Savera Industries Ltd Management Discussions

a) INDUSTRY STRUCTURE AND DEVELOPMENTS

The hospitality industry in India is a vital part of the countrys service sector and plays a significant role in economic growth, employment generation, and tourism development. In 2026, the industry comprises several interconnected segments, including accommodation, food and beverage services, travel and tourism, event management, and wellness tourism. The accommodation sector includes luxury, upscale, mid-scale, budget, boutique hotels, resorts, homestays, serviced apartments, and hostels, catering to diverse customer preferences and budgets. The food and beverage segment consists of restaurants, cafes, quick-service restaurants, catering services, cloud kitchens, and bars, while the travel and tourism segment includes tour operators, travel agencies, online travel platforms, and transport providers. The industry is further supported by the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector, wedding tourism, and wellness services such as spa, yoga, Ayurveda, and medical tourism.

In 2026, the Indian hospitality industry continues to experience strong growth, driven primarily by rising domestic tourism, increasing disposable incomes, improved transportation infrastructure, and supportive government initiatives. Hotel chains are expanding rapidly into Tier-II and Tier-III cities, where demand is rising due to better road connectivity, regional airports, business activities, and religious tourism. The luxury and premium hotel segments are also witnessing significant investment as travelers increasingly seek high-quality accommodations and personalized experiences. Experience-based hospitality, including heritage stays, eco-tourism, wellness retreats, and destination dining, has become a major competitive advantage for hospitality providers. At the same time, technology is transforming operations through mobile check-in, contactless payments, artificial intelligence-powered customer service, smart room technologies, and advanced hotel management systems that enhance operational efficiency and guest satisfaction. Sustainability has also become a key focus, with hotels adopting energy-efficient buildings, water conservation measures, waste management practices, and renewable energy to reduce their environmental impact. Despite challenges such as skilled workforce shortages, rising operating costs, and increasing competition from alternative accommodation providers, the outlook for the Indian hospitality industry remains positive. Continued investment, infrastructure development, digital transformation, and growing demand for travel and tourism are expected to support sustainable growth and strengthen Indias position as one of the worlds fastest-growing hospitality markets.

Major Developments in the Hospitality Industry (2026)

1. Contactless Technology

Mobile check-in and check-out

Digital room keys

QR-code menus

Contactless payments

Self-service kiosks

2. Sustainable Hospitality

Energy-efficient buildings

Solar energy adoption

Water conservation systems

Plastic-free initiatives

Waste reduction and recycling

Green certifications

3. Wellness Tourism

Spa and wellness programs

Fitness facilities

Healthy dining options

Mental wellness retreats

Medical and preventive wellness packages

4. Experience-Based Hospitality

Hotels increasingly focus on unique guest experiences through:

Local cultural activities

Personalized services

Adventure tourism

Culinary experiences

Community engagement

5. Hybrid Hospitality Models

Properties increasingly combine:

Hotels

Co-working spaces

Long-stay accommodation

Residential units

Wellness facilities

Social spaces

6. Revenue Optimization

Hotels are using:

Dynamic pricing

Revenue management software

Data analytics

Customer segmentation

Real-time demand forecasting

7. Human Resource Development

Continuous employee training

Digital skills development

AI collaboration skills

Employee wellness programs

Flexible work arrangements .

8. Premium and Luxury Growth

Demand for luxury and premium travel continues to grow, with guests expecting highly personalized services, exclusive experiences, and technology-enabled convenience.

b) OPPORTUNITIES AND THREATS

(i) Opportunities

The hospitality industry offers numerous opportunities for growth due to the continuous expansion of global tourism, increasing business travel, and rising disposable incomes. The adoption of advanced technologies such as Artificial Intelligence (AI), mobile applications, online booking systems, contactless payments, and smart hotel solutions has enhanced customer convenience and operational efficiency. Growing awareness of environmental sustainability has created opportunities for eco-friendly hotels and green tourism initiatives. The increasing popularity of wellness, medical, and adventure tourism has encouraged hotels and resorts to develop specialized services such as spas, fitness centers, and wellness retreats. The expansion of the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector has increased demand for quality accommodation and event facilities. In addition, the growth of boutique hotels, luxury resorts, cloud kitchens, food delivery services, and personalized guest experiences has opened new business opportunities. The industry also generates significant employment and entrepreneurship opportunities in hotel management, food and beverage services, travel agencies, event management, and tourism-related businesses.

(ii) Threats

Despite its growth potential, the hospitality industry faces several significant threats. Economic instability, inflation, and recessions can reduce consumer spending on travel and accommodation. Labor shortages and high employee turnover continue to challenge service quality and operational efficiency. Rising costs of food, energy, wages, and maintenance increase operating expenses and reduce profit margins. The industry also faces intense competition from hotel chains, boutique properties, vacation rentals, and online booking platforms. Cybersecurity threats, including data breaches and online fraud, pose serious risks because hotels manage large volumes of customer information. Health crises such as pandemics can severely disrupt travel and tourism, while climate change and natural disasters can damage infrastructure and discourage visitors. Additionally, rapidly changing customer expectations require continuous investment in technology and service innovation. Hospitality businesses must also comply with complex legal, environmental, health, safety, and data privacy regulations, while political instability, terrorism, and travel restrictions can negatively impact tourist arrivals and business performance. Overall, the industrys long-term success depends on its ability to adapt to these challenges while delivering high-quality, sustainable, and customer-focused services.

