The Byke Hospitality Ltd Management Discussions

Indian Economy: The Year in Review

India sustained its position as one of the worlds fastest- growing major economies in FY2025-26, remaining the fourth-largest economy in terms of nominal GDP and the third-largest on a purchasing power parity (PPP) basis. The economy demonstrated resilience amid an evolving global environment marked by uneven growth across regions, tight monetary conditions in advanced economies, commodity price volatility, and heightened geopolitical developments in West Asia. Against this backdrop, domestic economic activity was supported by policy continuity, stable demand, and sustained public capital expenditure.

Indias real GDP growth for FY2025-26 is estimated at 7.6% (FY2024-25: 7.1%), supported by government capital expenditure, resilient private consumption, and steady performance across the manufacturing and services sectors. Services remained the primary engine of growth, expanding by an estimated 8.7% and contributing approximately 55- 60% of Gross Value Added. Within services, Trade, Flotels, Transport, Communication and Broadcasting Services - the segment most directly relevant to your Company- grew by around 10.1%, while Financial, Real Estate and Professional Services grew by 9.9%. Manufacturing is estimated to have grown by 11.5% (FY2024-25: 9.3%), supported by production-linked incentive schemes and steady domestic demand, while construction grew at 7.1% and agriculture at 2.4%, aided by an above-normal monsoon.

Inflationary pressures moderated during the year, with CPI inflation remaining broadly within the RBIs tolerance band of 4% ? 2%, aided by easing food prices. Employment conditions remained stable, with the overall unemployment rate estimated at 4.9% in February 2026 and the labour force participation rate steady at around 55.9%. Indias external fundamentals stayed robust: foreign exchange reserves rose to approximately $697.1 billion as of April 3, 2026 (March 2025: $668 billion), sufficient to cover around 11 months of imports, while the Current Account Deficit is expected to remain contained at around 0.8-1.0% of GDP. The debt-to- GDP ratio stood at approximately 56.1%.

Supportive policy actions underpinned demand through the year. The Union Budget 2025-26 introduced revisions to personal income taxation aimed at raising disposable incomes- a favourable backdrop for discretionary categories such as leisure travel and dining - complemented by GST rate rationalisation in September 2025. The Reserve Bank of India implemented cumulative policy rate cuts of 125 basis points. It reduced the cash reserve ratio from 4% to 3%, injecting approximately ?2.5 lakh crore of liquidity into the system and supporting the transmission of lower lending rates and credit growth.

Indias economic outlook for FY2026-27 remains positive, with the RBI projecting real GDP growth of approximately 6.9% and CPI inflation of around 4.6%. Growth is expected to be driven by strong domestic demand, sustained government capital expenditure, and ongoing structural reforms, with services - particularly financial services and hospitality- expected to remain the principal growth engine. Risks to the outlook include global trade protectionism and tariff-related uncertainty, the ongoing West Asia conflict, elevated energy prices, and the possible emergence of El Nino conditions. Nonetheless, Indias relative insulation from global shocks and its continued focus on infrastructure and digital transformation provide a solid foundation for sustained, domestic-led growth.

INDIAN TOURISM & HOSPITALITY SECTOR

In FY2025-26, Indian tourism extended its multi-year upcycle, driven by favourable demographics, rising employment, and increased disposable incomes that continued to fuel strong domestic demand. The sectors expansion was further supported by investments in infrastructure and enhanced regional connectivity, which unlocked new leisure and pilgrimage circuits across the country. As per the World Travel & Tourism Council, the tourism sector accounts for an estimated 9.4% of Indias total employment and contributes around 6.6% to GDP, underlining its significant role in economic growth and job creation.

Government initiatives continued to strengthen destination readiness. Programmes such as Swadesh Darshan 2.0, PRASHAD, Dekho Apna Desh, and community-based tourism initiatives including homestays supported spiritual, heritage, and regional tourism. At the same time, RCS-UDAN expanded affordable regional air connectivity, with dedicated tourism routes operational to improve access to key and iconic destinations- many of them pilgrimage and leisure circuits closely aligned with your Companys destination mix. A facilitative visa regime remained a key enabler for inbound tourism, with Indias e-visa facility covering nationals of 172 countries as of December 2025.

