SAJHOTELS - Saj

📊 NSE: SAJHOTELS 🏢 Hotels 📅 Last Updated: 12/14/2025 12:39

💰 Financial Performance

Revenue Growth by Segment

The Hospitality Services segment grew 5.1% YoY, reaching INR 7.63 Cr in H1 FY26 compared to INR 7.26 Cr in H1 FY25. However, Q2 FY26 revenue of INR 3.95 Cr showed a 4.8% decline compared to INR 4.15 Cr in Q2 FY25.

Geographic Revenue Split

100% of revenue is generated within India, primarily from resort operations in Maharashtra (Mahabaleshwar and Satara).

Profitability Margins

Net profit margin compressed significantly from 20.4% in H1 FY25 to 10.7% in H1 FY26. This was driven by a 60.3% increase in total expenses, which rose from INR 4.98 Cr to INR 7.98 Cr YoY.

EBITDA Margin

EBITDA margin declined from 45.4% in H1 FY25 to 37% in H1 FY26. Core profitability was impacted by a 39.6% rise in employee benefit expenses and a 65.3% increase in other operating expenses.

Capital Expenditure

The company has a planned capital expenditure of INR 17.00 Cr for the expansion of existing resorts. As of September 30, 2025, INR 2.12 Cr (12.4%) has been utilized.

Credit Rating & Borrowing

Long-term borrowings surged from INR 0.21 Cr in March 2025 to INR 17.15 Cr in September 2025. Finance costs increased by 2,997% YoY, from INR 3.39 Lakhs to INR 1.05 Cr, reflecting the impact of new debt for expansion.

⚙️ Operational Drivers

Raw Materials

Food and beverages consumed represent the primary raw material cost, totaling INR 75.47 Lakhs in H1 FY26, which is 9.45% of total expenses.

Capacity Expansion

Current capacity is being expanded with a budget of INR 17.00 Cr dedicated to resort infrastructure. INR 2.12 Cr has been spent on this expansion as of Q2 FY26.

Raw Material Costs

Food and beverage costs increased 14.5% YoY from INR 65.92 Lakhs to INR 75.47 Lakhs. Procurement is managed through local sourcing for resort operations.

Manufacturing Efficiency

Not applicable as the company operates in the service-based hospitality sector.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is targeted through the expansion of existing resort capacity (INR 17 Cr project) and a strategic partnership with Lemon Tree Hotels to market 'Saj by the Lake' under the 'Keys Prima' brand, gaining access to a larger customer base.

Products & Services

Hospitality services including resort accommodation, restaurant services (food and beverages), and event hosting.

Brand Portfolio

Saj Hotels, Saj by the Lake, Saj on the Mountains, and Keys Prima (via strategic partnership).

New Products/Services

Expansion of existing resort facilities is expected to contribute to future revenue once the INR 17 Cr project is completed.

Market Expansion

Focusing on strengthening presence in the Maharashtra leisure travel market through resort upgrades.

Strategic Alliances

Strategic partnership with Lemon Tree Hotels for branding and marketing 'Saj by the Lake'.

🌍 External Factors

Industry Trends

The industry is shifting toward branded partnerships to leverage loyalty programs and standardized service levels, as seen in the company's Lemon Tree alliance.

Competitive Landscape

Competes with other leisure resorts and branded hotel chains in the Maharashtra hill station circuit.

Competitive Moat

Moat is built on strategic locations in Mahabaleshwar and brand trust, which is reinforced by the Lemon Tree partnership. Sustainability depends on maintaining service standards.

Macro Economic Sensitivity

Highly sensitive to discretionary spending trends and domestic tourism cycles in India.

Consumer Behavior

Increasing consumer preference for branded hospitality experiences that offer standardized service and safety.

Geopolitical Risks

Low direct impact as operations are localized in Maharashtra, India.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to hospitality standards and local tourism regulations in Maharashtra.

Taxation Policy Impact

The effective tax rate for H1 FY26 was approximately 18.7%, with a current tax provision of INR 25.69 Lakhs on a profit before tax of INR 1.37 Cr.

Legal Contingencies

The company has pending litigations disclosed in Note 30 of the financial statements; however, specific case values were not provided in the summary documents.