Gujarat Hotels FY26 Results: Net Profit Up 7% To ₹565.65 Lakh
Gujarat Hotels Limited posted a net profit of ₹565.65 lakh for FY26, up from ₹529.87 lakh in FY25, driven by a rise in profit before tax to ₹714.25 lakh. The company maintained its dividend policy with a proposed payout of ₹3.00 per share. While liquidity metrics softened with a current ratio decline to 47.73, retained earnings strengthened to ₹4,619.39 lakh. The filing highlights ongoing legal proceedings regarding leasehold land and significant related-party transactions with ITC Hotels Limited.
*this image is generated using AI for illustrative purposes only.
Gujarat Hotels Limited reported a net profit of ₹565.65 lakh for the financial year ended March 31, 2026 (FY26), rising from ₹529.87 lakh in FY25. The company’s profit before tax increased to ₹714.25 lakh from ₹693.90 lakh in the prior year. This performance supports the Board’s proposal for a final dividend of ₹3.00 per share, consistent with the payout declared in FY25. Shareholders will vote on these accounts and the dividend at the 44th Annual General Meeting scheduled for August 26, 2026.
The filing was submitted to BSE Limited on August 3, 2026, by Swati, Company Secretary & Compliance Officer, in compliance with Regulations 30 and 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Report and Accounts include the Notice convening the AGM, which will be held on an electronic platform. The record date for the final dividend is July 17, 2026, with payments expected between August 27 and September 2, 2026.
Financial Performance
The company’s total comprehensive income matched its profit for the year at ₹565.65 lakh. Retained earnings grew to ₹4,619.39 lakh from ₹4,167.37 lakh in FY25, after accounting for the current year’s profits and a dividend payment of ₹113.63 lakh. The dividend paid in FY26 was higher than the ₹94.69 lakh distributed in FY25, reflecting the consistent per-share payout against the total equity base.
| Metric | FY26 (₹ Lakh) | FY25 (₹ Lakh) |
|---|---|---|
| Profit Before Tax | 714.25 | 693.90 |
| Current Tax Expense | 106.15 | 94.54 |
| Deferred Tax Expense | 42.45 | 69.49 |
| Net Profit | 565.65 | 529.87 |
| Total Comprehensive Income | 565.65 | 529.87 |
Taxation saw a shift in composition; while current tax expense rose to ₹106.15 lakh from ₹94.54 lakh, deferred tax expense decreased significantly to ₹42.45 lakh from ₹69.49 lakh. This reduction in deferred tax liability contributed to the overall improvement in the bottom line despite a modest increase in pre-tax profits.
Balance Sheet and Ratios
Total assets stood at ₹5,708.12 lakh as of March 31, 2026, up from ₹5,166.91 lakh in FY25. Current assets were ₹5,547.29 lakh, compared to ₹5,014.91 lakh in the previous year. Non-current assets remained stable at ₹160.83 lakh. On the liabilities side, total equity and liabilities matched total assets at ₹5,708.12 lakh. Equity capital remained unchanged at ₹378.75 lakh, while other equity reserves increased to ₹4,921.97 lakh from ₹4,469.95 lakh.
Key financial ratios indicated some pressure on liquidity and returns. The current ratio declined to 47.73 from 64.08 in FY25, a drop of 25.52%. The company attributed this decline to an increase in current liabilities, primarily due to higher salary payables arising from timing differences in payroll processing and an increase in gratuity provisions. Return on Net Worth also dipped slightly to 11.15% from 11.44%, driven by lower contributions from other income.
| Ratio | FY26 | FY25 | Change |
|---|---|---|---|
| Current Ratio | 47.73 | 64.08 | (25.52%) |
| Return on Net Worth | 11.15% | 11.44% | (2.58%) |
Corporate Governance and Related Parties
The Board of Directors comprises six members, with three independent directors constituting 50% of the board strength. All five board meetings held during FY26 were attended fully by the directors present, with attendance rates varying among individuals. Sitting fees were paid to several directors, totaling ₹6.50 lakh across M. S. Bhatnagar, S. Kumar, R. Verma, and S. Sharma.
A significant related-party transaction involves ITC Hotels Limited (ITCHL), a promoter group company. Under an Operating License Agreement renewed for 30 years effective October 1, 2022, ITCHL operates the company’s hotel. During FY26, ITCHL paid license fees of ₹545.09 lakh and reimbursed salary and other expenses amounting to ₹625.02 lakh. These transactions were approved by the Board on July 13, 2022.
Key Audit Matter
The statutory auditor, K C Mehta & Co. LLP, highlighted the evaluation of the uncertain legal position of leasehold land as a Key Audit Matter. The lease period for the land has expired, and the company has filed a writ petition before the Hon’ble High Court of Gujarat, which is pending adjudication. Additionally, an application for conversion of land from leasehold to freehold is under process. The auditor reviewed the management’s assessment and concluded it was reasonable, noting that the High Court has restrained the State Government from disturbing the actual possession of the property.
Historical Stock Returns for Gujarat Hotels
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.63% | -2.38% | -2.33% | -3.52% | -34.67% | +19.24% |
How might the pending High Court adjudication on the leasehold land status impact Gujarat Hotels' long-term asset valuation and operational security?
What strategies is management employing to address the 25.52% decline in the current ratio and stabilize liquidity in FY27?
Could the renewal or renegotiation of the 30-year Operating License Agreement with ITC Hotels Limited influence future revenue stability and license fee structures?
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