Tourism numbers reflected this positive momentum. During calendar year 2025, India recorded 9.02 million foreign tourist arrivals and foreign exchange earnings of approximately ?27,363.8 crore, while domestic tourist visits stood at approximately 4,132.8 million - the demand base most relevant to your Companys predominantly domestic, leisure-led portfolio. Domestic travel continued to be propelled by leisure tourism, weddings, festive gatherings, business functions, and corporate travel.

The hotel industry posted another encouraging year. As per Horwath HTL, national occupancy stood at approximately 64% in 2025 (2024: 63.0%), while the average daily rate (ADR) rose by around 8.5% year-on-year to approximately ?8,624 and revenue per available room (RevPAR) increased by around 8.7% to approximately ?5,522. Importantly, supply additions remained measured- ICRA projects demand growth of 8-10% CAGR against supply growth of only 5-6% over FY2025-FY2028 - a demand-supply imbalance that is expected to sustain occupancy and pricing, including across select Tier 2 and Tier 3 markets where your Company has historically concentrated its presence.

A defining policy development for the affordable segment

Effective September 22, 2025, the GST rate on hotel rooms priced up to ?7,500 per day was reduced to 5% (without input tax credit). This measure improves affordability, simplifies taxation, and supports demand in the mid-scale and budget segments. It is significant for those whose room inventory sits substantially within this price band. While the loss of input tax credit represents a trade-off for operators, the net effect is expected to enhance the value proposition and price competitiveness of affordable, largely domestic stays.

Outlook for the Indian hospitality sector

The Indian hospitality sector is expected to remain firm in FY2026-27, supported by resilient domestic leisure travel and MICE demand, with room rates likely to hold. According to ICRA, industry revenues are projected to grow by approximately 7-9% year-on-year in FY2026-27, with occupancy and average room rates continuing to improve. Beyond traditional tourism, niche segments such as spiritual journeys, destination weddings, and M.I.C.E. events continue to gain momentum, while improved air and rail connectivity and rising passenger traffic broaden access to emerging destinations. Near-term performance may be affected by geopolitical developments in West Asia and related aviation disruptions, which could keep fuel, logistics, and utility costs elevated; however, the medium-to-long-term structural drivers - rising discretionary spending, an expanding middle class, and the emergence of Affluent India seeking meaningful, experiential travel- remain firmly intact.

In this dynamic environment, Byke stands well-prepared to lead within its category. Its differentiated identity as one of Indias pioneering pure-vegetarian hotel and resort chains, its concentration in the affordable and mid-scale segments most directly supported by the recent GST rationalisation, its predominantly domestic and leisure-oriented demand base that is relatively insulated from global travel volatility, and its asset-light mix of owned, leased, and managed properties collectively provide flexibility, reach, and resilience. Complemented by a broadening ecosystem across food and beverage and celebration services, and underpinned by a strong financial foundation and efficient operations, Byke is positioned not merely to ride the wave of expansion but to set new benchmarks in Indias hospitality industry.

B. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE BUSINESS OVERVIEW

The Byke FHospitaIity Limited has established itself as a leading name in Indias mid-market hospitality sector, catering to the evolving needs of the modern traveller. With a footprint spanning across 12 states and 22 cities, the Company operates a portfolio of over 1744 rooms across 35 properties, which it owns, manages, and operates through a combination of ownership, long-term lease, and management contracts. At the heart of Bykes identity is its commitment to a purely vegetarian dining experience across its restaurants and banquets. This distinctive philosophy resonates deeply with Indian travellers and increasingly appeals to international guests, positioning Byke as a sought- after destination in a competitive landscape.

Bykes success story is rooted in a genuine connection with its guests and a clear focus on delivering meaningful experiences. As a risingforce in Indias mid-market hospitality sector, Byke has adopted an asset-light model that has proven resilient through recent economic and geopolitical challenges. Rather than merely weathering difficult periods, the Company has used them to refine its approach, staying committed to quality, value, and innovation. At its core, Byke is more than a hotel chain- it is a promise of value, trust, and forward-thinking hospitality.

Building on this foundation, the Company delivered revenue growth of 10.39 % during the year. Our strategic vision remains to expand our footprint towards 100 hotels and resorts across the country by 2030. In line with this goal, we have successfully made eight properties operational and have acquired three new properties which are on track to become operational in due course, with several further projects underway as we continue to broaden our operational capabilities and scale our presence across diverse markets.

