ROHLTD - Royal Orch.Hotel

📊 NSE: ROHLTD 🏢 Hotels 📅 Last Updated: 12/14/2025 12:28

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 8.7% YoY to INR 169.6 Cr in H1 FY26. Room revenue increased by 18% YoY, while other services revenue grew by 34% YoY. H1 FY25 revenue was INR 157.6 Cr, up 5.8% YoY, driven by improved occupancy and Average Room Rates (ARR).

Geographic Revenue Split

High geographical concentration with over 40% of inventory located in Karnataka and Gujarat. Rajasthan and Maharashtra each contribute over 10% of the total keys, exposing the company to city-specific volatility.

Profitability Margins

Operating margins stood at 20.7% in H1 FY25, a decline from 26.0% in H1 FY24. This compression was due to sub-optimal occupancy in newly opened hotels, higher employee costs, and renovation expenses. Net profit for Q2 FY26 was INR 4.3 Cr.

EBITDA Margin

EBITDA for H1 FY26 was INR 44.5 Cr, reflecting a 9% YoY growth. Q2 FY26 EBITDA was INR 20.8 Cr, up 7% YoY. OPBDIT/OI margin for FY24 was 28.4% compared to 33.1% in FY23.

Capital Expenditure

Planned maintenance and renovation capex of INR 25.0 Cr for H2 FY25, followed by INR 30.0 Cr each in FY26 and FY27. The asset-light model limits major project capex as 80% of rooms are under management or franchise contracts.

Credit Rating & Borrowing

ICRA assigned a 'Stable' outlook with interest coverage at 4.7x and Net Debt/OPBITDA at 1.7x for FY24. CARE Ratings revised ratings due to non-cooperation and noted delays in debt repayment in the FY24 audit report.

⚙️ Operational Drivers

Raw Materials

Human Capital/Labor (significant reliance), F&B Supplies (perishables), Utilities (Electricity/Water), and Guest Amenities (Plastic/Toiletries).

Import Sources

Primarily sourced locally within India, specifically in states of operation like Karnataka, Gujarat, Rajasthan, and Maharashtra to support regional hotel clusters.

Key Suppliers

Not specifically named, but involves local vendors for F&B and contract staffing agencies for hospitality services.

Capacity Expansion

Current inventory of 6,556 keys as of September 2024 (119+ hotels). Planned expansion to 9,875 keys (including signed hotels) by FY26 and a long-term target of 22,000+ keys by FY30.

Raw Material Costs

Employee costs increased in H1 FY25, contributing to margin contraction. Procurement strategies focus on cost optimization and reducing water and plastic consumption to improve environmental impact.

Manufacturing Efficiency

Efficiency is measured by occupancy rates and ARR. H1 FY25 saw growth in both metrics despite a temporary lull during the General Elections in Q1 FY25.

Logistics & Distribution

Distribution is driven by digital platforms and regional marketing campaigns targeting heritage, wildlife, and staycation segments.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Vision 2030 aims for 3x growth to 345+ hotels and 22,000+ keys. Strategy involves aggressive expansion via management contracts (asset-light), targeting high-growth markets, and focusing on premium pricing and operational efficiency.

Products & Services

5-star and 4-star hotel rooms, economy hotel stays, luxury resorts, service apartments, MICE (Meetings, Incentives, Conferences, and Exhibitions) facilities, and wedding venues.

Brand Portfolio

Royal Orchid, Royal Orchid Central, Regenta Central, Regenta Inn, Regenta, and ICONIQA.

New Products/Services

Launch of ICONIQA Mumbai in Q2 FY26; focus on 'drivable destinations' and curated packages for wildlife and heritage getaways.

Market Expansion

Recent expansion into Punjab, Odisha, Haryana, and Himachal Pradesh to reduce geographic concentration in Western and Southern India.

Strategic Alliances

80% of properties operated under management contracts or franchise agreements with various property owners.

🌍 External Factors

Industry Trends

Shift toward asset-light models to improve ROE; increasing demand for social MICE and weddings; growth in domestic leisure travel to drivable destinations.

Competitive Landscape

Competes with other national hotel chains; maintains competitive ROE of 19% and focuses on premium pricing to differentiate.

Competitive Moat

Moat built on an asset-light model which provides high ROE (19% vs peers) and scalability. Brand diversification across price points (5-star to economy) allows capture of wide guest segments.

Macro Economic Sensitivity

Highly sensitive to economic cycles and global trade; IMF projections of 1.5% lower global trade growth in 2025 due to tariffs may impact business travel and FTAs.

Consumer Behavior

Shift toward staycations, daycations, and road-trip friendly experiences within 300-400 km of major cities.

Geopolitical Risks

Vulnerable to exogenous events such as geopolitical crises, terrorist attacks, and disease outbreaks, as seen during the FY21-FY22 pandemic impact.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI (LODR) and Prohibition of Insider Trading regulations. Subject to data security and privacy risks inherent in the hospitality sector.

Environmental Compliance

Focus on reducing energy, water, and plastic consumption; increasing green initiatives to mitigate exposure to natural disasters and extreme weather.

Legal Contingencies

SEBI issued an order regarding the classification of Ksheer Sagar Developers Private Limited (KSDPL) as an associate instead of a subsidiary in FY22. The Securities Appellate Tribunal (SAT) stayed this order on November 5, 2024. Impairment testing is ongoing for investments/loans in subsidiaries/associates totaling 50% of total assets (approx INR 67.3 Cr).