Ventive Hospitality Limited has successfully resolved a significant income tax assessment matter, achieving complete elimination of a substantial tax demand through regulatory procedures.

Tax Demand Rectification Details

The company filed a Rectification Application under Section 154 of the Income-tax Act, 1961 with the concerned Assessing Officer to address computational errors in the original assessment order. This application was filed in response to a demand notice dated March 11, 2026, which had imposed a tax liability on the company.

Assessment Order Outcome

The Assessing Officer accepted the company's rectification application, acknowledging that errors in computation had occurred in the original assessment order. Importantly, the rectification process resulted in no change to the income assessed, indicating that the original tax demand was based purely on computational errors rather than substantive tax liability issues.

Regulatory Compliance

The company has disclosed this development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This disclosure follows an earlier intimation dated March 13, 2026, demonstrating the company's commitment to keeping stakeholders informed throughout the tax resolution process.

Company Secretary and Compliance Officer Pradip Bhatambrekar (Membership Number: A25111) signed the disclosure on April 28, 2026, ensuring proper regulatory compliance and stakeholder communication regarding this significant financial development.

Ventive Hospitality has received an upgraded rating from HSBC, moving from a previous rating to Buy with a target price of ₹685. The brokerage firm has made this recommendation despite cutting its estimates, indicating confidence in the company's underlying fundamentals and growth prospects.

Performance Analysis

The hospitality company demonstrated strong operational performance during January and February, which formed a key basis for HSBC's positive outlook. However, March witnessed some softness in business operations, primarily attributed to disruptions in the corporate and MICE (Meetings, Incentives, Conferences, and Exhibitions) segments.

Key Investment Highlights

HSBC's analysis reveals several factors supporting the Buy recommendation:

• Stable Pricing Power: Average Room Rates (ARRs) have remained stable, indicating the company's ability to maintain pricing discipline despite market challenges
• Attractive Valuation: The company trades at approximately 10x FY27 EV/EBITDA, which HSBC considers attractive for the hospitality sector
• Strong Quarterly Start: The robust performance in the first two months of the quarter demonstrates operational resilience

Risk Factors

The brokerage has identified potential challenges that could impact future performance:

• Diesel Shortage Risk: Operations in Male face potential disruptions due to diesel shortage concerns, which could affect operational efficiency
• Segment Disruptions: Corporate and MICE segments experienced disruptions in March, highlighting vulnerability to business travel fluctuations

Valuation Metrics

The upgrade to Buy rating reflects HSBC's confidence in Ventive Hospitality's long-term prospects despite near-term challenges. The combination of stable pricing power, attractive valuation multiples, and strong operational performance in the initial months provides a solid foundation for the positive recommendation.