Asian Hotels (West) Shuts Trading Window for Q3 FY26 Results

Introduction to Trading Window Closure

Asian Hotels (West) Limited has formally announced the closure of its trading window for all designated persons and their immediate relatives, effective from January 1, 2026. This measure is in strict compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, and the company's internal code of conduct. The trading window is scheduled to reopen 48 hours after the public declaration of the company's unaudited financial results for the third quarter ending December 31, 2025. The company has stated that the date for the Board Meeting to approve these results will be announced in due course.

Q2 FY26 Financial Performance

The company's recent financial performance highlights significant challenges. For the second quarter of fiscal year 2026, which ended on September 30, 2025, Asian Hotels (West) reported revenue of ₹7,689.71 lakhs. This marked a 9.4% increase from the preceding quarter (Q1 FY26: ₹7,029.01 lakhs) but represented a slight year-on-year decline of 1.5% from Q2 FY25's revenue of ₹7,808.18 lakhs. Despite the sequential revenue growth, the company's profitability remains under severe pressure.

Profitability and Exceptional Items

The operating loss before exceptional items for Q2 FY26 was ₹1,831.70 lakhs, showing an improvement from the ₹2,339.53 lakhs loss reported in the same quarter of the previous year. However, the net loss widened significantly to ₹6,352.71 lakhs, compared to a net loss of ₹5,196.28 lakhs in Q2 FY25. This increased loss was primarily driven by an exceptional item: a penal interest expense of ₹5,674.02 lakhs related to defaults on borrowings. Consequently, the basic and diluted Earnings Per Share (EPS) stood at a negative ₹32.66, a deterioration from the negative ₹26.71 reported in the corresponding quarter of the previous year.

Half-Yearly Performance (H1 FY26)

For the first half of the fiscal year 2026, the company's revenue reached ₹14,718.72 lakhs, a 5.0% year-on-year increase. Despite this top-line growth, the net loss for the six-month period was substantial at ₹7,708.18 lakhs, resulting in a net loss margin of -52.4%. This performance underscores the deep-seated financial issues impacting the company's bottom line, even as it achieves modest revenue growth.

Balance Sheet Under Stress

An examination of the company's balance sheet as of September 30, 2025, reveals a precarious financial position. Total assets declined to ₹147,696.94 lakhs from ₹154,449.80 lakhs six months prior. A major concern is the sharp imbalance in liquidity; current liabilities soared to ₹128,803.10 lakhs, dwarfing current assets of just ₹5,509.19 lakhs. This indicates a severe working capital deficit. Furthermore, cash and cash equivalents fell sharply to ₹1,492.19 lakhs from ₹5,379.01 lakhs, while total equity eroded to ₹18,525.83 lakhs due to sustained losses.

Debt and Default Status

The company is grappling with significant debt obligations. As of September 30, 2025, Asian Hotels (West) had defaulted on borrowings amounting to a principal of ₹58,997.32 lakhs and interest of ₹17,327.42 lakhs, which includes the penal interest. This situation has led to the reclassification of all non-current borrowings to current borrowings, which stood at ₹62,709.00 lakhs.

Management's Strategy and Going Concern Basis

Despite the substantial losses and the critical mismatch between current assets and liabilities, the management has prepared the financial statements on a 'going concern' basis. This decision is supported by what the company describes as improved operating performance and ongoing cost reduction initiatives. The cornerstone of its recovery strategy is a preferential equity issue of ₹76,494 lakhs, which was approved after the quarter ended. The proceeds are intended to repay borrowings and cure the existing defaults, which is a critical step toward stabilizing the company's finances.

Cash Flow Analysis

The cash flow statement for H1 FY26 further illustrates the company's liquidity struggles. Cash flow from operating activities was negative at ₹12,507.44 lakhs, heavily impacted by working capital outflows. The company generated a positive cash flow from investing activities of ₹2,023.08 lakhs, primarily from the sale of assets. Financing activities brought in ₹6,597.54 lakhs, driven by an increase in borrowings. Overall, the company's cash balance declined by ₹3,886.82 lakhs during the first half of the fiscal year.

Corporate Governance and Auditor Remarks

While the specific Q2 FY26 report was not audited, related annual reports have highlighted significant corporate governance and accounting challenges within the group. Auditors for a related entity previously issued a "Disclaimer of Opinion," citing an inability to access complete primary books of accounts and supporting financial records. This limitation prevented them from verifying the accuracy and completeness of financial transactions. Management attributed these difficulties to the disruptions caused while the company was under the Corporate Insolvency Resolution Process (CIRP), which concluded in January 2024. Such disclosures raise important questions for investors regarding financial transparency and internal controls.

Outlook and Key Monitorables

Moving forward, the key determinant of Asian Hotels (West)'s survival and recovery will be the successful execution of its preferential equity issue. Investors and stakeholders will be closely monitoring the progress of this capital infusion and its application toward debt reduction. The sustainability of any operational improvements and the company's ability to manage its severe liquidity crisis will be critical. Additionally, updates on the status of subsidiary acquisitions and the company's ability to present consolidated financial results in the future will be important indicators of its path to recovery.