pecos hotels pubs ltd share price Management discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENT:

The past financial year has been one of recovery. After enduring two years of COVID induced disruption, it appears that the worst may be finally behind us. However, the industry landscape has changed to some extent. We are extremely grateful to our returning customers for their loyalty to our establishments and grateful to all our staff who chose to remain with the company in possibly some of the most trying circumstances.

Looking ahead, we are encouraged by the pace of recovery of our industry, although we continue to remain cautiously optimistic. We are not completely out of the woods; we have new macroeconomic conditions to contend with i.e. inflation, and the ongoing crisis in Ukraine continues to cause supply disruptions which have led to an escalation of prices across commodities. We are continuously monitoring these issues and will be proactive in resolving any concerns that arise.

2. OPPORTUNITIES:

As we step into the post COVID era, we consider our company fortunate to be among the few that have survived the pandemic. During COVID we had to resort to many new and innovative ways of connecting with customers and conducting our business; many of these innovations will continue to be part of our new routine. The pace of recovery by the industry has allowed many businesses to explore new growth opportunities, develop new restaurant concepts and return some of the vibrancy that our industry was experiencing pre pandemic. We expect this growth to continue as consumption and spending patterns improve in many of the metros across the country. The improved consumer confidence and increased footfalls are important metrics going forward.

3. SEGMENT WISE OR PRODUCT WISE PERFORMANCE:

Your company will concentrate on consolidating and growing its well-established brand "PECOS" in markets outside Bangalore and other key cities in India. The company is focusing on cities where we are confident that our brand will be well received and develop its own fan following. There is an ongoing process of research and development in this area, to identify new territories and new product verticals.

4. OUTLOOK

The management remains cautiously optimistic for the next year. Pecos continues to benefit from an extremely loyal customer base that has supported us through these difficult times. The next financial year is one of recovery and we intend to use this year to consolidate our operations, and to prepare ourselves for the years ahead.

5. RISKS AND CONCERNS:

Your company has been dealing with business risks such as market competition and staff attrition etc, and we have developed robust risk mitigation systems to address these issues. Regulatory policy especially with regard to alcoholic beverage is a state subject and varies significantly from one state to another. This remains an area of concern for us. With the threat of COVID finally behind us we now face other macro-economic challenges, in particular rising inflation and inflated commodity prices due to supply disruptions caused by the ongoing crisis in Ukraine. We are continuously monitoring these concerns and will be proactive in taking measures to mitigate the risks.

6. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

This past financial year has been one of recovery for your company. However, we are not completely out of the woods yet. We are encouraged by the early numbers from our outlets and we believe this will be a good foundation from where we can rebuild and grow. At an operational level the performance of our units reflects the improved consumer confidence and growing spending patterns seen in our industry. We believe these figures will only improve. Although these are only early signs of recovery, we continue to remain optimistic and are grateful to all our shareholders, employees and our customers who have remained with us through some of our most difficult and turbulent times.

7. MATERIAL DEVELOPMENT ON HUMAN RESOURCES:

The F&B business is highly dependent on human capital. Your company takes full cognizance of this and continues to invest in training and upskilling of staff to optimize their potential. Fresh talent is also introduced in the company whenever and wherever needed. Despite being in an industry that is plagued by alarming attrition rates, your company is blessed with a dedicated and loyal workforce, many of whom have been with the company for decades. We believe our commitment to offer the best possible product and experience to our clientele is shared by each and every member of our team. This dedication to serve, going the extra mile, for our customer continues to be our recipe for success.

For and on behalf of the Board

	SD/-
	Liam Norman Timms
	Whole Time Director
	(DIN: 06453032)
Date: 23-06-2023
Place: Bengaluru