TGB Banquets & Hotels Ltd Management Discussions

GLOBAL ECONOMY OVERVIEW

In 2024, the global economy exhibited resilience amid a challenging environment. Inflation rates eased toward central bank targets, supported by steady growth in major economies. Although labour markets showed signs of slight softening, unemployment rates remained near historic lows, underscoring the overall strength of economic activity. Real household incomes improved due to nominal wage growth and declining inflation. Geopolitical tensions and uncertainty surrounding the U.S. presidential election contributed to intermittent volatility in financial markets. With a GDP growth of 3.2% for the year, the world economy reflected a spirit of cautious optimism, steadily advancing amid evolving macroeconomic conditions and persistent structural headwinds.

Within the advanced economies, the U.S. reported a robust growth of 2.8%, while the Eurozone grew by 0.9%, with Germany reporting negative growth for the second consecutive year. Chinas economy had a moderate 5% growth owing to weak consumer demand and the slowing property sector. India, on the other hand, emerged as one of the fastest-growing economies in the world.

Global inflation eased from 6.8% in 2023 to an estimated 5.9% in 2024, driven by softening labor markets and easing prices for food, energy, and commodity. Advanced economies neared central bank targets, enabling room for monetary easing.

Outlook

The International Monetary Fund (IMF) has revised its global growth forecasts downward due to escalating trade tensions, notably due to the United States implementation of sweeping tariffs. These measures have prompted retaliatory actions from key trade partners, leading to heightened global trade tensions and a shift toward economic realignment.

Global Growth is forecasted at 2.8% in 2025 and 3.0% in 2026, reflecting a deceleration from previous estimates (Reuters). Advanced Economies are expected to grow at 1.4% in 2025 and 1.5% in 2026, with the United States projected to grow at 1.8% and the Eurozone at 0.8% in 2025.

Emerging Markets and Developing Economies, however, are anticipated to expand by 3.7% in 2025 and 3.9% in 2026, with India leading at 6.5% growth in both years (Business Today). Global inflation is projected to ease more gradually than previously anticipated in 2025 to 4.3% and 3.6% in 2026 (IMF)

In summary, the global economic landscape is transitioning to a phase of slower growth, influenced by protectionist policies and geopolitical uncertainties. While advanced economies face subdued expansion, emerging markets, particularly India, continue to exhibit resilience. Inflation is on a downward trajectory, though challenges remain in aligning with central bank targets across regions.

INDIAN ECONOMY OVERVIEW

India remains the worlds fastest-growing large economy, with real GDP growth projected at 6.5% in FY 2024 25, in line with its ten-year average. Exports of goods and services crossed US$ 820 billion, marking a 6% year-on-year increase despite global challenges. On the demand side, private consumption is expected to grow by 7.3%, driven by a revival in rural spending. Supply-side growth is supported by a projected 6.4% rise in gross value added (GVA), with agriculture expected to grow by 3.8%, industry by 6.2%, and services by 7.2%. The services sector continues to be the main growth driver, supported by strong performances in finance, real estate, and public services.

Infrastructure development has progressed significantly, particularly in transport. Key achievements include the expansion of the railway network, modernisation efforts under the PM GatiShakti involving 434 projects worth . 11.17 lakh crore, improved port efficiency, and the national highway network growing to 1.46 lakh kilometres. In aviation, 91,000 crore has be n allocated for ongoing capital expenditure, and 619 regional routes have been made operational under UDAN.

Looking ahead, India is expected to maintain its growth momentum. The IMF forecasts GDP growth of 6.2% in 2025 and 6.3% in 2026, while the RBI projects 6.5% for FY 2025 26 and 6.7% for FY 2026 27. Key growth enablers include strong agricultural output, early signs of manufacturing revival, and resilience in the services sector. Inflation is expected to be moderate to 4.0%, though global and weather-related risks remain.

To boost growth further, the government has allocated 11.21 lakh crore for capital expenditure in FY 2025 26 and plans to revitalise 50 major tourist destinations. Additionally, the RBI has cut the repo rate to 6.0% to support borrowing and demand, and income tax reductions are expected to spur consumption. With solid fundamentals and policy support, India is well-positioned to sustain high growth in the coming years.