War Impact on the Indian Hospitality Industry

The ongoing geopolitical conflicts in West Asia during 2026 have affected Indias hospitality industry through higher travel costs, disrupted supply chains, and reduced international travel. However, the sector has shown resilience due to strong domestic tourism and continued investment in new destinations.

c) SEGMENT WISE PERFORMANCE

The Company has only one segment viz hoteliering. Accordingly, the performance is furnished hereunder.

Total turnover for the year ended 31st March,2026 amounted to 1,06,27,49,069/-increased by 22,86,41,808 as compared to the previous year turnover of 83,41,07,261/. Total expenditure for the year ended 31st March 2026 amounted to 92,09,27,621/-increased by 24,08,84,522/- as compared to the previous year. The profit (EBITDA) before depreciation, finance cost and tax for the year ended 31st March,2026,amounted to 23,86,10,884/-as against the profit of 19,44,51,017/- over the corresponding period last year. The deferred tax for the year ended 31st March,2026 amounted to NIL. After accounting for taxes the Company reported a Profit after Tax for FY 2025-26 of 12,81,66,246/-in comparison with a Profitof 13,24,15,863/- for FY 2024-25.

d) OUTLOOK

The Indian hospitality industry is expected to maintain strong growth in 2026, supported by robust domestic tourism, increasing business travel, expansion of the MICE

(Meetings, Incentives, Conferences, and Exhibitions) segment, weddings, religious tourism, and improving international tourist arrivals. Rising disposable incomes, better road, rail, and air connectivity, and government investment in tourism infrastructure are encouraging travel across metropolitan cities as well as Tier II and Tier III destinations. Industry forecasts indicate that hotel occupancy is likely to remain around 72 74%, while average room rates (ARR) and revenue per available room (RevPAR) are expected to continue growing, reflecting healthy demand and disciplined pricing.

Luxury, premium, and boutique hotels are expected to perform particularly well, supported by strong domestic demand and rising spending on leisure and experiential travel. At the same time, branded hotel chains are expanding rapidly into emerging cities, creating new investment and employment opportunities. Market studies also project continued long-term growth for Indias hospitality market, driven by urbanization, a growing middle class, and increased tourism demand.

Despite this positive outlook, the industry faces challenges such as rising operating costs, skilled workforce shortages, cybersecurity risks, inflation, and global economic uncertainties. However, continued investment in infrastructure, digital transformation, sustainable tourism, and service excellence is expected to strengthen Indias position as one of the worlds fastest-growing hospitality markets. Overall, the outlook for the Indian hospitality industry in 2026 remains highly positive, with sustained growth expected through innovation, expanding domestic travel, and increasing global recognition of India as a leading tourism destination.

e) RISK AND CONCERNS

The Indian hospitality industry has a positive growth outlook in 2026, but it also faces several risks and concerns that could affect its long-term performance. One of the major challenges is the rise in operating costs, including expenses for energy, food, employee salaries, maintenance, and utilities. Inflation and higher fuel prices can increase travel and transportation costs, reducing profitability for hotels and restaurants. Industry analysts also note that global energy price shocks and broader economic uncertainty remain important risks for India.

Another significant concern is the shortage of skilled manpower. Many hotels continue to face difficulties in recruiting and retaining qualified employees, leading to higher labor costs and potential declines in service quality. High employee turnover and the need for continuous training make workforce management a major challenge. At the same time, hotels must invest in digital skills as technology becomes more integrated into operations

The industry also faces increasing competition from new hotel developments, boutique hotels, homestays, serviced apartments, and online accommodation platforms. To remain competitive, businesses must continuously improve service quality, adopt new technologies, and offer unique guest experiences. Cybersecurity is another growing concern, as hotels rely heavily on digital booking systems and store sensitive customer information, making them vulnerable to data breaches and cyberattacks.

In addition, hospitality businesses must comply with evolving environmental regulations, taxation policies, labor laws, and health and safety standards. Meeting sustainability goals while controlling costs requires significant investment in green technologies and efficient operations. Despite these concerns, Indias hospitality industry remains resilient, and organizations that focus on innovation, employee development, digital transformation, sustainability, and customer satisfaction are expected to be better positioned for sustainable growth in 2026.

War Impact on the Indian Hospitality Industry (2026)

1. Decline in Foreign Tourist Arrivals

2. Flight Disruptions and Higher Airfares

3. Rising Operating Costs

4. Supply Chain Disruptions

5. Business Travel and MICE Sector

6. Workforce Changes

f) INTERNAL CONTROL SYSTEMS AND ADEQUACY.

