Sayaji Hotels - Sayaji Hotels

📊 BSE: 523710 🏢 Hotels & Resorts 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company reported 9M FY2025 revenues of ~INR 99 Cr, representing a 26% increase over 9M FY2024. This follows a restated revenue of ~INR 115 Cr for FY2023 post-reorganization. Growth is primarily driven by accommodation and food & beverage services across its three brands.

Geographic Revenue Split

Revenue is primarily generated from Tier-II and Tier-III cities in India, including Vadodara, Bhopal, Raipur, and Udaipur. The company operates 27 properties across 23 cities, focusing on high-growth urban centers.

Profitability Margins

Operating profit margins (OPMs) declined to 27.1% in 9M FY2025 from 31.6% in 9M FY2024. This 4.5% margin contraction was caused by significant repairs and renovation work at the Udaipur and Bhopal properties, which offset cost-saving initiatives.

EBITDA Margin

Operating profit margin stood at 27.1% for 9M FY2025. Core profitability is supported by an asset-light model where management contracts yield fixed earnings of ~6-7% of property revenues.

Capital Expenditure

Planned capital expenditure of INR 60 Cr is allocated for adding 48 rooms and 50 villas to the Udaipur property. This will be funded via a sanctioned term loan and a planned INR 50 Cr rights issue expected by April 2025.

Credit Rating & Borrowing

ICRA reaffirmed the long-term rating at [ICRA]BBB+(Stable) in April 2025. Total debt excluding lease liabilities and promoter loans is negligible at INR 0.6 Cr as of December 2024.

⚙️ Operational Drivers

Raw Materials

Key operational inputs include food and beverage supplies, labor, and utilities (electricity and water), which are subject to inflationary pressures.

Import Sources

Sourced domestically within India, primarily from local vendors in the states where properties are located (Gujarat, Madhya Pradesh, Chhattisgarh, Rajasthan).

Key Suppliers

Not specifically disclosed in available documents; however, the company uses a systematic internal control process for procurement across its hotel operating units.

Capacity Expansion

Current capacity is 2,057 rooms across 27 operational properties. Planned expansion includes adding 1,500+ rooms over the next 2-3 years through 22 management contracts in the pipeline.

Raw Material Costs

Rising input costs for food, labor, and utilities are identified as structural challenges. The company uses data-driven decision making and operational flexibility to manage these costs.

Manufacturing Efficiency

National average occupancy levels reached 68-72% in FY2024-25. Sayaji Hotels leverages its established market position to maintain healthy occupancy and improved Average Room Rates (ARR).

📈 Strategic Growth

Expected Growth Rate

11-12%

Growth Strategy

Growth will be achieved through an asset-light expansion model, signing 22 management contracts to add 1,500+ rooms. Additionally, the company is investing INR 60 Cr in the Udaipur property and raising INR 50 Cr via a rights issue to support these expansion plans.

Products & Services

Accommodation (hotel rooms), Food & Beverage (restaurants), and MICE (Meetings, Incentives, Conferences, and Exhibitions) services.

Brand Portfolio

Sayaji, Effotel, Enrise.

New Products/Services

Expansion of the Udaipur property with 50 new villas and 48 rooms is expected to contribute significantly to future revenue once operational.

Market Expansion

Targeting Tier-II and Tier-III cities in India through 22 new management contracts expected to become operational over the next 2-3 years.

Market Share & Ranking

International hotel chains are expected to command 47% market share by 2028, intensifying competition for domestic players like SHL.

Strategic Alliances

Holds a ~30% equity interest in Barbeque Nation Hospitality Limited (BNHL), providing significant financial flexibility.

🌍 External Factors

Industry Trends

The Indian hotel market is projected to grow from USD 35-37 billion in FY2024 to USD 52 billion by FY2027. Trends include a shift toward asset-light models and increased demand for spiritual and MICE tourism.

Competitive Landscape

Faces competition from international hotel chains (47% market share by 2028) and tech-driven alternative accommodation platforms like short-term rentals.

Competitive Moat

Moat is built on healthy brand recognition in Tier-II/III micro-markets and the financial flexibility provided by the ~30% stake in BNHL, valued at ~INR 306 Cr as of March 2025.

Macro Economic Sensitivity

Highly sensitive to GDP growth and domestic travel demand. The Indian hotel industry is projected to grow at 9-11% in FY2024-25, driven by a 12-15% revenue growth in the services sector.

Consumer Behavior

Post-pandemic shift toward heightened hygiene awareness and increased demand for personalized guest experiences and online hotel bookings.

Geopolitical Risks

Geopolitical uncertainties and trade tensions are noted as tempering factors for global growth, though India remains a top performer.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to Swadesh Darshan 2.0 and PRASHAD schemes, with a budget allocation of INR 2,541.06 Cr for tourism in the Union Budget 2025-26.

Taxation Policy Impact

Benefits from tax incentives for hotels in heritage and rural areas. 100% FDI is allowed under the automatic route for the hospitality sector.

Legal Contingencies

The company identifies lawsuits from guests (injuries or property damage) as a risk to the bottom line and maintains internal controls to mitigate these liabilities.

⚠️ Risk Analysis

Key Uncertainties

The market value of the BNHL stake dropped from ~INR 720 Cr in Feb 2024 to ~INR 306 Cr in March 2025, a 57.5% decline, significantly reducing the company's financial flexibility cushion.

Geographic Concentration Risk

Concentrated in the Indian market, specifically Tier-II and Tier-III cities, making it susceptible to regional economic slowdowns and national election disruptions.