Asian Hotels (East) Limited announced its unaudited financial results for the quarter ended December 31, 2025, demonstrating strong standalone performance while facing challenges in its consolidated operations. The company, which operates the Hyatt Regency Kolkata hotel, reported mixed results with significant auditor concerns regarding subsidiary investments.

Strong Standalone Financial Performance

The company delivered robust standalone results for Q3FY26, with key metrics showing substantial improvement over the previous year:

For the nine months ended December 31, 2025, the company maintained strong performance with net profit of Rs 2,004.12 lakhs compared to Rs 1,455.76 lakhs in the corresponding period of the previous year, representing a growth of 37.7%.

Auditor Concerns Over GJS Hotels Subsidiary

The company's statutory auditors, Singhi & Co., issued qualified opinions on both standalone and consolidated financial results, highlighting significant concerns regarding the recoverability of investments in wholly-owned subsidiary GJS Hotels Limited.

On November 02, 2024, the Government of Odisha issued an order directing GJS Hotels to vacate leased premises in Odisha, citing non-compliance with lease deed terms. The order resulted in the forfeiture of a performance bank guarantee of Rs 350 lakhs furnished by Asian Hotels (East).

GJS Hotels has filed a writ petition before the Hon'ble High Court of Orissa challenging the government order, with the next hearing date yet to be scheduled.

Consolidated Results Show Significant Losses

The consolidated financial results presented a contrasting picture, with the company reporting a net loss of Rs 5,263.26 lakhs for Q3FY26 compared to a net profit of Rs 483.03 lakhs in Q3FY25. This dramatic shift was primarily attributed to exceptional items totaling Rs 6,213.06 lakhs, including goodwill impairment charges.

Ongoing Acquisition and Legal Matters

The company's wholly-owned subsidiary, Novak Hotels Private Limited, continues its acquisition process of Hyatt Regency Mumbai from Asian Hotels (West) Limited. During Q3FY26, Novak reclassified advances of Rs 40,259.04 lakhs as Capital Work in Progress, indicating its decision to exercise the acquisition option.

The company also faces ongoing income tax disputes, with matters pending before various appellate authorities. These include an assessment order for financial year 2022-23 determining tax liability of Rs 1,420.18 lakhs, which the company has appealed.

Financial Position and Outlook

Despite the challenges in consolidated operations, the standalone business continues to demonstrate resilience. The company maintains a paid-up equity share capital of Rs 1,729.17 lakhs with 172.917 million ordinary shares of Rs 10 each.

The auditors' qualified opinions highlight the need for careful monitoring of subsidiary investments and their recoverability. Management believes the legal matters will be resolved favorably, though the financial impact remains uncertain pending final adjudication of various court proceedings.

Asian Hotels (West) Limited announced its unaudited financial results for the quarter ended December 31, 2025, revealing continued operational challenges and significant auditor concerns. The Board of Directors approved the results at their meeting held on February 13, 2026.

Standalone Financial Performance

The company's standalone operations showed a net loss of ₹88.48 lakhs for Q3 FY26, representing a substantial improvement from the ₹2,166.71 lakhs loss recorded in Q3 FY25. For the nine months ended December 31, 2025, the standalone loss stood at ₹231.93 lakhs compared to ₹2,214.61 lakhs in the corresponding period of the previous year.

The company continues to operate without revenue from operations, relying solely on other income of ₹143.72 lakhs in Q3 FY26. Total expenses decreased to ₹248.52 lakhs from ₹390.34 lakhs in the previous year quarter, primarily due to lower finance costs and other expenses.

Consolidated Performance Shows Contrasting Results

On a consolidated basis, the company reported significantly different results, posting a net profit of ₹2,165.37 lakhs for Q3 FY26 compared to ₹510.12 lakhs in Q3 FY25. The consolidated revenue from operations reached ₹11,082.28 lakhs in Q3 FY26.

Auditor Raises Serious Concerns

J.C. Bhalla & Co., the company's statutory auditors, expressed an adverse opinion on both standalone and consolidated financial results. The auditors highlighted several critical issues related to a ₹39,000 lakhs borrowing from Novak Hotels Private Limited, identified as the Saraf Group.

Key auditor concerns include:

• Disputed Interest and Expenses: The company has not recognized interest expense of ₹7,088.63 lakhs and reimbursement expenses of ₹1,429.29 lakhs as claimed by the lender
• Unreconciled Balance: An unreconciled balance of ₹242.64 lakhs exists in the borrowing amounts
• Framework Agreement Issues: Questions over the classification of amounts received as borrowings versus advances for asset sale
• Going Concern Uncertainty: Current liabilities exceed current assets by ₹41,917.84 lakhs as of December 31, 2025

Saraf Group Borrowing Details

The company disclosed that Novak Hotels Private Limited had advanced ₹37,100 lakhs until March 31, 2024, with an additional ₹1,900 lakhs during the year, totaling ₹39,000 lakhs. This amount was utilized for payments to creditors and regulatory expenses as part of the insolvency resolution process.

The auditors noted that the Framework Agreement provides Saraf Group with an option to acquire Hyatt Regency, Mumbai, the company's principal asset, raising questions about the true nature of these financial arrangements.

Regulatory and Compliance Issues

The auditors emphasized that the company has not filed necessary forms with the Ministry of Corporate Affairs regarding the charge creation on Hyatt Regency, Mumbai, indicating non-compliance with statutory requirements. Additionally, concerns were raised about the adequacy of shareholder approvals for the potential asset disposal arrangements.