Vidli Restaurants Ltd Management Discussions

Industry structure and development

Despite global uncertainties, the Indian economy demonstrated strong resilience and continued growth. Key metrics included robust GDP growth, moderating inflation, and healthy external finances. Indias GDP grew 6.5% in 2024 25, the highest among major economies. Inflation fell to 2.82% in May 2025, the lowest level since February 2019. Total exports reached a record USD 824.9 billion in 2024 25.

The agriculture sector is expected to rebound to a growth of 3.8 per cent in FY25. The industrial sector is estimated to grow by 6.2 per cent in FY25. Strong growth rates in construction activities and electricity, gas, water supply and other utility services are expected to support industrial expansion. The services sector continues to perform well in FY25. Although, there still remain some uncertainties such as geopolitical tensions, global trade risks etc.

The Indian hospitality sector is undergoing a period of robust recovery and expansion, driven by strong domestic demand, government initiatives, and investments in infrastructure. While it faces challenges like inflation and talent shortages, the outlook for 2024 2025 remains highly optimistic, with record growth in revenue and investor confidence. Indias tourism and hospitality sector is expected to yield revenue exceeding Rs. 5,12,356 crore (US$ 59 billion) by 2028.

Outlook and Opportunities

Indias tourism sector, rich in heritage, culture, and diversity, is emerging as a global favourite and a key driver of economic growth. Key growth drivers in the sector are Domestic Travel, Tier-2 and Tier-3 cities expansion, Spiritual and Wellness Tourism etc. Widespread adoption of AI-driven guest services, automation, and mobile platforms is enhancing guest experience and operational efficiency. Meetings, Incentives, Conferences, and Exhibitions (MICE) segment has fully recovered and is supported by large-scale events, concerts, and the robust Indian weddings market.

The Union Budget 2025-26 has allocated considerable amount to enhance infrastructure, skill development, and travel facilitation. A major initiative includes developing 50 top tourist destinations in partnership with states ensuring world-class facilities and connectivity. There are several committed efforts to boost tourism. According to the Tourism Minister of India, countrys tourism industry is expected to grow with a Compound Annual Growth Rate of 20% in the next couple of decades, driven by the rise in Indias middle-income group and disposable income. The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. International tourist arrivals are expected to reach 30.5 million by 2028.

Indias rich and exquisite history, culture, and diversity are showcased through tourism while also providing significant economic benefits. The consistent efforts of the central and state governments have helped the tourism industry to recover from the COVID-19 pandemic shock and operate at the pre-pandemic level.

Threats, Risks and concerns

Some of the biggest threats or risks faced remains unchanged which are the economic uncertainty, business interruption, failure to innovate or meet customer needs, uncertainty in International Travel, natural disasters, geo-political tension, pandemic risk and health crises. The industry faces an ongoing shortage of skilled employees, high attrition rates. Rising energy costs, food prices, and wage inflation are putting pressure on operational costs and profit margins, particularly for mid-scale and budget enterprises. Maintenance of food safety and hygiene, catering to changing consumer likings are some of the critical factors. The hospitality industry faces inconsistent and complex regulations across different states, including varying laws on licenses and lands. Ever changing scenario demands the industry to adapt to a new reality and innovation to stay competitive in the market. While some of the changes may be temporary, others become permanent as the evolution is inevitable to meet the changing needs and expectations.

Segment wise or product-wise performance

The Company is presently operational in only one segment i.e. hospitality, food products and allied activities.

Internal control systems and their adequacy

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Review of the internal financial controls mechanism of the Company was undertaken during the year under review which covered verification of entity level controls, process level control and IT controls, review of key business processes and analysis of risk control etc. During the period under review, effectiveness of internal financial controls was evaluated. Reasonable Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed.

Our Company has developed a set of rules, systems, policies and procedures to ensure the reliability of financial reports, the effectiveness of the operations and its activities comply with applicable laws, rules, regulations and code of conduct. The Board of directors, management team and other connected personnel of the Company are integral part of the internal control system.

The Company has appointed M/s Pipalia Singhal & Associates, Chartered Accountants, Chartered Accountant firm to carry out the internal audit of the Company for the financial year 2024-2025. The Audit Committee of the Company reviews the internal audit report submitted by the internal auditor and provides suggestion, if any.

Discussion on financial performance with respect to operational performance

The net worth of the Company is Rs. 4,321.53 Lakhs as compared to Rs 1,969.31 Lakhs over previous year. The Secured loans are Rs. 2,528.75 Lakhs as compared to Rs. 1,983.91 Lakhs in the previous year. The turnover of the Company was Rs. 2,270.02 Lakhs as compared to Rs. 1,778.34 Lakhs in the previous year. Further, the Company has earned profit before tax of Rs. 80.55 Lakhs as compared to 107.12 Lakhs in the previous year. The operational performance is illustrated in detail in the financial statement.

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company has always perceived its manpower as its biggest strength. The emphasis is on grooming in-house talent enabling them to take higher responsibilities. As on 31^st March, 2025 the Company has 198 employees on its payroll. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for exemplary contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Companys steady performance.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Sr.	Particulars	Financial Year	Financial Year	YOY	F/A
No.		2025	2024	Change
1.	Debtors Turnover (times)	17.59	12.03	5.56	F
2.	Inventory Turnover (times)	21.87	25.56	(3.69)	A
3.	Interest Coverage Ratio (times)	2.12	5.12	(3.00)	A
4.	Current Ratio (times)	1.65	1.56	0.09	F
5.	Debt Equity Ratio (times)	0.59	1.01	(0.42)	F
6.	Operating Profit Margin (% terms)	14.39	9.94	4.45	F
7.	Net Profit Margin (% terms)	2.67	3.94	(1.27)	A
8.	Return on Net Worth (% terms)	1.44	3.72	(2.28)	A

F Favourable A Adverse

Disclaimer:

Statements mentioned in this report are forward looking statements and based on certain assumptions and expectations of future events which are out of control of the Company and the actual results can differ materially from those reflected herein. The Company assumes no responsibility to publicly amend, modify or revise any statement on basis of any development, information event.

		On behalf of the Board of Directors
		Vikram Kamats Hospitality Limited
Place: Mumbai	Nanette Dsa	Dr. Vikram V. Kamat
Date: 28th May, 2025	Chairperson and Independent Director	Managing Director
	DIN: 05261531	DIN: 00556284