Royale Manor Hotels & Industries Ltd Management Discussions

1. OVERALL REVIEW

India remains the fastest-growing major economy in the world. As per the First Advance Estimates of National Income for FY 2025-26, Indias Real GDP growth is placed at 7.4 per cent, showing strong growth momentum sustained from a 6.4 per cent growth in FY 2024-25. Growth has been largely driven by robust domestic demand, private consumption, and fixed investment. On the supply side, the tertiary (services) and secondary (manufacturing/construction) sectors expanded at a faster pace. For instance, during the first quarter of the fiscal year, the tertiary sector grew by 8.0 per cent, with professional, financial, and real estate services showing significant strength, while the secondary sector recorded steady expansion. Manufacturing activity has notably strengthened, and the agriculture sector has provided underlying stability despite structural constraints.

Apart from domestic GDP estimates, other indicators tracking the global performance also point towards complex challenges mixed with growth resilience. Global FDI flows and trade policy risks continue to present challenges due to persistent geopolitical tensions, high borrowing costs, and economic fragmentation. Furthermore, global supply chain risks and tariff uncertainties continue to affect external demand. The Economic Survey 2025-26 highlights that despite these headwinds, Indias external sector has played a long game. Services exports reached an all-time high, while Indias foreign exchange reserves increased to USD 701.4 billion as of mid-January 2026, providing a solid cushion of roughly 11 months of import cover. On the inflation front, a significant disinflationary phase was observed, with headline retail inflation averaging 2.2 per cent during the first half of FY 2025-26.

The global growth trajectory remains cautious. The IMF and other multilateral organizations note risks from geoeconomic fragmentation, expansionary fiscal burdens, and high-frequency trade shifts. The World Bank and global indices reflect a slow but steady decadal growth trend for the global economy averaging around 3.3 per cent. In light of these domestic strengths and external headwinds, the Reserve Bank of India (RBI) has projected Indias real GDP growth forecast for the upcoming period at 6.75 per cent to 6.8 per cent, up from its conservative earlier baseline.

According to the latest UN Tourism (formerly UNWTO) World Tourism Barometer, international tourism has fully recovered from the pandemic crisis, with international tourist arrivals in 2024 reaching an estimated 1.4 billion, representing a virtual 99% recovery of pre-pandemic levels. This momentum continued robustly into 2025, with international tourist arrivals growing by 5% in the first half of 2025 compared to the same period in 2024 (standing 3% above 2019 levels). The economic contribution of the sector has surged, with total export revenues from international tourism hitting a record USD 2.0 trillion, which is roughly 15% above prepandemic benchmarks. Despite global economic headwinds and heightened travel tracking costs, demand remains highly resilient, particularly driven by a strong rebound across Asia and the Pacific markets.

2. SECTOR OUTLOOK IN INDIA

Indias travel industry is on a strong upswing, driven by structured behavioural shifts as post-pandemic "revenge travel" transitions into sustainable, regularized travel habits. According to latest market evaluations and insights from CRISIL Ratings reports, Indias tour and travel operators are projected to maintain doubledigit revenue growth. The momentum in international leisure and outbound travel continues to register record highs, further supported by decentralized growth, where non-metro cities now drive approximately 63% of outbound travel demand. This sustained expansion is fuelled by a combination of factors, including higher disposable incomes, visa-free access or simplified entry processes introduced across multiple countries, and strategic expansions by Indian low-cost carriers into newer destinations across Southeast and Central Asia. Concurrently, domestic tourism has seen an unprecedented surge—reaching record benchmarks of nearly 2.9 billion domestic tourist visits—buoyed by the rise of "micro-holidays" (quick weekend getaways) and highly upgraded infrastructure across critical spiritual, heritage, and regional destinations.

The global footprint of Indias tourism ecosystem has also strengthened significantly. In the biennial Travel and Tourism Development Index (TTDI) published by the World Economic Forum (WEF), India secured the 39^th position globally. These ranking highlights Indias status as the top-performing tourism economy in South Asia, driven by excellent standings in core resource categories, including ranking 6^th globally in Natural Resources and 9^th in Cultural Resources. Substantial multi-year advancements in price competitiveness, air transport infrastructure, and targeted government capital investments—including the operationalization of over 517 new air routes and extensive upgrades to regional airports—have structurally transformed Indias competitive positioning. Additionally, long-term indicators from the World Travel & Tourism Council (WTTC) highlight that Indias travel sector grew by 7.3%, outperforming the global average and setting a trajectory to contribute significantly to the national GDP while supporting roughly 48 million jobs.

3. SWOT ANALYSIS Strengths

• A major strength for our Hotel is its preferred owned brands with its vast portfolio commanding leadership in their market segments. Quality service from the said brand strengthens the market position of hotels giving it its competitive edge as it seeks to take advantage of increasing business. Strengthening individual services in the areas of exclusive business meetings, food and spa to offer a wide spectrum of hospitality services in accommodations and beyond.

