Sinclairs Hotels Ltd Management Discussions

GLOBAL DEVELOPMENT AND INDUSTRY STRUCTURE

The Indian hospitality industry continued its positive momentum during FY 2025-26, supported by strong domestic travel demand, improving infrastructure, and policy support from the Government of India. Rising disposable incomes, increased urbanisation, and a growing preference for experiential travel have further strengthened the sector. Domestic tourism remained the primary growth driver, while demand from leisure travel, destination weddings, conferences, and corporate events contributed meaningfully to overall occupancy levels.

The sector continues to witness structural transformation with increased participation from organised players, alongside a gradual shift towards asset-light and lease-based operating models. Hotel operators are increasingly focusing on optimising capital deployment, operational efficiency, and brand-led expansion, particularly in leisure and emerging tourist destinations.

Government initiatives aimed at enhancing tourism infrastructure, improving connectivity, encouraging private investment, and promoting India as a global tourism destination continue to support long-term industry growth. The emphasis on sustainable tourism, digital adoption, and ease of doing business has further strengthened the operating environment for organised hospitality players.

OUTLOOK

Industry outlook for the hospitality sector remains favourable over the near to medium term. Sustained domestic travel demand, recovery in international tourist arrivals, and continued momentum in the MICE and wedding segments are expected to support revenue growth. Improved air connectivity, expansion of regional airports, and increased focus on tourism promotion are likely to further augment demand across key destinations.

While consumer preferences continue to evolve towards immersive and personalised experiences, hotels with strong brands, diverse geographic presence, high service standards, and efficient cost structures are well positioned to benefit from these trends. The Company remains cautiously optimistic about growth prospects and continues to focus on strengthening operational performance, enhancing guest experience, and pursuing selective expansion opportunities.

RISKS AND CONCERNS

The hospitality business is exposed to various risks, including macroeconomic fluctuations, inflationary pressures, changes in discretionary consumer spending, and geo -political developments. Adverse weather conditions at key tourist destinations can impact seasonality and occupancy levels. Rising costs relating to power, fuel, food inputs, and employee expenses may impact operating margins.

High taxation levels, denial of input GST in hotels room revenues, regulatory changes, and competitive intensity in certain markets also pose challenges. Additionally, any slowdown in economic growth or disruption in travel sentiment could affect demand across leisure and business segments.

RISK MITIGATION

The Company follows a proactive risk management approach to identify, assess, and mitigate potential risks that could impact its operations and financial performance. Focus on dynamic pricing, tight cost controls, efficient manpower deployment, and minimisation of wastage continues to support margin stability. Multi-skilling of employees at unit levels, adoption of technology-driven processes, and continuous monitoring of operating metrics enhance flexibility and responsiveness across properties.

Sustainability remains an important focus area, with initiatives aimed at optimising energy and water consumption, managing waste responsibly, and reducing the environmental footprint of operations. The Company remains committed to operating responsibly while balancing stakeholder interests.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an adequate and effective system of internal controls commensurate with the size and nature of its business. Well-documented policies and procedures are in place covering financial reporting, operational controls, asset safeguarding, and compliance with applicable laws and regulations. Internal control systems are periodically reviewed and strengthened to ensure reliability, transparency, and operational efficiency.

The internal audit mechanism and statutory audit processes provide assurance on the adequacy and effectiveness of internal controls over financial reporting and operational activities.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Employees continue to be a key strength of the Company and play a vital role in delivering consistent service quality and guest satisfaction. The Company focuses on attracting, training, retaining, and motivating talent through value-based policies, continuous learning initiatives, and a performance-driven culture. Emphasis on employee engagement, skill development, and maintaining a safe and respectful work environment remains integral to the Companys human resource strategy. The Company has also implemented an attractive target based incentive policy in order to spur sales growth and operational efficiency.

FINANCIAL AND OPERATING PERFORMANCE

Sinclairs Hotels Limited continues to be recognised as a trusted and home-grown hospitality brand, known for quality service, strong food offerings, hygienic operations, and transparent business practices. During the year under review, the Company focused on consolidating its operations, improving operating efficiencies, and strengthening its presence across key destinations.

In FY 2025-26, our Company posted a total revenue of 6241.90 lakh ( 5961.36 lakh) and EBIDTA of 2215.39 lakh ( 2,451.10 lakh).

As on March 31,2026, Sinclairs Hotels has a presence across ten destinations within the Country, and the Company is in the process of further expansion. The Company has taken on lease a resort built on palace style with 90 rooms and fine villas, "Sinclairs Palace Retreat Udaipur" and commenced operations on 1st August, 2025.

The Company continues to evaluate capital-efficient growth opportunities to support long-term scalability while maintaining a prudent financial structure.

DISCLOSURE OF ACCOUNTING TREATMENT

The Financial Statements for the year ended March 31,2026, have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, read with Section 133 and other applicable provisions of the Companies Act, 2013.

DETAILS OF SIGNIFICANT KEY FINANCIAL RATIOS ARE AS BELOW:

Particulars	2025-26	2024-25
Debtor Turnover	43.50	43.82
Inventory Turnover	25.23	22.83
Current Ratio	7.52	10.75
Net Profit Ratio	15.28%	26.20%
Return on Capital Employed	9.75%	14.55%

Debt-Equity ratio is not applicable since there are no Borrowings. The details of key financial ratios with explanation is provided in Note 36 of financial statement.