Vikram Kamats Hospitality Ltd Management Discussions

Industry structure and development

The Indian economy demonstrated remarkable resilience during FY 2025-26 despite persistent global geopolitical uncertainties, supply chain disruptions and evolving international trade dynamics. As highlighted in the Economic Survey 2025-26, India remained the worlds fastest-growing major economy for the fourth consecutive year, with real GDP growth estimated at 7.4%, driven by robust domestic consumption and sustained investment. Government capital expenditure, resilient private consumption and steady growth across the manufacturing and services sectors continued to support economic activity throughout the year.

The domestic macroeconomic environment remained stable, with inflation moderating to historically low levels and broadly remaining within the Reserve Bank of Indias target range. Stronger balance sheets of corporates and banks, coupled with continued public investment and improving private investment intentions, enhanced the economys resilience against external shocks. While the Current Account Deficit is expected to widen modestly amid global trade tariff pressures and geopolitical developments, Indias macroeconomic fundamentals remain robust, supported by ongoing structural reforms and a favourable investment climate. The Economic Survey projects real GDP growth in the range of 6.8% to 7.2% for FY 2026-27, reflecting confidence in Indias medium-term growth prospects.

The Indian hospitality industry continued its strong growth trajectory during FY 2025-26, driven by robust domestic tourism, increasing business travel, growth in leisure and religious tourism, rising disposable incomes and sustained investments in tourism infrastructure. Healthy occupancy levels, improved average room rates and sustained demand across luxury, upscale, mid-scale and budget hotels supported industry performance. The restaurant segment also witnessed steady expansion, fuelled by changing consumer preferences, organised dining, premiumisation and technology-enabled food delivery platforms. Growth in MICE events, destination weddings and experiential travel further strengthened demand across the hospitality ecosystem.

A key policy development during the year was the implementation of the recommendations of the 56th GST Council Meeting, effective 22 September 2025, which rationalised the GST framework for the hospitality sector. Hotel accommodation with room tariffs up to ?7,500 per day now attracts 5% GST without Input Tax Credit (ITC), while higher tariff categories continue under the 18% GST with ITC regime. The revised tax structure is expected to improve affordability, stimulate demand across the mid-market hospitality segment and enhance the long-term competitiveness of the industry.

The outlook for the Indian hospitality industry remains positive, supported by favourable demographics, rising disposable incomes, increasing domestic and international tourism, improving aviation and tourism infrastructure and continued government initiatives to promote the sector. Demand is expected to remain broad-based across leisure, business travel, MICE, destination weddings and religious tourism.

The Company remains focused on enhancing operational efficiencies, delivering superior guest experiences, strengthening its hotel and restaurant offerings, leveraging digital technologies and pursuing sustainable growth opportunities while maintaining prudent financial discipline. The Company believes that the continued growth of tourism, increasing demand for premium hospitality experiences, expansion into emerging cities and leisure destinations and technology led customer engagement will provide significant opportunities for long-term value creation.

The hospitality industry continues to face risks arising from global economic uncertainties, geopolitical developments, inflationary pressures, rising manpower, utility and food costs, changing consumer preferences, regulatory changes and increasing competitive intensity. As the industry remains closely linked to discretionary consumer spending, any adverse economic developments may impact demand and operating performance.

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

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 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.

The net worth of the Company is Rs. 5,868.83 Lakhs as compared to Rs 4,321.53 Lakhs over previous year. The Secured loans are Rs. 2,678.83 Lakhs as compared to Rs. 2,528.75 Lakhs in the previous year. The turnover of the Company was Rs. 2,922.26 Lakhs as compared to Rs. 2,270.02 Lakhs in the previous year. Further, the Company has earned profit before tax of Rs. 297.73 Lakhs as compared to Rs. 80.55 Lakhs in the previous year. The operational performance is illustrated in detail in the financial statement.

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, 2026 the Company has 171 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.

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.