Our foundation is built on a forward-looking mindset: for us, growth means more than reacting - it is about anticipating what lies ahead. We do not wait for challenges to arrive; instead, we proactively seek out opportunities within uncertainty. Adaptability is woven into our culture, enabling us to explore new ideas and capitalise on emerging possibilities while navigating challenges with confidence, always with a focus on sustainable, long-term success.

Hotel Management & Operations

During the year, the Company operated a total of 35 properties. During the financial year under review, this business contributed revenue of ? 106.69 crore, of which rooms generated ? 66.27 crore and food & beverage (restaurants and bars) and events generated ? 40.42 crore. The Company generally manages properties under longterm operating leases of 10-20 years. Refurbishment and rebranding are completed during a rent-free period of three to six months, followed by a focus on stronger management, marketing, and distribution capabilities across room sales and F&B/event revenues. Notably, the F&B, restaurants, and events business continuestogrowfasterthan room revenue, reflecting the deliberate diversification of the Companys revenue base.

C. WAY FORWARD

Travel in India is undergoing a quiet revolution. More people than ever are discovering the joy of exploring their own backyard- whether a spontaneous weekend escape, a festive family gathering, or a milestone celebration. While leisure trips still set the pace, business travel is steadily carving out its own space. Within this shifting landscape, mid-range options that strike a balance between value and comfort are emerging as the heartbeat of the market- precisely the space in which Byke has built its reputation.

But for us, travel isnt only about destinations; its about the people behind thejourneys. We see every travelleras unique, with stories, dreams, and reasons that go beyond ticking places off a list. That is why we are building experiences that fit real lives- from family holidays filled with laughter, to solo trips of self-discovery, to purposeful business travel that keeps the wheels turning.

Indias hospitality sector is booming, and we are expanding thoughtfully alongside it. Our focus is sharp: deliver quality without pricing people out, and grow in a way that keeps us connected to the travellers we serve. We are not chasing growth for its own sake - we are aiming to be a trusted companion on every journey. The recent reduction in GST on affordable rooms further strengthens our proposition, reinforcing the value we offer to the value-conscious domestic traveller at the core of our business.

Looking ahead, we know the future belongs to those who listen and adapt. We are embracing new ideas and technologies that simplify booking and planning, making travel feel less like a task and more like an opportunity. By staying curious and responsive, we are not just keeping pace with Indias evolving travel story- we are helping to write its next chapter.

RISK MANAGEMENT

In our industry, we are focused on delivering a great experience every time - high-quality service, excellent amenities, distinctive vegetarian dining, and affordable prices, wrapped in a few unique touches that set us apart. This commitment has earned us the trust and recognition we value. At the same time, we recognise that our industry faces its share of challenges, whether from intense competition, unforeseen events, or occasional service lapses. That is why we have implemented a robust risk management framework that enables us to identify potential issues early and act before they become problems, protecting our operations, our reputation, and the satisfaction of our guests.

Our risk management framework

Our approach to risk management is centred on maintaining business continuity and safeguarding the value and trust we have established in our brand. Our Board-level risk management committee closely monitors the framework, and we regularly review performance and adjust internal processes to stay ahead of emerging challenges. Transparency is central to our approach: by identifying and addressing potential risks quickly we protect what we have built, sharpen our competitive edge, and make better strategic decisions.

Key risks faced by the Company

Competition: Our competitive landscape is marked by growing interest from major brands seeking to expand their reach and depth in the sizeable mid-market category, alongside smaller, individual players growing through word- of-mouth and new-age, tech-enabled platforms. Mitigation approach: We continually strengthen our brand through exceptional guest experiences, compelling offers, and expanding reach, while leaning on our distinctive pure- vegetarian positioning as a durable differentiator.

Unforeseen events denting demand: Socio-economic stability fuels travel demand for both business and leisure; unexpected events - pandemics, geopolitical instability, natural disasters - can profoundly affect the hospitality industry. Mitigation approach: Your Company has deliberately diversified towards F&B, restaurants, and events alongside core hospitality, with this revenue stream continuing to grow faster than room revenue, while steadily improving service standards to support higher occupancy and average room rates.

Seasonality and cyclical nature of the business: The majority of travel is seasonal or cyclical, driven by weather and location- specific events, with revenues typically higher in the second half of the financial year. Mitigation approach: We undertake marketing and branding activities throughout the year to sustain top-of-mind recall, and offer attractive promotions aligned with seasonal trends and the competitive landscape.