• Ministry of Tourism has two major schemes viz. Swadesh Darshan-Integrated Development of Theme- Based Tourist Circuits and PRASHAD Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive for development of tourism infrastructure in the country including historical places and heritage cities.

• The Government of Gujarat strongly initiated the promotion of tourism in Gujarat with the slogan like "Kuch Din to Gujaro Gujarat mein."

• The Indian Government organized many types of International exhibitions and Celebration in Gujarat providing impetus to hospitality industry.

• Launch of the "Incredible India 2.0" Campaign of the Ministry by the Honble President of India during the National Tourism Awards function. The 2.0 Campaign marks a shift from the generic promotions being undertaken across the world to market specific promotional plans and content creation. The Campaign covers the important source markets for Indian tourism and also takes into account emerging markets with significant potential.

• A world level corporate conference viz. "Vibrant Gujarat", providing impetus to hospitality industry.

• The promoters have an established track record, having created a niche for itself in hospitality industry with good brand image for last 30 years.

• A loyal clientele base of corporate built-up over the years, providing a ready customer base.

• Strategic location of the hotel in the immediate vicinity of Airport with well-developed infrastructure gives it an added advantage over other competitors.

• Your Company continuously renovates its properties to meet the increasing competition in the market and insured its property against natural and men made disasters.

• The Ummed Ahmedabad, Ahmedabads first Five star hotel is been fruitfully proceeding its successful journey with all its pride.

• The hotel property of the company is situated just 1km from the airport and in close proximity to the government and developing industrial areas makes this location an apt choice for all the business travelers. The property is surrounded with greenery and perfectly manicured lawns compliment the citys biggest open-air swimming pool. Enjoy the tranquility of our guest rooms and suites, explore local and global cuisines at the 24-hour coffee shop and fine dining restaurant. The hotel is known for patronizing the whos who of the worlds in recent days.

• The GST (Goods and Services Tax) Council announced a cut in the tax rate on hotel room tariffs, a move aimed at giving a boost to the hospitality sector. The GST rate on hotel rooms with tariffs of up to Rs 7,500 per night has been cut to 12% from the existing 18%.

• GST on restaurants eateries has been brought down to 5% irrespective of whether they are air- conditioned or not. If a restaurant is located within the premises of hotels, inns, guest houses, club or any commercial place meant for residential or lodging purposes with a daily tariff of Rs.7500 per day per unit or above, the tax will be 18%.

• Improvement of Road connectivity and Way Side amenities to the important Tourist Destinations with the help of Ministry of Road. Transport & Highways (MoRTH). Ministry of Tourism (MoT) has been pursuing the matter regarding improvement of road connectivity to important tourist destinations with the Ministry of Road Transport &Highways (MoRTH) and had submitted a list of50 Tourism Destinations to MoRTH for taking up in the first phase. MoRTH has been requested to consider setting up of Wayside Amenities, prominent sign-ages and beautification of the area, at a distance of 15-20 km where good road connectivity already exists. Out of these 50 destinations, only 23 fall under the purview of MoRTH / NHAI, where working in progress. The rest comes under the purview of PWD, BRO and the respective State Govt. The Ministry has accordingly addressed letters to the State Governments, PWD and BRO for improvement of road connectivity and provision of way side facilities. Ministry of Tourism is further in the process of finalizing a further list of 50 Tourist Destinations to be sent to MoRTH to take up in the second phase. For this, Ministry is coordinating with States/UTs for their inputs.

3. SWOT ANALYSIS STRENGTHS

• A major strength for our hotel is its preferred owned brands with its vast portfolio commanding leadership in their market segments. Quality service from the said brand strengthens the market position of hotels, giving it a competitive edge as it seeks to take advantage of increasing business. Individual services continue to be strengthened in the areas of exclusive business meetings, food, and spa to offer a wide spectrum of hospitality services in accommodations and beyond.

• The Ministry of Tourism continues to systematically expand its core infrastructure programs. Under the revamped Swadesh Darshan 2.0 (SD 2.0) and Challenge Based Destination Development (CBDD) subschemes, the focus has successfully shifted from broad circuits to holistic, destination-centric tourist experiences. Concurrently, the PRASHAD Scheme (Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive) has scaled up significantly, with 54 major projects sanctioned across 28 States and UTs to enhance livelihoods, security, accessibility, and pilgrim facility complexes.

• The Government of Gujarat strongly initiates the promotion of tourism in Gujarat with highly successful localized media and structural campaigns, continuing its legacy of high-impact catchphrases like "Kuch Din to Gujaro Gujarat mein."

