Are Kamat Hotels (India) Ltd latest results good or bad?

Kamat Hotels (India) Ltd's latest financial results for the quarter ending December 2025 present a mixed picture. The company reported net sales of ₹117.74 crores, reflecting an 11.64% year-on-year growth, which indicates a positive trend in revenue generation. This growth was supported by strong occupancy rates and improved average room rates, particularly during the festive season. However, the operational performance reveals significant challenges, as the operating profit margin (excluding other income) contracted sharply to 33.14%, down from 41.85% in the same quarter last year. This represents a notable decline in profitability, raising concerns about cost management amidst rising operational expenses. The net profit for the quarter was ₹17.30 crores, which marked a substantial decline of 33.92% compared to the previous year. This decline in profit, despite revenue growth, suggests that the company is facing structural challenges in translating top-line growth into bottom-line results. The increase in employee costs and interest expenses further exacerbated the margin compression, highlighting the need for effective cost control measures. Additionally, Kamat Hotels' return on equity (ROE) stood at 15.66%, indicating reasonable capital efficiency relative to industry standards. However, the company's return on capital employed (ROCE) of 13.34% reflects weaker operational efficiency when considering its total capital base. The high debt-to-EBITDA ratio of 11.53 times raises concerns about financial flexibility and the company's ability to manage its debt burden effectively. Overall, while Kamat Hotels has demonstrated revenue growth, the significant erosion in operating margins and net profit indicates underlying operational challenges that require immediate management attention. The company has seen an adjustment in its evaluation, reflecting these mixed operational trends and financial pressures.