TGBHOTELS - TGB Banquets

📊 NSE: TGBHOTELS 🏢 Hotels 📅 Last Updated: 12/14/2025 14:17

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew by 4.74% YoY to INR 38.06 Cr in FY25 from INR 36.33 Cr in FY24. Growth is primarily driven by the banqueting and catering segments, which saw a significant recovery post-FY22, with FY23 total operating income previously jumping 43.3% to INR 38.38 Cr.

Geographic Revenue Split

100% of revenue is generated from operations in Gujarat, India, specifically centered around its primary hotel property and banquet facilities in Ahmedabad.

Profitability Margins

The company achieved a Net Profit Margin of 5.11% in FY25 (INR 1.94 Cr profit) compared to a negative margin of -9.80% in FY24 (INR 3.56 Cr loss). Operating Profit Margin improved significantly to 43.11% in FY25 from 35.40% in FY24.

EBITDA Margin

PBILDT margin for 9MFY25 stood at 22.24%, a slight improvement from 21.90% in 9MFY24. This follows a period of recovery where the company reported its first operating profit in six years during FY23 with a 12.93% margin.

Capital Expenditure

Not explicitly disclosed for future periods, but the company reduced its long-term bank facilities from INR 9.40 Cr to INR 5.28 Cr in March 2025, indicating a focus on debt reduction over aggressive new capital outlay.

Credit Rating & Borrowing

The company carries a 'CARE B+; Stable' rating as of March 2025. Borrowing costs are linked to bank facilities totaling INR 5.28 Cr, which were reduced from INR 11.00 Cr in 2023.

⚙️ Operational Drivers

Raw Materials

Key operational inputs include food provisions (perishables, dry goods), beverages, and manpower, with manpower and operating costs cited as the primary rising cost concerns.

Import Sources

Sourced locally within Gujarat and India to support hotel and catering operations in Ahmedabad.

Capacity Expansion

Currently operates one three-star hotel property in Ahmedabad along with outside catering and restaurant services. Expansion is contingent on improving liquidity, with a rating sensitivity target to scale operations beyond INR 50 Cr.

Raw Material Costs

Total expenses decreased by 13.8% to INR 37.76 Cr in FY25 from INR 43.80 Cr in FY24, largely due to the absence of the one-time custom duty payment that inflated FY24 costs.

Manufacturing Efficiency

Inventory Turnover Ratio was 8.27% in FY25, slightly down from 8.48% in FY24, indicating stable but slightly slower movement of food and beverage stocks.

Logistics & Distribution

Distribution is primarily through on-site banquet services and local outside catering within the Ahmedabad region.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth is targeted through the scaling of banqueting and catering services for large-scale events like weddings and exhibitions. The company aims to reach a scale of operations beyond INR 50 Cr while maintaining PBILDT margins above 10% to improve its credit profile.

Products & Services

Hotel room stays, banquet hall rentals, event management for weddings and exhibitions, outside catering services, and restaurant dining.

Brand Portfolio

The Grand Bhagwati (TGB), TGB Banquets and Hotels.

Market Expansion

The company is currently focused on sustaining its established presence in the Ahmedabad market rather than geographic expansion.

Market Share & Ranking

Established player in the Ahmedabad three-star and banquet segment; specific market share percentage not disclosed.

🌍 External Factors

Industry Trends

The hospitality industry is currently seeing a favorable demand outlook over the medium term, though it remains inherently cyclical and highly competitive.

Competitive Landscape

Faces intense competition from both local banquet halls and national hotel chains operating in the Gujarat region.

Competitive Moat

Moat is based on the established 'The Grand Bhagwati' brand and a long track record in the Ahmedabad banquet market since 2002. Sustainability is challenged by 'stretched' liquidity and high related-party exposure.

Macro Economic Sensitivity

Highly sensitive to consumer discretionary spending and the 'wedding season' cycles in India, which dictate banquet demand.

Consumer Behavior

Shift toward large-scale destination weddings and professional event management favors TGB's integrated banquet and catering model.

Geopolitical Risks

Low direct impact as operations are domestic, but broader economic shifts affect corporate event budgets.

⚖️ Regulatory & Governance

Industry Regulations

Adheres to national and regional laws regarding product safety, employee health, and environmental standards. Subject to food safety and hospitality licensing.

Taxation Policy Impact

The company follows standard Indian corporate tax treatments; net profit for FY25 was INR 1.94 Cr after tax adjustments.

Legal Contingencies

Paid INR 4.71 Cr in FY24 under an Amnesty Scheme for custom duty defaults related to a non-operational Surat hotel. The company faces ongoing risks from other long-pending statutory liabilities in litigation.

⚠️ Risk Analysis

Key Uncertainties

The primary risk is the 'stretched' liquidity position and the potential for further write-offs of the INR 71.19 Cr extended as loans to other companies, which could erode the net worth base.

Geographic Concentration Risk

100% revenue concentration in Ahmedabad, Gujarat, making the company vulnerable to local economic downturns or regional regulatory changes.

Third Party Dependencies

Significant dependency on related-party entities for the recovery of long-overdue loans and advances to improve liquidity.

Technology Obsolescence Risk

Low risk for core hospitality services, but the company is supplementing internal expertise with consultants to manage evolving compliance and digital needs.