VHLTD - Viceroy Hotels

📊 NSE: VHLTD 🏢 Hotels 📅 Last Updated: 12/14/2025 15:05

💰 Financial Performance

Revenue Growth by Segment

F&B and Banqueting segments contribute 45% to 48% of total revenue. Management expects a 30% to 35% increase in annual revenue once the current phase-wise renovation of the existing portfolio is completed. Standalone operating income grew 32.28% from INR 40.74 Cr in FY23 to INR 53.89 Cr in FY24.

Geographic Revenue Split

100% of revenue is derived from Karnataka, India, specifically from three hotels located in Bengaluru (Jayanagar and Kumara Park) and Hubballi.

Profitability Margins

Net Profit Margin (PAT Margin) improved from -1.79% in FY23 to 2.80% in FY24. For Q2 FY26, Profit Before Tax (PBT) was INR 4.3 Cr and Profit After Tax (PAT) was INR 4.38 Cr, aided by deferred tax adjustments.

EBITDA Margin

EBITDA margin for Q2 FY26 stood at 27.7% (INR 8.82 Cr), while the H1 FY26 EBITDA margin was 23.4% (INR 13.64 Cr). The Q2 FY26 margin reflects a slight decline from 27.79% in Q2 FY25.

Capital Expenditure

The company is undertaking a material acquisition of SLN Terminus Hotels and Resorts Private Limited and associated land for INR 206 Cr, representing 150.05% of the previous year's consolidated turnover. Additionally, phase-wise renovations are ongoing across the existing portfolio to upgrade MEP (Mechanical, Electrical, Plumbing) equipment.

Credit Rating & Borrowing

CRISIL Rating is 'Stable'. Gearing (Adjusted Debt/Adjusted Networth) was significantly high at 6.23 times as of March 31, 2024, compared to 5.57 times in FY23. Interest coverage ratio was 2.54 times in FY24.

⚙️ Operational Drivers

Raw Materials

Key operational costs include F&B supplies (45-48% of revenue mix) and MEP equipment (generators, chillers, piping) which are critical for back-of-house efficiency.

Import Sources

Not disclosed in available documents; however, suppliers are established through four decades of promoter relationships within India.

Capacity Expansion

Current capacity consists of 3 three-star hotels under 'The President Hotel' brand. Expansion includes the acquisition of SLN Terminus Hotels and Resorts and the addition of a 6th restaurant and 1 bakery to the F&B portfolio.

Raw Material Costs

F&B and banqueting costs are primary, with the segment representing ~45% of revenue. Management is focusing on MEP upgrades to reduce future maintenance cost outliers and protect profit margins.

Manufacturing Efficiency

Bank limit utilization averaged a high 92% for the 12 months ended September 2024, indicating tight operational liquidity.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth will be achieved through a 10% target to beat the 7-8% industry CAGR, supported by a 30-35% revenue jump post-renovation. Strategic expansion includes the INR 206 Cr acquisition of SLN Terminus to strengthen the asset base and prime land ownership, alongside digital transformation to enhance guest experience.

Products & Services

Three-star hotel room stays, banqueting services, restaurant dining (6 outlets), and bakery products.

Brand Portfolio

The President Hotel, Viceroy Hotels Limited (VHL).

New Products/Services

Addition of a 6th restaurant to the existing 5-restaurant portfolio and expansion of bakery services.

Market Expansion

Strategic focus on Hyderabad as a high-growth avenue due to maturing zones like Gachibowli and Madhapur, and expansion into emerging markets through new property developments.

Strategic Alliances

The company works with external operators for its portfolio and has established relationships with suppliers over 40 years.

🌍 External Factors

Industry Trends

The hospitality industry is projected to grow at a 7% to 8% CAGR. Demand in hubs like Hyderabad is currently outstripping supply, driven by medical tourism and global RFPs.

Competitive Landscape

Intense competition from major domestic players and increasing presence of foreign hotel brands in India.

Competitive Moat

Moat consists of 40+ years of promoter experience and ownership of prime land/building assets in high-performing zones like Bengaluru and Hubballi, which ensures stable occupancy.

Macro Economic Sensitivity

Highly sensitive to domestic and international economic cycles; the industry typically follows a six-year cycle.

Consumer Behavior

Rising travel and tourism demand and evolving guest expectations for digital-first experiences.

Geopolitical Risks

Geopolitical uncertainties are noted as risks that may impact global travel patterns and guest arrivals.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI (LODR) Regulations and Section 177 of the Companies Act, 2013. The company underwent CIRP proceedings with new management taking over on 12.10.2023.

Taxation Policy Impact

Effective tax rate impacted by deferred tax adjustments, resulting in a PAT of INR 4.38 Cr against a PBT of INR 4.3 Cr in Q2 FY26.

Legal Contingencies

The company recently emerged from Corporate Insolvency Resolution Process (CIRP) proceedings (12.10.2023). Specific pending court case values are not disclosed.

⚠️ Risk Analysis

Key Uncertainties

High financial leverage (6.23x gearing) and stretched liquidity (0.64 current ratio) pose significant risks to operational agility during economic downturns.