Royal Orchid Hotels Ltd Q2FY26 | 70% Occupancy, ₹79 Cr Quarterly Sales & A Borrowing Pile That Could Fill a Swimming Pool

1. At a Glance

When most people say“living the suite life,”they mean sipping cocktails near infinity pools — not analyzing debt ratios and operating margins. But here we are, dissectingRoyal Orchid Hotels Ltd (ROHL)— India’s mid-tier hospitality player that thinks asset-light means “less furniture, more franchisees.” Incorporated in1986, this ₹1,152 crore market cap hotelier now operates112+ hotels across 75+ locationswith a grand total of6,603 keys. From the glittering Regenta Resorts to budget Regenta Inns, the brand’s spread is as wide as a Gujarati buffet.

At ₹420 per share (as of Nov 19, 2025), the company trades at aP/E of 25x, which is less than half of industry heavyweights like Indian Hotels (Taj) or Lemon Tree.ROE stands tall at 22.4%andROCE at 17.4%, respectable for a company juggling over ₹677 crore in debt and still finding time to open new resorts near statues, beaches, and airports.

Revenue for Q2FY26 stood at₹79.19 crore(up 12.5% YoY), but PAT slipped43%YoY to₹4.3 crore— a reminder that hotel margins can vanish faster than hot buffet idlis at a wedding brunch. Occupancy across owned and leased properties averaged70%, withARR at ₹5,532. Managed hotels clocked62% occupancywith ARR of ₹3,941.

As Lord Krishna said in theBhagavad Gita,“Action is thy duty, not the fruit thereof.”Maybe Royal Orchid took it literally — expanding furiously while profits take a nap.

2. Introduction

If hospitality were a Bollywood movie,Royal Orchidwould be the dependable character actor — not the lead hero, but always in the frame, smiling, serving chai, and somehow surviving every market cycle.

After all, this isn’t your average leisure stock. It’s a full-service hotel network —owned, leased, managed, and franchised— running everything from 5-star suites in Mumbai to resorts in Dapoli to inns in Pilgrimage zones. While Taj and ITC woo foreign diplomats, Royal Orchid courts the business traveler from Ludhiana and the family from Indore looking for an affordable “staycation.”

The company has mastered India’s favorite corporate yoga pose —“Asset-Light Asana”. It’s currently adding28+ new hotelswith2,400+ keyswithout spending much of its own money. How? By convincing property owners to fund the capex while Royal Orchid pockets management fees — the dream model for every hotel chain that hates construction dust.

But it’s not all room service and rain showers. ROHL’s balance sheet shows a debt pile growing faster than its minibar bills. Borrowings shot up to₹677 croreas of Sept 2025, nearly triple FY24 levels, raising eyebrows about how “light” this model really is. Still, the company’s optimism is infectious — launching new properties inMumbai T2, Surat, Pushkar, Varanasi, and evenNepal, where guests may find both enlightenment and breakfast buffets.

3. Business Model – WTF Do They Even Do?

At its core, Royal Orchid makes money from four things:

1. Room Revenue (52.8%)
2. Food & Beverage (37.1%)
3. Management Fees (9.5%)
4. Other Services (3.1%)

Its operations are split between:

• Owned Hotels (398 keys)– where it bears the costs and enjoys the profits.
• Leased Hotels (688 keys)– where it rents, manages, and prays the rent-to-revenue ratio doesn’t ruin the margins.
• Joint Ventures (193 keys)– like business marriages that survive only if EBITDA stays faithful.
• Managed/Franchised (5,324 keys)– the “royalty cash cow” with low investment and recurring income.

The portfolio coversRoyal Orchid (5-star),Regenta Central (4-star),Regenta Suites & Place (business/budget), andRegenta Resort(leisure/spiritual). Essentially, one brand for every type of traveller — the executive, the pilgrim, and the “let’s go Goa once more” tourist.

The kicker?Business travel contributes 54.7% of room revenue, whileleisure and pilgrimagemake up another 38%. The company even tracks “Bleisure” — the hybrid of business and leisure — at7.2%, proving Indians can mix Excel sheets and beach cocktails with equal grace.

It’s a model that works — until it rains too much, elections are announced, or influencers post #StaycationFails.

4. Financials Overview