Outlook

The industry is set for strong growth in 2025, riding the wave of strong domestic tourism and a steady revival in inbound arrivals. Infrastructure upgrades are further boosting the sectors performance. In a significant push, the FY 2025-26 Union Budget earmarked 2,541 crore for tourism, with plans to develop 50 new destinations. Parallelly, the commercial office space market is fueling hospitality growth, with 2024 gross leasing hitting 89 million sq. ft. and net absorption at 50 million sq. ft. across key cities. A 16% uptick is expected in 2025, driven by Global Capability Centres (GCCs), IT/ITeS and tech startups. This commercial momentum is sparking business and MICE travel demand, paving the way for mixed-use developments of offices, hotels and retail. While global trade shifts could impact cross-border travel, continued public-private collaboration will be vital in cementing Indias rise as a premier global hospitality hub.

OVERVIEW OF THE GLOBAL HOSPITALITY AND TOURISM INDUSTRY

The Global Travel & Tourism industry remains well poised for expansion following remarkable recovery from the Covid-19 pandemic. During the year, the industry continued to witness resurgence in both leisure and business travel. As per UN Tourism, tourist arrivals worldwide grew by 11% in 2024 over the previous year, registering a 99% recovery from pre-pandemic levels. Most destinations exceeded their 2019 levels; however, arrival of tourists in Americas and Asia Pacific remained slightly behind their pre-pandemic levels.

The year 2024 saw robust growth in tourism earnings. As per UN Tourism, the total international tourism receipts in real terms reached $ 1.6 trillion growing by 3% over the previous year and 4% over 2019. As per World Travel and Tourism Council (WTTC), the Travel & Tourism sector accounted for 10.0% (US$ 10.9 trillion) of the global GDP and 10.6% (356.6 million jobs) of total jobs in 2024. Strong demand for travel & tourism, robust performance in large source markets, increased air connectivity and enhanced visa facilitation have contributed to the impressive recovery in global travel & hospitality industry.

OVERVIEW OF THE INDIAN HOSPITALITY AND TOURISM INDUSTRY

In FY 2024-25, Indian Hospitality industry sustained its strong growth momentum, establishing new benchmarks. Growth continued to be driven by economic stability, favorable demographics, robust domestic demand outpacing supply and the governments thrust on improving infrastructure and connectivity in the country.

Indias tourism sector, rich in heritage, culture, and diversity, is emerging as a key driver of economic growth playing a vital role in the Indian economy. As per WTTC, the direct economic contribution of the Travel & Tourism sector to the Indian GDP in 2024 was 20.9 trillion (growth of 19.9% over 2019), contributing 6.6% to the overall GDP of the country. Additionally, the sector has contributed appx. 9.1% (46.3 million jobs) of total jobs in 2024, exhibiting a healthy 16.3% growth over 2019.

During the year, the sector witnessed robust growth, with domestic air passenger traffic exceeding 2019 (pre-pandemic) levels by 12%. Foreign tourist arrivals, while growing over the previous year by 1.5%, remained below pre-pandemic levels by 12%, indicating significant headroom for growth. The Government of India reinforced its strong commitment in positioning India as a global leader in tourism by enhancing its thrust on infrastructure creation, boosting employment and promoting diverse tourism segments, including spiritual, medical and heritage tourism. Tourism sectors large economic multiplier effect is expected to contribute towards Indias transition into one of the worlds leading developed nations by 2047.

With over 2 lakh keys across segments, India still remains significantly underpenetrated in comparison to the global hospitality industry. As of 2023, India had 0.27 hotel keys per thousand people, which was considerably lower than the then global average of 2.2 hotel keys per thousand people. Indias favorable demographic profile also present unique opportunity for the hospitality sector going forward. Indias urban population, second largest in the world, comprised of 35-37% of its total population in 2024, significantly below the global average of 57%. The number of cities with more than 1 million population, is expected to increase from 52 in 2011 to appx. 75 in 2024. Increasing urbanisation is leading to emergence of new Tier 2 & Tier 3 cities in India with huge potential for economic activity thereby creating new jobs, attracting favorable investments and development of multiple business sectors including hospitality. The luxury segment of the hospitality sector, in particular, is experiencing substantial growth, fueled by rise in disposable incomes and a large, expanding base of travelers willing to invest in high-end travel experiences.

