Taj GVK Hotels & Resorts Limited, a prominent player in the hospitality sector, has received a significant demand notice from the Telangana State Southern Power Distribution Company Limited (TGSPDCL) for wheeling charges. The notice, which pertains to the company's Taj Deccan hotel in Hyderabad, covers a period of nearly a decade and amounts to a substantial sum.

Demand Details

The demand notice from TGSPDCL includes the following key points:

The charges cover the financial years 2004-05 to 2013-14, a period during which Taj GVK Hotels procured electricity from third-party producers, specifically Ind Barath Energies Limited.

Company's Response

Taj GVK Hotels has taken a firm stance on this issue:

1. The company maintains that these wheeling charges should be paid by the third-party electricity producer rather than the recipient.
2. Taj GVK Hotels plans to file an appeal with the Telangana High Court seeking a stay on the recovery of this demand.
3. The company expresses confidence in obtaining a favorable order from the court.

Background and Legal Context

This demand comes in the wake of a recent order by the Telangana High Court. In 2020, Taj GVK Hotels had initially filed a writ petition in the High Court regarding this matter. However, the court recently ruled in favor of TGSPDCL, allowing the collection of wheeling charges from the recipient.

Financial Implications

While the demand is significant, Taj GVK Hotels has stated that there will be no impact on its operations or other activities. The company is actively pursuing legal recourse to address this financial challenge.

Regulatory Compliance

In compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Taj GVK Hotels has duly informed the Bombay Stock Exchange and the National Stock Exchange of India about this development.

As this situation unfolds, stakeholders and investors will be keenly watching how Taj GVK Hotels navigates this financial and legal challenge, and its potential impact on the company's financial health in the coming quarters.

Taj GVK Hotels & Resorts , a prominent player in the Indian hospitality sector, has reported strong financial results for the second quarter, showcasing growth across key metrics.

Financial Highlights

The company's financial performance demonstrates resilience and growth in a competitive market environment. Here's a breakdown of the key financial metrics:

Net Profit

Taj GVK Hotels & Resorts reported a consolidated net profit of ₹276.00 million, marking a significant increase from ₹243.20 million in the same quarter of the previous year. This represents a year-over-year growth of approximately 13.5%.

Revenue

The company's revenue saw a modest increase, rising to ₹1.07 billion from ₹1.05 billion in the corresponding period last year. This 1.9% growth in revenue indicates a steady demand for the company's services.

EBITDA and Margin Improvement

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) showed substantial growth, increasing to ₹336.00 million from ₹295.00 million in the previous year's quarter. This represents a robust 13.9% year-over-year increase.

More notably, the EBITDA margin improved significantly, rising to 31.39% from 28.00% in the same quarter last year. This 3.39 percentage point increase in EBITDA margin suggests enhanced operational efficiency and cost management.

The strong performance across these key financial metrics indicates that Taj GVK Hotels & Resorts is effectively managing its operations while driving profitability. The company's ability to improve its EBITDA margin while growing revenue demonstrates a focus on operational excellence and cost optimization.

As the hospitality sector continues to evolve, Taj GVK Hotels & Resorts' financial results reflect its ability to navigate market challenges and capitalize on opportunities for growth.