Royal Orchid Hotels Q2 FY26 Net Profit Jumps 224%

Key Quantitative Figures - Standalone (₹ in lakhs)

Income Statement for Q2 FY26 (Quarter ended September 30, 2026)

Revenue from operations: ₹5,728.43 (vs. ₹4,633.00 in Q2 FY25)
Other income: ₹146.93
Total Income: ₹5,875.36
Profit before exceptional items and tax: ₹496.93 (vs. ₹514.88 in Q2 FY25)
Exceptional items: ₹793.23 (Profit on disposal of subsidiary)
Profit before tax: ₹1,250.16
Tax expense: ₹43.69
Profit for the period: ₹1,246.47 (vs. ₹387.46 in Q2 FY25)
Earnings Per Share (Basic): ₹4.54

Income Statement for H1 FY26 (Half Year ended September 30, 2026)

Revenue from operations: ₹10,950.54 (vs. ₹9,809.56 in H1 FY25)
Other income: ₹276.22
Total Income: ₹11,226.76
Profit before exceptional items and tax: ₹871.51 (vs. ₹994.39 in H1 FY25)
Exceptional items: ₹793.23 (Profit on disposal of subsidiary)
Profit before tax: ₹1,664.74
Tax expense: ₹135.78
Profit for the period: ₹1,528.96 (vs. ₹748.99 in H1 FY25)
Earnings Per Share (Basic): ₹5.58

Balance Sheet as at September 30, 2026 (Standalone)

Total Assets: ₹47,788.50 (vs. ₹49,640.18 as at March 31, 2026)
Equity Share Capital: ₹274.25
Other Equity: ₹25,855.72 (vs. ₹25,012.37 as at March 31, 2026)
Total Equity: ₹28,598.24
Borrowings (Non-current + Current): ₹321.97 (₹270.25 + ₹51.72)
Lease Liabilities (Non-current + Current): ₹10,453.60 (₹9,035.92 + ₹1,417.68)
Cash and Cash Equivalents: ₹1,201.37

Cash Flow for H1 FY26 (Standalone)

Net cash from operating activities: ₹1,127.78
Net cash from investing activities: ₹929.50
Net cash used in financing activities: ₹(1,221.49)
Net change in cash: ₹836.79

Key Quantitative Figures - Consolidated (₹ in lakhs)

Income Statement for Q2 FY26 (Quarter ended September 30, 2026)

Revenue from operations: ₹11,012.27 (vs. ₹7,018.78 in Q2 FY25)
Other income: ₹588.25
Total Income: ₹11,600.52
Profit before exceptional items and tax: ₹1,165.03
Exceptional items: ₹979.29 (Profit on disposal of subsidiary)
Profit before tax: ₹2,144.32
Tax expense: ₹142.04
Profit for the period after tax (before share of associate): ₹1,394.68
Share of profit of associate: ₹78.54
Profit for the period: ₹1,473.42 (vs. ₹429.21 in Q2 FY25)
Earnings Per Share (Basic): ₹5.25

Income Statement for H1 FY26 (Half Year ended September 30, 2026)

Revenue from operations: ₹21,733.65 (vs. ₹15,705.26 in H1 FY25)
Other income: ₹1,337.36
Total Income: ₹23,071.01
Profit before exceptional items and tax: ₹1,374.90 (vs. ₹1,903.40 in H1 FY25)
Exceptional items: ₹979.29 (Profit on disposal of subsidiary)
Profit before tax: ₹2,354.19
Tax expense: ₹376.41
Profit for the period after tax (before share of associate): ₹1,977.78
Share of profit of associate: ₹174.78
Profit for the period: ₹2,152.56 (vs. ₹1,548.64 in H1 FY25)
Earnings Per Share (Basic): ₹7.59

Balance Sheet as at September 30, 2026 (Consolidated)

