TGB Banquets & Hotels Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

The global economy maintained steady momentum through Calendar Year (CY 2025), with output expanding by 3.4%, supported by robust technology-related investments and resilient labour markets. Unemployment rates in several regions held near historical lows, and nominal wage growth proved sufficient to sustain real household income, underpinning consumer demand even as the global outlook began to navigate new headwinds. (Source: IMF Outlook, April 2026).

Regional performance was differentiated. The United States remained a primary driver, though a government shutdown late in the year produced a brief deceleration to 0.5% annualised growth before conditions normalised. The Eurozone recovered meaningfully, led by Germany, which contributed to 1.5% annualised growth. Chinas economy accelerated to 6.1% driven by export volumes that more than offset its persistent domestic demand weakness, while India recorded real GDP growth of 7.6%, the highest among major economies.

The conditions of CY 2025 gave way abruptly to a more volatile landscape in early CY 2026. The escalation of the West Asia conflict in late February introduced a material counterforce to the tailwinds that had shaped the previous year, disrupting commodity markets, tightening financial conditions across energy- sensitive sectors, and forcing a broad reassessment of growth trajectories in both emerging and advanced economies.

Outlook

The International Monetary Fund (IMF) has issued a forecast incorporating the West Asia conflict, assuming its most acute disruptions will begin to moderate by mid-2026.

Under this baseline, global growth is projected to decelerate to 3.1% in CY 2026 before recovering modestly to 3.2% in CY 2027. The shock to energy and commodity prices has resulted in IMF adjusting global inflation expectations upward. Consumer price inflation is now forecast at 4.4% in CY 2026 before easing towards central bank targets in CY 2027.

Advanced economies are expected to expand by 1.8% in CY 2026, while Emerging Market and Developing Economies are projected to grew by 3.9% with India leading this group.

World trade volume growth is forecast to slow to 2.8% in CY 2026. A more prolonged or widened conflict in West Asia represents a material risk. Under a severe scenario, global output growth could fall below 2% resulting in a contraction in demand.

INDIAN ECONOMY OVERVIEW

India consolidated its position as the worlds fastest-growing major economy in F Y 2025-26, with real GDP expanding by 7.7%, a notable acceleration from 6.5% recorded in the previous year and a significant outperformance of the IMFs emerging market peer group.

Total goods and services exports reached approximately US$ 860 Billion, sustaining their growth trajectory despite a turbulent global trade environment, impacted by tariffs, currency volatility, and supply chain restructuring.

Domestic demand remained the economys primary growth driver. Private consumption grew by 7.0%, supported by a revival of rural markets, improved financial inclusion, and rising real household incomes.

On the supply side, Gross Value Added, a measure of economic value created across sectors, expanded by 7.3%. Industry and services emerged as the principal engines, growing by 7.0% and 7.5%, respectively, while agriculture contributed a steady 3.1% despite an uneven monsoon. Financial and real estate expansion at 9.9%, reflecting deepening capital market participation and a continued acceleration in organised lendingactivity.

This growth cycle has been further reinforced by the most ambitious public capital formation programme in Indias modern economic history. The Union Budget 2026-27 raised infrastructure expenditure (capex) to Rs. 12.22 Lac Crores, a continued commitment to transport, logistics, and digital connectivity that is compressing distances, integrating underserved regions, and creating new markets for organised commerce and premium demand.

Monetary and fiscal policies operated cohesively to sustain momentum. The RBI reduced the repo rate to 5.25% as of April 2026, a cumulative reduction of 125 basis points from the 6.50% peak of late 2024, providing meaningful relief on borrowing costs for both corporates and households.

On the fiscal side, the government introduced consumption-supportive measures like GST rate rationalisation while maintaining a disciplined deficit target of 4.3% of GDP for FY 2026-27.

India is undergoing a fundamental transformation of its growth architecture. Favourable demographics, large-scale digitisation of economic activity, increasing formalisation across sectors, and a capital-intensive infrastructure programme are collectively creating an economy where growth is less volatile, more geographically distributed, and more durable than at any prior point in its modern history.

