EIH says Wildflower Hall dispute closed after share transfer

EIH Limited says the Wildflower Hall dispute closed after transferring its Mashobra Resort Limited shares to the Government of Himachal Pradesh during the year ended 31 March 2026, while the High Court disposed of execution petitions on 5 January 2026. The earlier accounting outcome included a Rs 110.32 crore exceptional charge.

How did EIH close the Wildflower Hall dispute?

EIH closed the matter by transferring its shares in Mashobra Resort Limited, or MRL, to the Government of Himachal Pradesh after receiving compensation under the High Court's directions. The transfer took place during the year ended 31 March 2026, and the High Court of Himachal Pradesh said in its 5 January 2026 order that proceedings were closed and the execution petitions stood disposed of.

The dispute involved MRL, which acquired ownership of the Wildflower Hall property in 1997 under a 1995 joint-venture agreement between EIH and the Government of Himachal Pradesh. MRL was an EIH subsidiary until 31 March 2025. The filing does not state the amount of compensation received for the shares transferred to the state.

The operational handover occurred before the share transfer. The Supreme Court of India directed EIH on 20 February 2024 to vacate and hand over the hotel by 31 March 2025. EIH says it handed over vacant and peaceful possession on that date, resulting in loss of control over MRL and the removal of MRL's assets and liabilities from EIH's consolidated financial statements.

What was EIH's Rs 110.32 crore exceptional charge?

EIH's Rs 110.32 crore exceptional charge was the net effect of revising its MRL investment, writing down advances recoverable from MRL and reversing a user-fee obligation after the High Court's 2 June 2025 order. EIH recorded the charge in profit and loss for the half year ended 30 September 2025 and the year ended 31 March 2026.

After the 31 March 2025 loss of control, EIH initially measured its investment in MRL at an estimated fair value of Rs 141.21 crore and classified it as held for sale while share valuation was pending before the High Court. Following the 2 June 2025 order, EIH reduced that investment value to Rs 13.00 crore while retaining the held-for-sale classification.

EIH also revised advances recoverable from MRL. Those advances stood at Rs 136.19 crore at 31 March 2025 and were written down to Rs 68.09 crore, equal to 50% of the reported outstanding amount. The reduction in recoverable advances was Rs 68.10 crore, based on the figures disclosed by EIH.

The Rs 85.99 crore reversal covered user fees, including interest, that EIH said were no longer payable after the 2 June 2025 order. That reversal partly offset the reductions in the MRL investment and recoverable advances. EIH separately presented the resulting Rs 110.32 crore net impact under exceptional items for the half year ended 30 September 2025.

What did the October 2025 High Court order change for EIH?

EIH recorded a separate Rs 8.41 crore exceptional gain after the High Court's 14 October 2025 order removed a further user-fee and interest obligation and allowed interest income on money deposited with the Registrar. The gain contrasted with the Rs 110.32 crore net exceptional charge associated with the 2 June 2025 order.

The 14 October 2025 order meant a Rs 4.59 crore obligation for user fees and related interest was no longer payable. EIH also recorded Rs 3.82 crore of interest income on the amount deposited with the Registrar. The two amounts totalled Rs 8.41 crore.

The note says the Rs 8.41 crore was included in exceptional items for the quarter and half year ended 30 September 2026 and for the year ended 31 March 2026. However, EIH's exceptional-items table reports nil exceptional items for the six months ended 30 September 2026 and lists Rs 8.41 crore in comparative 2025 columns, creating a difference between the explanatory note and table presentation.

For the half year ended 30 September 2025, EIH reported a Rs 102.08 crore net exceptional loss, comprising the Rs 110.32 crore MRL-related charge, the Rs 8.41 crore adjustment and a Rs 0.17 crore Tirupati project impact at Svara Hotels Limited. For the year ended 31 March 2026, the net exceptional loss was Rs 132.08 crore because EIH also recorded a Rs 30.00 crore employee-benefit obligation related to the Labour Codes.

What do EIH's latest results show after the resolution?

EIH reported no exceptional item for the six months ended 30 September 2026, while consolidated profit rose to Rs 261.77 crore from Rs 153.44 crore in the six months ended 30 September 2025. The comparison includes the prior-period Rs 102.08 crore net exceptional loss, as well as changes in the hotel's operating result.

Revenue from operations increased to Rs 1,351.15 crore in the six months ended 30 September 2026 from Rs 1,171.52 crore a year earlier. Profit before exceptional items and tax increased to Rs 353.60 crore from Rs 322.69 crore. EIH says it has no reportable segments other than hotels under Indian Accounting Standards, or Ind AS.

For the quarter ended 30 September 2026, EIH reported profit of Rs 141.46 crore, compared with Rs 116.56 crore in the quarter ended 30 September 2025. Revenue from operations rose to Rs 694.19 crore from Rs 597.94 crore over the same comparison. EIH cautioned that first-half financial results are not indicative of full-year performance because of the seasonal nature of the Indian hotel industry.

EIH's consolidated balance sheet reported total assets of Rs 6,775.57 crore at 30 September 2026, compared with Rs 6,555.76 crore at 31 March 2026. Cash and cash equivalents increased to Rs 350.39 crore from Rs 172.72 crore over that period. MRL was no longer consolidated after EIH lost control on 31 March 2025.

Conclusion

EIH has disclosed a legal endpoint to the Wildflower Hall matter: possession was handed over on 31 March 2025, MRL shares were transferred to the Government of Himachal Pradesh during the year ended 31 March 2026, and the High Court disposed of execution petitions on 5 January 2026. The financial consequences included a Rs 110.32 crore exceptional charge, followed by a separately disclosed Rs 8.41 crore exceptional gain.

The next reported measure will be EIH's full-year hotel performance, since the company says the six months ended 30 September 2026 do not indicate the full year because of seasonality. EIH reported Rs 1,351.15 crore of six-month revenue and Rs 261.77 crore of profit, with no exceptional item reported for that period.