savings measures such as centralised procurement of consumables and inputs for its projects. Suitable price increases are passed to the consumers in the form of F&B charges as well as membership fees. In respect of foreign currency debt, the underlying assets of its overseas subsidiary companies are also in the same currency, minimising the exposure to forex-related risks. HCR has also reduced its debt over the years. However, the risks of mark-to-market movements remain, and the Company monitors the situation closely in this regard.

Regulatory and Legal Risks

Mahindra Holidays is exposed to regulatory and legal risks. These include cumbersome processes and risks relating to land acquisition, conversion of land for commercial usage and development of properties, environmental clearances, approvals and activities related to development of new resorts. There are also other regulatory and legal risks pertaining to tax proceedings, legal proceedings on properties, customer complaints, non-compliance of regulations including environmental regulations and those pertaining to the hospitality sector. Further, as the Company has investments and operations in different countries, it is also exposed to political and regulatory risks that emanate from its international presence.

Mahindra Holidays has adequate systems and controls in place to reasonably mitigate these risks. The Company also believes that its proactive stance on sustainability will hold it in good stead for future development and growth.

Outlook

Despite a deceleration in growth in 2024-25, India continued to the fastest growing large economy in the world. The economic outlook for 2025-26 remains stable, with the RBI projecting a 6.5% GDP growth. Any downside risks today emerge primarily from impact of new tariff policies

of the US. As far as the leisure travel industry in India is concerned, demand continues to be strong and there are considerable opportunities. The growth prospects of the branded leisure segment is even better. Stable growth of the economy is expected to further increase the addressable market base for large discretionary spend categories such as holidays.

This augurs well for a company like Mahindra Holidays which has built an unparalleled ecosystem delivering immersive experiences to its customers. Club Mahindra today is an aspirational brand in the leisure travel and hospitality industry in India — with 125 resorts for its members to choose from. Mahindra Holidays believes in the long-term growth potential of the leisure travel and hospitality industry in India and is committed to grow its room inventory base to 10,000 units by 2029-30 to benefit from this opportunity.

Cautionary Statement

Certain statements in the Management Discussion and Analysis 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 from those expressed or implied. Important factors that could make a difference to the Companys operations include poor macroeconomic growth and consumer confidence, inability to add resorts and increase the inventory of room, cyclical demand and pricing in the Companys principal markets, changes in tastes and preferences, government regulations, tax regimes, economic development within India and other incidental factors.