This evolution has direct implications for Indias tourism and hospitality sector. The World Travel and Tourism Council ranked India as the worlds 8th largest travel and tourism economy in CY 2025 was a measure of both the scale of domestic demand and the sectors rising contribution to national economic output. The ranking also underscores the opportunity: Indias tourism share of GDP remains below its potential, creating meaningful headroom for further sector expansion as per-capita incomes rise and travel penetration deepens.

According to Goldman Sachs, recent tax data shows a sharp expansion at the top end of Indias income pyramid. The number of taxpayers reporting annual incomes between Rs. 1 Crore and Rs. 5 Crores has doubled to 2.10 lacs individuals, while the ultra-high- income segment earning between Rs. 5 Crores and Rs. 50 Crores has grown strongly from 28,000 to 50,000 individuals. This rapid increase in affluent households significantly expands the addressable market for TGB Banquets & Hotels Limited and its luxury hospitality portfolio. More importantly, it indicates a structural shift in consumption behavior, where luxury hospitality is evolving from an occasional, milestone-led aspiration into a recurring lifestyle preference driven by demand for ultra-premium stays, personalised comfort, exclusivity, and curated travel experiences.

Outlook

India enters FY 2026-27 with the Reserve Bank of India projecting real GDP growth of 6.9% and the government anchoring its fiscal framework to 10% nominal GDP growth.

Future growth will be shaped by high-technology and industrial policy enablers: Semiconductor Mission 2.0, the Rare Earth Corridor initiative, and the Samarth 2.0 textile programme, alongside continued infrastructure expansion.

Inflation is projected to average at 4.6%, with the primary risk arising from a forecast of a below-normal monsoon (92% of long-period average) and residual El Nino dynamics that may exert upward pressure on food prices. Supply side policy vigilance will be required to manage this risk without constraining the monetary support that currently underpins domestic demand.

OVERVIEW OF THE GLOBAL HOSPITALITY AND TOURISM INDUSTRY

The global tourism and hospitality sector has completed its transition from post-pandemic recovery to demand- led growth in CY 2025. International tourist arrivals reached approximately 1.52 Billion, an increase of over 4% from CY 2024, crossing pre-pandemic levels for the first time since 2019.

This milestone reflects renewed global confidence in mobility, driven by sustained leisure demand, the deepening of intra-regional travel within Asia and the Middle East, and the growth of experiential travel demand among higher-income consumer segments Regional performance was characterised by divergence. Europe retained its position as the single largest tourism market, recording approximately 793 Million arrivals, 6% above CY 2019 levels.

The Middle East and Africa continued to outperform the global growth average, with arrivals at 39% and 17% above pre-pandemic levels, respectively, reflecting sustained destination investment and strong positioning across leisure and transit segments.

The Americas recovered to pre-pandemic levels at approximately 219 Million arrivals. Whereas, Asia Pacific, has lagged behind, with approximately 331 Million arrivals and is still approximately 9% below CY 2019 levels.

Across these markets, consumer preferences have evolved in ways that are favourable to premium and luxury operators. Travellers are increasingly allocating discretionary budget towards fewer, longer, and more immersive trips, raising average spend per journey and supporting room rate growth even where occupancy remains below peak.

Luxury travel, particularly in Asia, is shifting from conventional amenity-based propositions towards bespoke, culturally embedded experiences, a repositioning that rewards operators with genuine local depth and service heritage.

Tourism exports reached approximately US$ 2.2 Trillion in CY 2025, representing 8.3% year-on-year growth and an increase of over 25.6% over 2019 levels (UNWTO Tourism Export Barometer), underscoring the sectors expanding economic significance.

OVERVIEW OF THE INDIAN HOSPITALITY AND TOURISM INDUSTRY

Indias tourism and hospitality sector sustained strong growth momentum through 2025, drawing on the same strong foundations that distinguish the broader economy, domestic consumption depth, favourable demographics, and sustained infrastructure investment.