Total Assets: ₹106,675.09 (vs. ₹104,164.92 as at March 31, 2026)
Equity Share Capital: ₹274.25
Other Equity: ₹24,458.70
Non-controlling interests: ₹1,610.25
Total Equity: ₹28,798.44
Borrowings (Non-current + Current): ₹9,056.87 (₹7,491.09 + ₹1,565.78)
Lease Liabilities (Non-current + Current): ₹57,722.20 (₹56,196.29 + ₹1,525.91)
Cash and Cash Equivalents: ₹2,227.07

Cash Flow for H1 FY26 (Consolidated)

Net cash from operating activities: ₹4,666.30
Net cash from investing activities: ₹83.02
Net cash used in financing activities: ₹(3,932.02)
Net change in cash: ₹817.30

Exceptional Items

A significant exceptional gain of ₹793.23 lakhs (standalone) and ₹979.29 lakhs (consolidated) was recorded for the quarter and half year. This pertains to the profit on the disposal of the subsidiary, Multi Hotels Limited (MHL), Tanzania. The sale was completed on July 6, 2026, for a total consideration of USD 3.41 million. The gain includes a reversal of an impairment provision of ₹736.83 lakhs (standalone) and ₹2,217.26 lakhs (consolidated) recognized in earlier years.

Legal and Regulatory Proceedings

SEBI Matter

SEBI issued an Interim Order cum Show Cause Notice on March 31, 2023, alleging incorrect accounting of 'loss of control' over Ksheer Sagar Developers Private Limited (KSDPL) in FY22.
SEBI issued a Final Order on October 11, 2024, directing the company to:
File a public disclosure of the order.
Disclose financial statements and audit reports for FY22-FY24.
File a report detailing the impact if KSDPL were considered a subsidiary.
Pay monetary penalties of ₹5 lakhs and ₹1 lakh each under Sections 15HA and 15HB of the SEBI Act.
The company appealed to the Securities Appellate Tribunal (SAT). SAT stayed the directions (b) and (c) of the Final Order on November 5, 2024, and stayed the monetary penalties conditional on depositing 50% of the amount, which has been done.
The matter was last heard on October 15, 2026, and the SAT has reserved its order.
Management maintains its view that the classification of KSDPL as an associate is appropriate under Ind AS 110. No adjustments have been made in the financial results based on this ongoing matter.

NCLT Matter

Shareholders (Tambi Group) holding 50% of Ksheer Sagar Developers Private Limited (KSDPL) filed a petition with the NCLT on February 22, 2024, under Sections 241 and 242 of the Companies Act, 2013, alleging oppression and mismanagement.
The petition includes allegations related to related party transactions, appointment of independent directors, and the change in KSDPL's status from subsidiary to associate.
The next hearing date is November 26, 2026.
The company's response to NCLT considered KSDPL a 'private company' rather than a 'deemed public company' for compliance assessment. The auditors have issued a qualified opinion due to the uncertainty arising from this litigation and the inconsistent legal assessment.

Other Key Disclosures

Segment Information: The company operates in a single segment: hospitality business.
Dividend: The Board proposed a final dividend of 25% (₹2.5 per equity share) on May 25, 2026. It was approved by shareholders at the AGM on September 26, 2026, resulting in a cash outflow of ₹685.63 lakhs.
Labour Codes: The impact of implementing the new Labour Codes, effective November 21, 2025, resulted in an additional gratuity liability of ₹56.04 lakhs (standalone) and ₹129.10 lakhs (consolidated) recognized in employee benefits expense for FY26.
Auditor's Report: The statutory auditors, Walker Chandiok & Co LLP, issued a qualified review report on both standalone and consolidated results due to the ongoing NCLT litigation and SEBI proceedings concerning KSDPL.

Financial Impact

The financial impact of the SEBI matter is limited to the provided penalties (50% deposited) and potential future adjustments if the SAT ruling is unfavorable. The amount provided is considered sufficient by management.
The financial impact of the NCLT matter is currently unascertainable.
The sale of MHL resulted in a significant one-time exceptional gain and a net cash inflow.
The dividend declaration results in a confirmed cash outflow of ₹685.63 lakhs.