Benares Hotels - Benares Hotels

📊 BSE: 509438 🏢 Hotels & Resorts 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 14% YoY to INR 140.7 Cr in FY 2024-25. Q4 FY 2024-25 saw a significant 38% YoY revenue spike to INR 50.5 Cr, primarily driven by high demand in the Varanasi segment due to the Kumbh Mela and regional travel.

Geographic Revenue Split

Revenue is concentrated in Varanasi, Uttar Pradesh (Taj Ganges and Taj Nadesar Palace) and Gondia, Maharashtra (Ginger). Varanasi remains the primary revenue driver, contributing to the 38% growth seen in Q4 FY 2024-25.

Profitability Margins

Net Profit (PAT) margin for FY 2024-25 was 30.7% (INR 43.2 Cr on INR 140.7 Cr revenue), improving from 29.2% in FY 2023-24. Q4 FY 2024-25 PAT margin stood at 31.9%, reflecting strong flow-through from increased occupancy.

EBITDA Margin

EBITDA margin improved to 45.8% in FY 2024-25 (INR 64.5 Cr) from 43.9% in FY 2023-24. The 190 bps expansion is attributed to strong double-digit revenue growth and efficient cost management across the Taj-branded properties.

Capital Expenditure

The company is in the advanced stages of completing a new wing at Taj Ganges, Varanasi, which includes 100 additional rooms and a new restaurant, scheduled to open in Q3 FY 2025-26. Specific INR Cr project cost was not disclosed.

Credit Rating & Borrowing

The company reported no term loans were taken during the period, indicating a debt-free status or reliance on internal accruals for expansion. Interest costs are negligible as no loan diversions or defaults were noted.

⚙️ Operational Drivers

Raw Materials

Not applicable as a service-oriented hotel business; however, food and beverage supplies and guest amenities constitute the primary operating consumables. Specific % of total cost for these items was not disclosed.

Import Sources

Not disclosed in available documents; typically sourced locally within India for hotel operations.

Capacity Expansion

Current capacity includes Taj Ganges, Taj Nadesar Palace, and Ginger Gondia. Expansion is underway at Taj Ganges to add 100 rooms and one restaurant by Q3 FY 2025-26, significantly increasing the room inventory in the high-demand Varanasi market.

Raw Material Costs

Not disclosed as a specific line item; however, the company maintains a physical verification program for inventory every three years to ensure no discrepancies exceeding 10% occur.

Manufacturing Efficiency

Operational efficiency is measured by EBITDA margins, which reached a robust 45.8% in FY 2025. Management specifically tests occupancy rates and average room rates (ARR) as key inputs for asset valuation.

Logistics & Distribution

Not applicable for hotel services; distribution is handled via IHCL's global reservation system and digital platforms.

📈 Strategic Growth

Expected Growth Rate

14%

Growth Strategy

Growth will be achieved through a 100-room capacity expansion at Taj Ganges opening in Q3 FY2026, leveraging the 'Taj' brand (ranked India's strongest), and capitalizing on religious tourism surges like the Kumbh Mela which drove a 38% revenue increase in Q4 FY25.

Products & Services

Luxury hotel accommodation (Taj Nadesar Palace), upscale lodging (Taj Ganges), midscale lodging (Ginger Gondia), and food and beverage services through on-site restaurants.

Brand Portfolio

Taj, Taj Ganges, Taj Nadesar Palace, Ginger.

New Products/Services

New wing at Taj Ganges featuring 100 rooms and a new restaurant, expected to contribute to revenue starting Q3 FY 2025-26.

Market Expansion

Focusing on the Varanasi market expansion with additional room inventory to capture growing demand from spiritual tourism and regional events.

Market Share & Ranking

Not disclosed; however, the Taj brand is recognized as India's strongest brand across all sectors by Brand Finance 2023.

Strategic Alliances

The company is a subsidiary of The Indian Hotels Company Limited (IHCL), benefiting from their management expertise, brand equity, and global distribution network.

🌍 External Factors

Industry Trends

The hospitality industry is seeing a surge in spiritual and experiential tourism. BHL is positioning itself by expanding its Varanasi footprint by 100 rooms to capture this growing trend, which currently supports a 45.8% EBITDA margin.

Competitive Landscape

Competes with other luxury and midscale hotels in Varanasi and Gondia; however, the IHCL affiliation provides a significant competitive edge in loyalty programs and corporate bookings.

Competitive Moat

The moat is built on the 'Taj' brand equity and the strategic location of its properties in Varanasi, a major perennial tourism hub. This is sustainable due to the high barriers to entry for luxury heritage properties like Nadesar Palace.

Macro Economic Sensitivity

Highly sensitive to tourism trends and government infrastructure spending in religious circuits. The Kumbh Mela was a specific macro driver that boosted Q4 revenue by 38%.

Consumer Behavior

Increasing preference for branded, reliable luxury stays and spiritual tourism, which directly benefits the Taj Ganges and Nadesar Palace properties.

Geopolitical Risks

Not disclosed; however, as a domestic hospitality player, risks are primarily related to internal stability and domestic travel regulations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to hospitality standards and local municipal regulations. The company maintains an audit trail for its accounting software as per Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

Environmental Compliance

Taj Ganges, Varanasi received recognition for outstanding contributions to environmental sustainability from the Travel Welfare Association of Varanasi.

Taxation Policy Impact

The company paid INR 1.82 Lakhs for tax audit services in FY 2024-25. Effective tax rate is consistent with Indian corporate standards.

Legal Contingencies

The company has disclosed pending litigations in Note 30 of its financial statements. While specific values were not in the summary, the auditors noted these impact the financial position as of March 31, 2024.

⚠️ Risk Analysis

Key Uncertainties

Potential impairment of the Gondia hotel unit, which has a PPE carrying value of INR 1,101.32 lakhs and has incurred continuing operating losses since inception.

Geographic Concentration Risk

High concentration in Varanasi; any localized disruption in Uttar Pradesh tourism would significantly impact the 14% annual growth rate.

Third Party Dependencies

Dependent on IHCL for brand licensing and management services. Also dependent on BSE for regulatory compliance, where it recently paid a penalty of INR 10,00,640 for board composition lapses.

Technology Obsolescence Risk

The company is addressing digital requirements by maintaining statutory audit trails in its accounting software and utilizing centralized investor redressal systems like SCORES and SMART ODR.