Sri Havisha Hospitality and Infrastructure Limited (formerly Shri Shakti LPG Limited) is a Hyderabad-based hospitality and infrastructure firm. Following its strategic merger with **Shri Shakti Resorts & Hotels Ltd** (effective **April 1, 2020**), the company has pivoted its core focus toward premium hospitality services and land monetization. The company is currently in a high-growth transition phase, characterized by a **30-year** lease security and a comprehensive asset modernization program. --- ### **Core Asset Portfolio and Revenue Streams** The company’s value proposition is anchored by a prime hospitality property and a significant land bank in a high-growth industrial corridor. * **Flagship Property:** A 5-star standard hotel situated on **4.38 acres** (17,759 Sqm) of land at **Begumpet Airport, Hyderabad**. This asset benefits from high visibility and proximity to key transit hubs. * **Accommodation Strategy:** Revenue is driven by active management of **RevPAR** (Revenue per Available Room). Post-pandemic performance has seen pricing and occupancy levels exceed historical benchmarks. * **Food & Beverage (F&B) Ecosystem:** * Signature global cuisine restaurants. * An app-based delivery model designed to optimize kitchen capacity during off-peak hours. * Extensive banqueting facilities catering to corporate MICE (Meetings, Incentives, Conferences, and Exhibitions) and social events. * **Ancillary Revenue:** Income is supplemented by retail/office space rentals, health club memberships, laundry services, and airport transfers. * **Strategic Land Bank:** The company holds **27.78 acres** of land in **Kakinada** (East Godavari District). In **November 2024**, the company initiated a monetization strategy by converting this land into stock-in-trade, successfully selling an initial **1.69 acres** for **INR 1.3 crore**. --- ### **Asset Modernization and Performance Metrics** SHHIL is currently executing a "massive renovation" to upgrade its Hyderabad property to modern **5-star standards**. This phased approach ensures the hotel remains operational while inventory is improved. | Renovation Phase | Status & Impact | | :--- | :--- | | **Phase 1 (Completed)** | **23 rooms** (including **3-4 suites**) on the 4th floor fully renovated. | | **Operational Performance** | Renovated rooms achieved **90% plus occupancy** at significantly higher tariffs. | | **Current Status** | Renovation of remaining floors and public areas is underway. | | **Short-term Impact** | Temporary dip in Room and F&B sales as inventory is taken offline for upgrades. | --- ### **Long-Term Lease Security and Financial Structure** A defining feature of SHHIL’s stability is its long-term land tenure with the **Airports Authority of India (AAI)**, which provides a **30-year** operational runway. | Metric / Item | Details | | :--- | :--- | | **Lease Term** | **30 Years** (Renewed effective **Jan 1, 2023**) | | **Lease Expiry** | **December 31, 2052** | | **Debt Turnaround** | Cleared **INR 106 crore** in bank loans via OTS; turned profitable post-merger. | | **Notional Finance Cost** | **INR 4.19 crore** (Interest expense on lease liability for FY25 under Ind AS 116). | | **Capital Allocation** | **No dividend** policy currently in place to prioritize renovation funding and loss absorption. | --- ### **Financial Performance Summary** The company’s financials reflect a transition from a post-merger recovery to a capital-intensive upgrade cycle. The introduction of **Ind AS 116** has introduced significant notional (non-cash) expenses related to lease liabilities. | Metric (INR Crore) | FY 2024-25 (Est.) | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Income** | **15.83** | **16.12** | **18.00** | | **Total Expenditure** | **20.51** | **20.10** | **15.95** | | **Net Profit / (Loss)** | **(4.68)** | **(4.15)** | **1.50** | | **Finance Cost** | **4.53** | **5.20** | **-** | *Note: The shift to a net loss in recent years is primarily attributed to the **26.03%** spike in expenditure following the accounting treatment of leasehold rights and notional interest.* --- ### **Sustainable Mobility and R&D Initiatives** Retaining its roots in alternative energy, the company maintains a specialized division focused on sustainable automotive solutions, specifically for the **Three-Wheeler** segment. * **Proprietary Technology:** Developed an indigenous **LPG Conversion Kit** featuring a **fixed tank** for three-wheelers. * **Intellectual Property:** Holds **Two Patents** jointly with the **Automotive Research Association of India (ARAI)**. * **Operational Efficiency:** Implemented energy-saving measures including **auto-switching** for HVAC and lighting, and **auto-controllers** for compressed air to reduce manufacturing overheads. --- ### **Strategic Growth Drivers and Corporate Actions** The management is pursuing a dual-track strategy of asset-intensive ownership and asset-light management to hedge against economic cycles. * **Sweat Equity Allotment:** In **September 2024**, shareholders approved **1,50,00,000 Sweat Equity Shares** (Face Value **Rs. 2**) for Chairman Mr. Venkat Manohar Dontamsetti, recognizing his role in the **30-year lease renewal** and the company’s financial turnaround. * **Market Alignment:** SHHIL is positioning itself to capture a share of the Indian tourism market, projected to reach **$125 billion by FY27**, leveraging government schemes like **Swadesh Darshan 2.0** and **PRASHAD**. * **Kakinada Monetization:** The Board has authorized the MD to pursue the full sale or development of the remaining **26+ acres** in Kakinada to unlock capital for hospitality expansion. --- ### **Risk Management and Governance** SHHIL operates under a formal risk framework, primarily utilizing a **cash-and-carry** model to mitigate credit risk. * **Legal Contingencies:** The company is contesting a **Cross Subsidy Surcharge (CSS)** dispute involving **₹99.91 lakhs** paid under protest to **TGSPDCL**. Management views the liability as remote. * **Regulatory Compliance:** Following historical penalties from **BSE/NSE** regarding Board composition in **FY23**, the company has regularized its governance structure and independent director appointments. * **Liquidity Monitoring:** While the company faces short-term liquidity pressures due to renovation outlays, it manages this through the hypothecation of **inventory and trade receivables** and active fund-raising with bankers. * **Macro Risks:** Exposure to inflation, volatile food/oil prices, and geopolitical unrest are managed through documented risk policies and topline diversification.