Kamat Hotels (India) Limited has announced its Q3FY26 financial results for the quarter ended December 31, 2025, showing strong revenue growth offset by declining profitability. The hospitality company's board meeting held on February 03, 2026, approved these unaudited standalone and consolidated financial results under Regulation 33 of SEBI Listing Regulations.

Q3FY26 Financial Performance Overview

The company demonstrated robust revenue momentum with quarterly revenue reaching ₹1,177.38 million compared to ₹793.71 million in the corresponding quarter of the previous year, marking a significant 48.36% growth. However, profitability metrics remained under pressure, with consolidated net profit declining to ₹172.98 million from ₹261.81 million year-on-year, representing a 33.91% decrease.

Nine Months Performance Analysis

For the nine months ended December 31, 2025, the company maintained positive revenue trajectory with consolidated revenue from operations reaching ₹2,755.12 million compared to ₹2,645.91 million in the corresponding period of the previous year. Consolidated net profit for the nine-month period stood at ₹210.96 million compared to ₹355.97 million in the previous year.

Exceptional Items and Regulatory Impact

The company's performance was significantly affected by exceptional items totaling ₹367.93 million in Q3FY26, primarily due to the implementation of new Labour Codes notified by the Government of India on November 21, 2025. The incremental impact consists of gratuity liability of ₹367.93 million arising from changes in wage definition under the consolidated Labour Codes.

Corporate Structure and Subsidiaries

A significant development during the period was the reclassification of ILEX Developers & Resorts Limited from an associate to a subsidiary effective April 1, 2025. This change occurred pursuant to a Shareholders' Arrangement Agreement dated June 19, 2025, which provided Kamat Hotels with operational and management control of ILEX.

Board Meeting and Regulatory Compliance

The board meeting commenced at 12:10 PM and concluded at 14:30 PM on February 03, 2026, with directors considering and approving the unaudited standalone and consolidated financial results. The company maintains its registered office at 70-C, Nehru Road, Vile Parle (East), Mumbai, and operates multiple hospitality brands including The Orchid Hotels & Resorts, Fort Jadhav Gadh, Mahodadhi Palace, Lotus Resorts By Orchid Hotels, and Ira By Orchid Hotels.

Kamat Hotels India Limited (KHIL) reported a challenging second quarter for the fiscal year 2026, with consolidated revenue declining 12% year-on-year to INR 75.00 crores. Despite the setback, the company remains optimistic about achieving its annual revenue target of INR 400.00 crores.

Financial Performance

The company's Q2 FY26 results showed significant pressure on profitability:

For the first half of FY26, KHIL's performance remained relatively flat:

Factors Affecting Performance

Several factors contributed to the company's subdued performance in Q2 FY26:

1. Natural Calamities: Road washouts affected properties in Shimla and Manali, significantly impacting revenue.
2. Expansion Costs: Pre-opening expenses for five new hotels, adding 280 rooms, weighed on profitability.
3. Renovation Impact: Ongoing work at Orchid Pune affected MICE (Meetings, Incentives, Conferences, and Exhibitions) business.
4. Seasonal Weakness: Extended monsoon led to revenue drops in Mumbai and Maharashtra properties.

Operational Updates

Despite challenges, KHIL continued its expansion:

• Now operates 24 properties with 2,100 rooms
• Opened new hotels in Panchgani, Dwarka, Rishikesh, Porvorim (Goa), and Hyderabad
• Bhavnagar property opening rescheduled to April due to owner-related delays

Management Commentary

Vishal Kamat, Executive Director of KHIL, expressed confidence in achieving the INR 400.00 crore annual revenue guidance, citing:

• Strong Q3 wedding season bookings
• Improved performance from previously opened hotels
• Positive outlook for new properties, especially Hyderabad, expected to break even in its second month of operation

Future Outlook

The management remains optimistic about H2 FY26 performance, expecting:

• Rebound in occupancy rates, particularly in established properties
• Increased wedding-related business in Q3
• Improved contribution from new and stabilizing properties

Corporate Actions

KHIL has withdrawn a pending merger proposal due to regulatory delays, aiming to remove uncertainty for investors. The company's current shareholding structure remains unchanged.

While the Q2 results present a challenging picture, KHIL's management expresses confidence in a strong second half, banking on seasonal trends and the performance of its expanded portfolio to meet annual targets.

Investors are advised to monitor the company's performance in the coming quarters to assess the realization of management's projections and the impact of recent expansions on overall financial health.