• The Indian Government organizes many types of high-profile international exhibitions, trade pavilions, and cultural celebrations in Gujarat, providing an immense impetus to the hospitality industry.

• Moving past the older legacy campaigns, the Ministry of Tourism is rolling out a major digital relaunch of the Incredible India Campaign. Spearheaded by a modernized branding strategy and the new Incredible India Digital Platform (IIDP), the updated initiative heavily leverages artificial intelligence (AI), immersive digital storytelling, big data analytics, and global influencer partnerships. It intentionally moves away from generic global promotions to hyper-targeted, market-specific plans tailored to modern international travelers.

• A world-level corporate and economic conference, "Vibrant Gujarat", acts as a continuous macro driver, bringing an influx of multinational dignitaries and providing immense cyclical booking volume to the regional luxury hospitality industry.

• The promoters have an established track record, having created a niche for themselves in the hospitality industry with a stellar brand image spanning over 24 years.

• A deeply loyal clientele base of corporate accounts built up over the years provides a steady, high- margin, and ready customer cushion.

• The strategic location of the hotel in the immediate vicinity of the airport with well-developed infrastructure gives it an added advantage over downstream city competitors.

• Your Company continuously renovates its properties to meet the increasing premium competition in the market and maintains robust property insurance covers against natural and man-made disasters.

• The Ummed Ahmedabad, Ahmedabads very first Five-star hotel, continues to successfully proceed on its journey with peak market pride.

• The hotel property of the company is situated just 1 km from the airport. Its close proximity to government offices and developing industrial areas makes this location an apt choice for corporate travelers. The property is surrounded by dense greenery and perfectly manicured lawns that complement the citys biggest open-air swimming pool. Guests can enjoy the tranquility of our premium rooms and suites, or explore local and global cuisines at the 24-hour coffee shop and fine dining restaurant. The hotel remains widely known for patronizing global dignitaries, business leaders, and celebrities.

• The GST (Goods and Services Tax) Councils streamlined tax framework provides clear operational advantages. The GST rate on hotel rooms with tariffs up to T7,500 per night stands at a competitive 12%, keeping mid-to-high tiers accessible.

• GST on regular standalone restaurants and eateries is maintained at a flat 5%. For luxury dining setups located within the premises of hotels with daily room tariffs of T7,500 or above, the structural rate is positioned at 18% to capture premium corporate spending.

• The Ministry of Road Transport & Highways (MoRTH) and the Ministry of Tourism (MoT) have successfully elevated infrastructure connectivity. Under MoRTHs aggressive development pipeline, the government is establishing thousands of state-of-the-art Wayside Amenities (WSAs) every 30 to 50 km along National Highways and Expressways. Moving into a franchise model on private land via the National Highways Logistics Management Limited (NHLML), this robust network integrates electric vehicle charging stations, food courts, and medical clinics, systematically scaling up regional tourist transit and boosting highway-driven hospitality footprints.

Weaknesses

• The hospitality industry remains highly vulnerable to systemic event risks, such as prolonged public health crises, sudden localized administrative lockdowns, regional security disruptions, and sudden changes in government stability. Operating a premium property within a high-traffic zone exposes the company to these unavoidable external shocks. Additionally, macro-financial challenges—including sharp Indian Rupee (INR) devaluations and global foreign currency volatility—can instantly distort crossborder operational procurement budgets and impact premium international booking values.

• Hotel operations are inherently hyper-sensitive to broader economic fluctuations and shifting gross corporate budgets. While domestic business segments continue to serve as a reliable anchor, any threat

of global economic slowdown or persistent inflationary pressures immediately compresses absolute corporate spend, cooling luxury room demand and directly impacting optimal Average Daily Rates (ADRs).

• Because tourism and high-end commercial travel are globally connected phenomena, escalating geopolitical conflicts, air transport corridor fragmentations, and volatile international financial markets present persistent headwinds. The forward visibility of top-tier luxury property bookings remains highly dependent on a stable global security environment. Any persistent cross-border tension or geoeconomic fracturing can abruptly restrict international business traveler flows into major economic zones.

• A structural challenge facing premium properties is the simultaneous pressure of rising operational input costs and intensifying talent crises. Escalating wage bills, driven by structural adjustments in human capital retention, directly compete against bottom-line profitability. When combined with volatile commercial utility tariffs, rising food and beverage (F&B) supply costs, and the ongoing expense of necessary technological upgrades, managing premium profit margins requires aggressive operational oversight.

Opportunities

• Rising Premium Corporate Footprint: Ahmedabads positioning as a premier commercial hub continues to strengthen, driven by the expansion of the Gujarat International Finance Tec-City (GIFT City), localized commercial corridors, and stable policy frameworks. The citys growing global profile allows the hotel to aggressively capture premium corporate, expatriate, and business travel segments.

