General information and entertainment, not investment advice. The author is not a SEBI-registered adviser or research analyst. No recommendation, no promised returns. Markets carry risk including loss of capital. Figures may not be current. Consult a registered adviser before acting.
Sayaji Hotels reported ₹149 Cr revenue for FY2026, up 8% year-on-year, but net profit turned negative at ₹–6.3 Cr against ₹2.1 Cr the year prior. The collapse wasn’t a revenue problem—it was everything else. Operating profit halved, expenses spiked by 28%, and the balance sheet harbours a ₹150+ Cr borrowing load. The company holds ₹4.7 Cr in cash against ₹126 Cr in debt.
Occupancy rates in hotels remain healthy at 74–84% (per ICRA rating report from March 2026), and average room rates climbed to ₹5,057 in the last nine months. Depreciation jumped 68% to ₹25.9 Cr, a sign of capex activity, or revaluation effects—or both. Management contracts (asset-light strategy) number 21 in the pipeline for FY2029, but the core leased properties contribute most revenue while newest additions carry minimal financial impact.
The story is a tension between occupancy gains and deteriorating unit economics.
2. Introduction
Sayaji Hotels, incorporated in 1982, operates 4-star and 5-star properties across tier-II and tier-III cities. The company shifted strategy around FY2022, moving away from asset-heavy lease models toward management contracts and franchisee arrangements. At present it owns or leases five properties (Vadodara, Indore, Pune, Bhopal, Raipur), operates 26 under management contracts, and has franchisee agreements for eight properties.
In October 2025, the Vadodara lease expired and converted to a management contract. In March 2026, the Raipur lease ended—that property contributed 26% of revenue and 20% of EBITDA in the prior year. This created a material headwind for FY2026 earnings.
The company announced plans to add three leased properties in Gangtok, Tirupati and Raipur by Q4 FY2027, with 21 management contracts queued for FY2029. In May 2026, it approved ₹26 Cr capex for a 26% stake in Avanir Wellness Resorts, a wellness centre in Raipur. The prior month, it terminated a management contract for a Rajasthan property. CFO Sandesh Khandelwal resigned in January 2026; Puneet Karade assumed the role in April.
Promoter shareholding stands at 66.8%, down from 74.95% a year earlier. In November 2025, promoter Raoof Dhanani pledged 1.27 Cr shares (7.27% of the company) to Swan Finance—a signal of short-term liquidity pressure on the promoter side.
3. Business Model: WTF Do They Even Do?
Sayaji operates under five brands: Sayaji (core), The Forest Chapter by Sayaji (resorts), Sayaji Resorts and Spa (wellness), Effotel (value 4-star), and Enrise (budget tier). The mix is split across rooms (~39% of revenue in FY2023 data), food and beverages (~50%), and ancillary (clubs, rentals, banquets, management fees: ~11%).
The portfolio spans 39 properties in 30 cities with 2,564 rooms. Of these, five are leased (the cash generators), 26 are managed under contract (fixed fee + incentive), and eight are franchisee (licensing model). Management contracts carry minimal capex risk but low absolute earnings—the company books a fee and share of profit, not revenue. Franchisee brings brand royalty only.
The leased properties are the earnings engine. Raipur’s exit in March 2026 removed a ₹40 Cr revenue contributor. Vadodara’s shift from lease to management contract (October 2025) also trimmed direct earnings. So FY2026’s “growth” masks a deterioration in high-margin, owned/leased property revenue.
The 21 pipelines for FY2029 are mostly small (80–85 rooms on average per ICRA). These will boost brand visibility and room count but dilute per-property profitability. The company is chasing scale over returns.
4. Financials Overview
Figures are consolidated, in ₹ crore.
Metric
FY2024
FY2025
FY2026
YoY Change
Revenue
111.8
138.3
148.8
+7.6%
Operating Profit
33.3
27.0
20.8
–23%
EBITDA
44.4
42.4
46.7
+10%
Depreciation
11.4
15.4
25.9
+68%
Interest
7.4
10.5
13.6
+30%
Net Profit
14.3
2.1
–6.3
Loss
EPS (Annualised)
8.2
1.2
–3.6
–412%
Operating margin compressed to 14% (from 20% in FY2025 and 30% in FY2024). The gap between EBITDA growth (+10%) and operating profit decline (–23%) speaks to the depreciation jump—₹25.9 Cr is extraordinarily high for a company with ₹134 Cr net fixed assets. Either Raipur’s lease exit triggered an asset write-off, or capex-linked depreciation is front-loaded. The interest bill rose 30%, tracking debt expansion. Net profit fell into negative territory as depreciation and interest ate through EBITDA.
Quarterly Momentum (Latest Quarter, Q4 FY2026): Q4 revenue was ₹37.7 Cr (in line with the prior three Q3 at ₹31.7 Cr). Operating profit was ₹7.3 Cr, OPM 19.3% (better