Business continuity risk: Accidents such as fires, natural disasters, and infrastructure failures could adversely affect operations. Mitigation approach: We undertake regular maintenance and upkeep of all properties, adhere diligently to applicable safety regulations, and conduct periodic safety audits, while our pan-India presence helps mitigate geographic concentration risk.

E. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The size and scale of our business demand a systematic approach to ensuring optimal operational performance and sound decision-making, enabling sustainability and growth. Your Company has instituted a multifaceted internal control system encompassing checks and balances across critical operational practices, ensuring full compliance with applicable norms and regulations, and supporting continuous monitoring, maintenance, and upgradation of services, human resources, and information technology infrastructure. The Audit Committee has established our system of internal controls, which the Board oversees.

The Committee periodically reviews audit findings and monitors the implementation of internal audit recommendations through compliance reports. Adequate corrective actions are taken when needed and communicated transparently to the Board. To ensure objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

F. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During FY 2025-26, The Byke achieved a revenue of T106.69 crore from its hotel operations, along with an EBITDA of T670.45 crore (reflecting an EBITDA margin of 6.28%) and a Profit After Tax of T6.70 crore, delivering a PAT margin of 6.28%. Earnings per share stood at T1.28, while return on capital employed and return on equity were 15.59% and 2.90%, respectively. The Company maintained a strong financial foundation with a low debt-to-equity ratio of 0.07 times, ensuring ample liquidity and financial flexibility to drive future growth initiatives.

HUMAN RESOURCES

Our people are the cornerstone of our success and the key drivers behind our ability to deliver outstanding guest satisfaction consistently. Recognising their vital role, we have built a culture that places immense value on our human resources- one anchored in fairness, mutual respect, and dignity, and oriented towards growth and support. As of March 31, 2026, the Company employed 1123 people. During the reporting period, we launched several initiatives designed to engage and support our employees:

Mindfulness Training: We introduced mindfulness training to help employees carry out their duties with greater focus and presence, enhancingtheir ability to handle personal and professional challenges, reducing stress, and contributing to overall well-being.

Comprehensive Orientation Sessions: We provide extensive orientation for new hires that immerses them in our corporate culture, values, and mission, ensuring they feel welcomed, supported, and ready to contribute from day one.

Specialised Training Programs: We provide specialised training for frontline staff covering operational risk, audit, compliance, and regulatory aspects, equipping them to navigate their roles with confidence and competence in an industry where precision and adherence to standards are paramount.

These initiatives reflect our deep commitment to nurturing a supportive and enriching work environment. By investing in our people, we are investing in the future of our Company- sustaining our growth and ensuring we continue to meet the evolving needs of our guests with excellence and integrity.

STRATEGY & GROWTH

At Byke, we have transformed the challenges and experiences of the past into powerful lessons that guide our future growth. Periods of disruption tested our resilience, but they also provided valuable insights that we now use to strengthen our business and expand our horizons. Our strategy is built on expanding our reach and enhancing our capabilities, allowing us to tap into new opportunities across high-value, rapidly growing regions. As we evolve, our focus remains on staying true to what makes Byke unique - our dedication to quality, guest satisfaction, and innovation- as we position ourselves at the forefront of one of the markets most promising and high-potential segments, ensuring growth that is not just rapid but sustainable.

RESOURCES AND LIQUIDITY

As of March 31, 2026, the Companys net worth stood at T 231.47 crore, while total debt was: T 16.75 crore. The Company held cash and cash equivalents of T 3.97 crore at the end of the year, providing a comfortable liquidity buffer to support operations and fund planned expansion.

HEALTH AND SAFETY

Your Company adheres to all safety protocols, rules, and regulations set by regulatory authorities regarding fire and building safety, personnel safety, health, and sanitation. We are committed to providing a safe and conducive work environment for our people. Health and safety is a standing item across all Board meetings, supported by a robust reporting, monitoring, and implementation mechanism.

FOOD SAFETY, HYGIENE AND CLEANLINESS

As a pure-vegetarian hospitality group, food safety is central to our identity. Your Company is committed to continually improving each propertys Food Safety Management System, with audits conducted regularly to ensure adherence to FSSAI guidelines and standards. We conduct periodic staff training and internal food safety workshops to reinforce best practices in food safety, hygiene, and cleanliness across our hotels.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis report describing the Companys projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include demand-supply conditions, raw material prices, changes in governmental regulations and tax regimes, economic developments within the country, and other factors such as litigation and labour negotiations.