Your Company is premium Hotel was launched in 2002 and the business today is established as one of Indias pre- eminent hospitality chains, embodying the essence of Indian hospitality and sustainability. Rooted in Indian ethos, your Company is redefining the luxury hospitality experience and is focused towards enabling authentic indigenous experiences for the guests. From iconic luxury to intimate retreats, your Companys hotels provide diverse offerings each deeply rooted in Indias cultural fabric with an unwavering commitment of service excellence. Your Company today is renowned for its culinary excellence, with several award- winning restaurant brands and iconic food and beverage cuisines, which come together to serve indigenous dining experiences. Your Company, a exemplar in sustainable hospitality, embodies the ethos of ‘Responsible Luxury by seamlessly integrating luxury with environmental and social responsibility.

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 3805.66 Lakhs during the financial year under review as compared to 3633.47 Lakhs achieved during the previous period.

Expenses:

During the financial year 2024-25 under review, the total expenses were 3775.59 Lakhs as compared to 4380.20 Lakhs in the previous year.

Key financial ratios:

The key financial ratios of the Company are as follows:

1. Debtors Turnover Ratio is 2.03% in financial year 2024-25 compared to 1.97% in the financial year 2023-24.

2. Inventory Turnover Ratio is 8.27% in financial year 2024-25 compared to 8.48% in the financial year 2023-24

3. Interest Coverage Ratio is 9.43% in financial year 2024-25 compared to 2.88 in the financial year 2023-24 as Company has earned profit during the year.

4. Current Ratio is 3.01 in financial year 2024-25 compared to 2.78 in the financial year 2023-24.

5. Debt equity ratio is 0.05 in financial year 2024-25 compared to 0.07 in financial year 2023-24 due to Reduction in Debt of the Company.

6. Operating Profit Margin of the Company in the financial year 2024-25 is 43.11% as compared to 35.40% in 2023-24.

7. Net Profit Margin is 5.11 % in financial year 2024-25 as compared to profit of (9.80) % in financial year due to Due to Company has earned profit during the year.

8. Return to net worth is 2.56 % in financial year 2024-25 as compared to profit of (4.70) % in financial year 2023-24.

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, 2025 is summarized below: ( In Lakhs)

Particulars	Year ended 31st March,2025	Year ended 31stMarch, 2024
Revenue from Operation	3805.66	3633.47
Other Income	162.62	392.54
Total Revenue	3968.28	4026.01
Less : Total Expenditure	3775.59	4380.21
Profit from Operations before Exceptional Items and Tax	192.68	(354.20)
Add : Exceptional Items	-	-
Profit before tax	192.68	(354.20)
Add current Tax	-	-
Less : Provision for taxation	-	-
Less : Deferred tax Liability	(1.68)	1.82
Profit after tax	194.37	(356.01)
Other Comprehensive Income	-	-
Items that will not be reclassified to P & L	0.46	7.48
Re-measurement of defined benefits plans (net of tax)	-	-
Total Comprehensive Income	194.83	(348.53)

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 3805.66 Lakhs during the financial year under review as compared to 3633.47 Lakhs achieved during the previous period.

Profit Before Tax:

Profit before the tax during the financial year ended March 31, 2025 stood at 192.68 lakhs as compared to the Profit of (354.20) lakhs for the previous financial year March 31, 2024

Net Profit:

Net Profit for the financial year ended March 31, 2025 stood at 194.37 lakhs as compared to the Loss of 356.01 lakhs for the previous financial year March 31, 2024.

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

	By Order of the Board of Directors
	For and on behalf of the Board
	Sd/-
Place: Ahmedabad	Narendra G. Somani
Date: August 13, 2025	Chairman & Managing Director
	(DIN: 00054229)