• UNESCO World Heritage Stature: As Indias first UNESCO World Heritage City, Ahmedabad continues to attract international heritage tourists, cultural researchers, and high-spending leisure travelers, providing a reliable stream of inbound bookings.

• In an environment of cautious global capital deployment, international investors prioritize markets offering structural stability and predictable growth. Gujarat remains a premier destination for foreign direct investment (FDI), and the ongoing momentum from the Vibrant Gujarat Global Summit serves as a direct driver for high-value corporate travel, diplomatic delegations, and multinational conventions.

• The sustained expansion of mega industrial clusters—such as the Sanand Automobile Hub and nearby electronics manufacturing zones—continues to attract high-yield international technical experts, corporate auditors, and global supply chain executives who require premium lodging.

• The accelerating growth of the Gujarati film, OTT, and entertainment industry has increased the movement of high-profile production teams, artists, and media executives. The hotels premium privacy features make it a highly preferred choice for this demographic.

• Spanning four acres of meticulously landscaped gardens, The Ummed Ahmedabad offers a distinct competitive advantage over dense, high-rise urban hotels. The low-rise estate features 91 elegantly appointed rooms and suites styled with custom-crafted teak furniture, classic Indian art, and views of the manicured lawns or the pool. This layout positions the property perfectly to capture high-margin boutique weddings, premium wellness retreats, and exclusive corporate stays.

Threats

• The rapid growth of premium serviced apartments, specialized corporate guest houses, and structured co-living spaces presents an ongoing challenge. These flexible models appeal directly to costconscious corporate travelers and long-stay consultants, creating downward pressure on traditional luxury room volumes.

• Evolving global hospitality standards demand rapid integration of advanced property technologies (such as contactless guest journeys and automated energy management) alongside strict Environmental, Social, and Governance (ESG) compliance. Given high capital costs, executing these rapid, asset-heavy upgrades poses a risk to near-term cash flows.

• Total reliance on volatile foreign tourist arrivals (FTAs) presents inherent risks due to sudden shifts in cross-border travel patterns, air corridor capacities, and international economic conditions. To mitigate this exposure, marketing strategies must be continuously balanced to leverage robust domestic luxury demand alongside international business segments.

4. FINANCIAL PERFORMANCE WITH RESPECT TO OPERTIONAL PERFORMANCE

The financial performance of the Company for the year 2025-26 is described in the Directors Report under the head FINANCIAL RESULTS.

5. SEGMENT WISE PERFORMANCE

The Company has only one segment i.e. Hotel Business.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Internal Control Systems and their Adequacy of the company for the year 2025-26 are described in the Directors Report under the head of Internal Control Systems and Their Adequacy.

7. HUMAN RESOURCE DEVELOPMENT/INDUSTRIAL RELATIONS

During the year, the Company maintained harmonious and cordial industrial relations. No operating days were lost due to strike, lock out etc. Human Resources Development, in all its aspects like training, safety and social values is under constant focus of the management. The Management and the Employees are dedicated to achieve the corporate objective and the targets set before the Company.

During the financial year 2025-26, the company has not received any complaints on sexual harassment and hence no complaints remain pending as of March 31, 2026.

8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

We admire our employees for better performance by taking seminars, exports talk and healthy competition among them. We motivate them to do research and development of Hotel Industries and welcome their suggestion if it achieves the benchmark of our standards. Company understands the value of human capital and tries to preserve and develop it.

9. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREOF, INCLUDING:

Sr. No. Financial Ratios	Year Ended
	31.03.26	31.03.25
1 Debtors Turnover*	14.48	11.37
2 Inventory Turnover	13.81	13.06
3 Interest Coverage Ratio**	09.14	10.50
4 Current Ratio	04.22	06.88
5 Debt Equity Ratio	00.06	00.09
6 Operating Profit Margin (%)***	09.08	12.66
7 Net Profit Margin (%)****	10.56	13.31

* Decrease in trade receivable.

** Increase in Current Liabilities.

*** Decrease in Debt.

**** Decrease in Operating Profit.

10. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof Return on Net Worth for the Current Financial Year ended on 31.03.2026 is 3.79% as compared to 5.16% in Previous Financial Year ended on 31.03.2025.

11. CAUTIONARY STATEMENT

Statements 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 laws and regulations. As "forward- looking statements" are based on certain assumptions and expectations of future events over which the Company exercises no control. The Company assumes no responsibility to publicly amend, modify or revise the forward looking statement on the basis of subsequent developments, domestic and international economic conditions affecting demand, supply and price conditions in the hospitality industry, changes in the Government regulations, tax regimes and other status.

By Order of the Board of Directors	Sd/-
	Vishwajeet Singh U Champawat
Place: Ahmedabad	Chairman and Managing Director
Date: 01/09/2026	(DIN: 00519755)