Indias ranking as the worlds 8th largest travel and tourism economy (WTTC, 2025) reflects both the immense scale of its domestic travel base and the sectors advancing contribution to national economic activity. Population exceeding to 1.4 Billion and the rapidly the growing affluent consumer segment, India presents significant long term demand opportunity for hospitality operators.

Aviation activity provides the most immediate measure oftravel volume. Total air passenger traffic reached approximately 420 Million in CY 2025, up by 5% year- on-year, despite global aviation headwinds. Indias large domestic aviation base continued to act as a buffer, supporting occupancy across leisure, business, and event-driven travel segments.

Hotel sector performance reflected this demand resilience. According to the Horwath HTL India Hotel Market Review 2025, nationwide industry occupancy reached 64%, representing a steady 1.1 percentage point improvement year-on-year, while the nationwide average daily rate (ADR) rose by 8.6% to Rs. 8,624. Consequently, nationwide revenue per available room (RevPAR) grew by 10.8% to Rs. 5,522. This performance was substantially amplified in the luxury hospitality segment. This premium tier recorded a superior occupancy level of 68.1%, while its ADR climbed to 8.7% to Rs. 13,379, yielding a commanding RevPAR of Rs. 9,110. While the luxury and upper-upscale segments account for ~34% of total domestic branded supply, they generated a disproportionate 56% of total rooms revenue and 36% of total demand. This distinct divergence highlights a market that has moved well beyond volume-driven recovery to establish genuine consumer acceptance of premium pricing. Such struc tural dynamics fundamentally favour luxury operators with deep brand equity capable of sustaining high rate premiums through evolving demand cycles.

Rising income levels, broadening entrepreneurial activity, and an increased equity market participation are collectively generating a larger, more durable cohort of consumers with both the capacity and the inclination to spend on premium travel experiences.

As affluence deepens, the nature of premium consumption is also evolving. Discretionary spending is migrating from functional upgrades that are intrinsically valuable and difficult to replicate considering extended stays at destination properties, wellness immersions, curated wildlife encounters, and multi- generational celebration travel. This shift directly expands the addressable market for both premium and luxury hotel operators.

Compliance:

TGB deploys a robust internal check process to prevent and limit the risk of non-compliance. The Company approaches compliance from a proactive standpoint and believes in responsive intervention. Compliance with laws and regulations is an essential part of its business operations and it adheres to all national and regional laws and regulations in such diverse areas as product safety, product claims, trademark, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment, and taxes. Nevertheless, the Company is focusing on increasing awareness, documentation and supplementing the expertise of internal professionals with that of independent consultants, as may be required from time to time.

Revenue:

The company recorded revenue of ^ 3847.83 Lakhs during the financial year under review as compared to ^ 3749.18 Lakhs achieved during the previous period.

Expenses:

During the financial year 2025-26 under review, the total expenses were ^ 3823.95 Lakhs as compared to ^ 3775.59 Lakhs in the previous year.

Key financial ratios:

The key financial ratios of the Company are as follows:

1. Debtors Turnover Ratio is 4.89% in financial year 2025-26 compared to 2.22% in the financial year 2024- 25 as Sales of the company has increased during the year.

2. Inventory Turnover Ratio is 7.43% in financial year 2025-26 compared to 8.27% in the financial year 2024-25

3. Interest Coverage Ratio is 1.96% in financial year 2025-26 compared to 2.32% in the financial year 2024- 25 as Company has earned profit during the year.

4. Current Ratio is 3.06 in financial year 2025-26 compared to 3.01 in the financial year 2024-25.

5. Debt equity ratio is 0.07 in financial year 2025-26 compared to 0.05 in financial year 2024-25.

6. Operating Profit Margin of the Company in the financial year 2025-26 is 44.99% as compared to 43.11% in 2024-25.

7. Net Profit Margin is 3.83% in financial year 2025-26 as compared to profit of 5.11 % in financial year 2024-25.

8. Return to net worth is 1.90 % in financial year 2025-26 as compared to profit of 2.56 % in financial year 2024-25 as Profit of the Company has reduced during the year.

