HBG Hotels FY26: A ₹2.76 Cr Profit Wearing the Costume of a ₹56 Cr One

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1 — At a Glance

For two years running, this company’s profit line looked spectacular — ₹196 crore in FY24, ₹56 crore in FY25 — on a business that sells about ₹30 crore of hotel rooms a year. The trick was a column called Other Income, which contributed ₹196.75 crore and ₹57.27 crore respectively. In FY26 that column reads zero.

Strip it away and what remains is the actual hotel company: FY26 revenue of ₹31.74 crore, operating profit of ₹7.13 crore, and net profit of ₹2.76 crore. Profit “grew 136%” on a trailing basis and “60% over three years” — both figures sit on top of the vanished exceptional gains, which makes them arithmetic rather than trajectory.

Meanwhile the balance sheet carries ₹354 crore of borrowings and ₹358.56 crore of capital work-in-progress against ₹31.74 crore of sales. Return on equity is 0.77%; ROCE is 0.73%. The market pays 66.9x earnings for it.

Does a ₹185 crore hotel company get to build a ₹358 crore project pipeline on 0.7% returns, or does the pipeline eventually have to explain itself? Keep reading — the second half is where the construction happens.

2 — Introduction

The entity now called HBG Hotels Ltd spent most of its life as Phoenix Township Limited, incorporated in 1993 and part of the Hede Business Group, a Goa house with interests across mining, hotels, travel and property. The name change takes effect from FY26.

It is a small hospitality operator. Its three resorts — Park Inn by Radisson in Candolim (Goa), Phoenix Castle House in Palolem (Goa), and Phoenix Island Resort near Poovar Beach (Kerala) — form the whole of the operating business. Revenue from operations for FY26 was ₹28.08 crore, with another ₹3.66 crore of other operating income, per the filed results.

The recent record is busy in a way the ₹31.74 crore top line doesn’t suggest. Over FY24–FY26 the company issued convertible warrants and fresh equity to promoters, acquired a real-estate subsidiary, signed branding tie-ups with two global hotel groups, and moved to list on the NSE. The financial statements and the balance sheet, however, are dominated by two things the room revenue can’t account for: enormous one-off other income in FY24 and FY25, and a construction pipeline larger than the company’s own market capitalisation.

3 — Business Model: WTF Do They Even Do?

Three resorts. That is the model.

Park Inn by Radisson carries 128 rooms and the usual boutique-resort inventory — restaurant, banquet space, spa, fitness centre. Phoenix Castle House offers pool, bar, restaurant and graded rooms. Phoenix Island Resort is a cluster of cottages near a Kerala beach. Operations break into infrastructure, holiday activities, and food & beverage.

For a business this compact, ₹31.74 crore of annual revenue is roughly what you’d expect. What you would not expect is the rest of the entity attached to it: a subsidiary in real estate (Green First Estate Pvt. Ltd.), a stake being taken in Palolem Resorts LLP, warrant issuances, and capital work-in-progress running to ₹358.56 crore — money sunk into assets not yet earning.

The result is a company where the hotel business is almost the smallest thing about it. The rooms generate the revenue; the corporate actions generate the balance sheet. Reading the P&L and then reading the balance sheet feels like meeting two different companies who happen to share a letterhead — one runs three resorts, the other is a holding-and-development vehicle in a builder’s helmet.

A three-resort operator running a ₹358 crore project book: is the hotel funding the ambition, or is the ambition just parked next to the hotel?

4 — Financials Overview

Figures are consolidated, in ₹ crore.

The revenue and operating-profit lines behave like a small hotel that had a decent March quarter. The PAT comparison does not: the ₹51.31 crore of March 2025 carried a ₹50.65