The hospitality industry operates in a highly dynamic environment involving accommodation, food and beverage services, event management, and customer service. As hotels and hospitality businesses handle significant cash transactions, inventories, customer information, and operational activities, a strong internal control system is essential to ensure efficient operations, safeguard assets, prevent fraud, and maintain high service standards. Internal control systems consist of policies, procedures, and monitoring mechanisms that help organizations achieve operational efficiency, financial accuracy, regulatory compliance, and customer satisfaction.

In the hospitality industry, internal controls cover all major departments, including the front office, housekeeping, food and beverage, purchasing, stores, finance, human resources, and information technology. Financial controls ensure that revenue from room bookings, restaurants, banquets, and other services is accurately recorded and reconciled. Inventory controls monitor the purchase, storage, and usage of food, beverages, linen, and other supplies to minimize waste, theft, and pilferage. Procurement controls require proper authorization, vendor evaluation, and competitive purchasing to ensure transparency and cost efficiency. Human resource controls include employee background verification, payroll management, attendance monitoring, and regular training. Information technology controls protect guest data, online booking systems, and payment information through secure networks, access controls, and cyber security measures.

The adequacy of the internal control system is assessed through regular internal audits, management reviews, compliance checks, risk assessments, and continuous monitoring of business operations. Hotels also use standard operating procedures (SOPs), segregation of duties, approval hierarchies, surprise inspections, and automated property management systems (PMS) to strengthen internal controls. These measures help identify operational risks, improve service quality, ensure compliance with legal and regulatory requirements, and enhance financial reporting. Although no internal control system can completely eliminate all risks, an effective and adequate system provides reasonable assurance that assets are protected, fraud is minimized, operations are efficient, customer information remains secure, and organizational objectives are achieved. In 2026, the growing adoption of digital technologies, Artificial Intelligence (AI), cloud-based management systems, and real-time data analytics has further improved the effectiveness and adequacy of internal control systems across the hospitality industry.

g) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE /BUSINESS PERFORMANCE.

Particulars	31.03.2026	31.03.2025	% of change
Food and Beverages	5414.44	3681.22	47.08
Rooms	3885.82	3434.52	13.14
Banquet Halls	150.02	160.85	-6.73
Spa Collections	174.50	161.52	8.04
Gym Collections	464.70	411.99	12.79
Franchise	-	6.01	-100
Other Services	142.38	109.60	29.91
Other Income	395.63	375.38	5.39
Overall Income	10627.49	8341.07	27.41
Occupancy (%)	84	80.5	3.5

Overall Income increased by Rs. 2286.41 from Rs. 8341.07 to Rs. 10627.49. Occupancy increased by 3.5% from 80.5% to 84%.

h) MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT.

Your company sincerely believes that its employees are its vital assets and hence in order to keep its employees motivated and changed, your company provides them good environment, so that they are able to leverage their full potential. The HR department updates its HR polices, SOP practice and processes so as to enable and empower its employees.

Your company provides the following welfare and HR activities to the companys employees. (APR2025 MAR2026)

Tamil new year celebration

Iftar celebration

Ganesh Chaturthi celebration

Onam festival

Diwali, Ayudha Pooja, Christmas, Navratri, Pongal are celebrated with staff

Staff Day Celebration

Pongal Vizha

Staff children summer camp

Food wastage awareness

Effective Communication Training

Transactional Analysis Training

Parikshan Training & Fostac Catering training

Inter-departmental Trainings

Food Safety Training

First aid class

Safety and Fire Fighting awareness programmes for staff.

Communication class for supervisory level

Train the Trainer Training program

Personal and Professional Effectiveness training by Mr. Ravi Ramanathan

Medical camp for all staff

Common Staff Birthday celebration every month

International Chef Day

Christmas Carnival

By giving these schemes and training programmes, the employees become loyal to the company and thereby the employee attrition rate is minimized. The overall attrition rate is 3%. Promotions and recognition awarding policies, training and development, skill program are used as effective tools by HR for improving employee productivity

(I) KEY FINANCIAL RATIOS

Key Financial Ratios	31.03.2026	31.03.2025	Difference
Debtors Turnover	7.66	7.70	(0.56)%
Inventory Turnover	42.25	54.40	(22.34)%
Interest Coverage Ratio	19.73	33.65	(41.37)%
Current Ratio	2.19	1.97	11.00%
Debt Equity Ratio	0.00	0.02	(82.76)%
Operating profit Margin (%)	27.07	29.65%	(8.70)%
Net Profit Margin (%)	12.53	16.62%	(24.65)%
Return on Networth	13.84	15.92%	(13.03)%

Cautionary Statement

The information contained in the Management Discussion and Analysis regarding Companys estimates, expectations, projections, guidance are based on assumptions and expectations of future events. The Company takes no responsibility on such statements since the Company exercises no control over the events that takes place in future. The actual results may differ from those expressed or implied. The Changes in the domestic and global economic conditions and government regulations, tax laws and other statutes may affect the hospitality industry.