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Apeejay Surrendra Park Hotels Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤4th Feb 26

Summary : Apeejay Surrendra Park Hotels reported Q3 FY26 revenue growth but profit decline, while actively expanding its hotel portfolio through strategic acquisitions.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total expenses (Q3 FY26): Rs. 129.43 crores (up from Rs. 113.00 crores in Q3 FY25).
  2. Consolidated Total expenses (9M FY26): Rs. 358.55 crores (up from Rs. 307.81 crores in 9M FY25).
  3. Consolidated Revenue from operations (Q3 FY26): Rs. 200.06 crores (up from Rs. 177.49 crores in Q3 FY25).
  4. Consolidated Revenue from operations (9M FY26): Rs. 523.58 crores (up from Rs. 454.13 crores in 9M FY25).
  5. Consolidated Segment Revenue - Hospitality (Q3 FY26): Rs. 199.78 crores.
  6. Consolidated Total Segment Assets (Q3 FY26): Rs. 2,009.33 crores.
  7. Consolidated Total Segment Liabilities (Q3 FY26): Rs. 680.07 crores.
  8. Conversion of unsecured loan to OCRPS with wholly-owned subsidiary Apeejay North-West Hotels Private Limited.
  9. Both standalone and consolidated financial results are presented.
  10. Consolidated results include 6 subsidiaries.

Corporate Overview

  1. Juhu, Mumbai (Maharashtra)
  2. Kerala (including Kochi)
  3. Assessing and accounting for the financial impact of new Labour Codes.
  4. Primarily engaged in owning, operating, and managing hotels (Hospitality segment).
  5. Factual and formal, reporting on financial results and strategic acquisitions.
  6. Hospitality
  7. Others
  8. Expanding through acquisition of hotel properties.
  9. Acquired Zillion Hotels and Resorts Private Limited (Juhu, Mumbai) for Rs. 224.76 crores.
  10. Acquired Fishermans Grove Resorts Private Limited and Thali Hotels and Destinations Private Limited (Kerala) for Rs. 20.50 crores.
  11. Entered SPA for Cochin Residency Private Limited (Kochi, Kerala) acquisition, pending conditions.
  12. Converted unsecured loans to Optionally Convertible Redeemable Preference Shares (OCRPS) in subsidiary.

Risk Factors

  1. Regulatory changes impact financial results.
  2. Acquisition conditions may not be met.
  3. Integration challenges for new hotels.
  4. Market demand fluctuations.

Key Drivers

  1. Acquisition of new hotel properties.
  2. Strong revenue growth in hospitality.
  3. Strategic expansion into new markets.
  4. Conversion of loans to equity.

Auditor’s Report

  1. Unmodified conclusion on the unaudited standalone and consolidated financial results.
  2. Reliance on review/audit reports of other auditors for certain subsidiaries.

Board Commentary

  1. Proposed and paid a final dividend of Re. 0.50 per share for FY ended March 31, 2025, totaling Rs. 10.67 crores.
  2. Impact of new Labour Codes on financial results.
  3. Unmet conditions precedent for the Cochin Residency Private Limited acquisition.
  4. Government of India notified four Labour Codes (Wages, Industrial Relations, Social Security, Occupational Safety, Health and Working Conditions) consolidating 29 existing labour laws. The Company assessed and accounted for an incremental impact of Rs. 1.40 crore as an exceptional item.
  5. Acquisition of Zillion Hotels and Resorts Private Limited for Rs. 224.76 crores.
  6. Acquisition of Fishermans Grove Resorts Private Limited and Thali Hotels and Destinations Private Limited for Rs. 20.50 crores.
  7. Planned acquisition of Cochin Residency Private Limited (Malabar House) in Kochi, Kerala.
  8. Conversion of Rs. 70.47 crores, Rs. 12.60 crores, and Rs. 8.20 crores unsecured loans to OCRPS in subsidiary.

Corporate Governance

  1. Audit & Risk Management Committee reviewed and recommended financial results.

Management Discussion & Analysis

Future Strategy

  1. Continued expansion through hotel property acquisitions.
  2. Monitoring regulatory changes for compliance and financial impact.

Operational Focus Areas

  1. Integrating newly acquired hotel properties.
  2. Assessing and adapting to new Labour Code regulations.

Performance Drivers

  1. Revenue growth driven by hospitality operations.
  2. Strategic acquisitions contributing to asset base expansion.

Risk Control Measures

  1. Assessed and accounted for incremental impact of Labour Codes.
  2. Monitoring finalisation of Central/State Rules and clarifications.

Critical Risks

  1. Financial impact from new Labour Codes.
  2. Conditions precedent for acquisitions not being met.