Risks and Concerns:

In the last few years the rise in Operating & Manpower costs has been a major cause of concern along with the raising capital needs and of course the various compliances which takes a major component of revenue.

Internal Control Systems and their Adequacy:

The Company has institutionalized an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units. Internal controls provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The internal audit process based on the audits of operating units and corporate functions provides positive assurance. It converges the process framework, risk and control matrix and a scoring matrix, covering all critical and important functions inter alia revenue management, hotel operations, purchase, finance, human resources, and safety. A framework for each functional area is identified based on risk assessment and control, while allowing the unit to identify and mitigate high-risk areas. These policies and procedures are updated periodically and monitored by the Group Internal Audit. The Company aligns all its processes and controls with best practices.

Internal controls are reviewed through the annual internal audit process, which is undertaken for every operational unit and all major corporate functions under the direction of the Group Internal Audit. These reviews focus on:

1. Identification of weaknesses and improvement areas

2. Compliance with defined policies and processes

3. Compliance with applicable statutes

4. Safeguarding tangible and intangible assets

5. Managing risk environment, including operational, financial, social, and regulatory risks

The Boards Audit Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings as well as the review of the resolution mechanism for critical audit issues. The statutory auditors have opined in their report that there are adequate internal controls over financial reporting at TGB.

FINANCIAL RESULTS:

The Companys financial performance for the year ended on March 31, 2026 is summarized below:

(Rs. ln Lakhs)

Particulars	Year ended 31st March,2026	Year ended 31stMarch, 2025
Revenue from Operation	3847.83	3749.18
Other Income	115.85	219.10
Total Revenue	3963.68	3968.28
Less : Total Expenditure	3823.95	3775.59
Profit from Operations before Exceptional Items and Tax	139.73	192.68
Add : Exceptional Items	-	-
Profit before tax	139.73	192.68
Add current Tax	-	-
Less : Provision for taxation	-	-
Less : Deferred tax Liability	(3.74)	(1.68)
Profit after tax	143.47	194.37
Other Comprehensive Income	-	-
Items that will not be reclassified to P &L	3.95	0.46
Re-measurement of defined benefits plans (net of tax)	-	-
Total Comprehensive Income	147.42	194.83

Note: Previous years figures have been regrouped / reclassified wherever necessary to correspond with the current years classification / disclosure and may not be comparable with the figures reported earlier.

COMPANYS PERFORMANCE:

Revenue:

The company recorded revenue of ^ 3847.83 Lakhs during the financial year under review as compared to ^ 3749.18 Lakhs achieved during the previous period.

Profit Before Tax:

Profit before the tax during the financial year ended March 31, 2026 stood at ^ 139.73 lakhs as compared to the Profit of ^ 192.68 lakhs for the previous financial year March 31, 2025

Net Profit:

Net Profit for the financial year ended March 31, 2026 stood at ^ 143.47 lakhs as compared to the Loss of 194.37 lakhs for the previous financial year March 31, 2025.

Material Developments in Human Resources/lndustrial Development Front, including Number of People Employed:

The Companys human-resource initiatives remained focused on attracting and retaining suitable talent, developing operating and managerial capabilities and fostering a performance-oriented culture. Training and development programmes emphasized standard operating procedures, safe product handling, quality management, food safety, customer requirements, digital systems and workplace safety. The Company remains committed to providing employees with opportunities for professional development and building a collaborative, accountable and inclusive work environment.

As of 31st March 2026, the Company had a total workforce of 99 employees. During the year, the Company continued to strengthen its organisational capabilities in line with the expansion of operating volumes, customer channels and geographical presence.

Disclosure of Accounting Treatment:

Standard Accounting procedure has been followed.

Cautionary Statement: Statement in this Management Discussion and Analysis Report, describing the Companys objectives, estimates and expectations may constitute Forward Looking Statements within the meaning of applicable laws or regulations. Actual results might differ materially from those either expressed or implied.

	By Order of the Board of Directors
	For and on behalf of the Board
	Sd/-
Place: Ahmedabad	Narendra G. Somani
Date: July 27, 2026	Chairman & Managing Director
	(DIN: 00054229)