Established operations with experience management
Incorporated in the year 2012, the firm is engaged in running operations of five-star hotel under the brand name “Le-Meridien” located in Surat, Gujarat. The firm has established operations of more than a decade and is led by Directors, Mr. Gurjeet Singh Chhabra and Mr. Rajesh Mehta who possess experience of over three decades in the real estate development and management of shopping malls. Acuité believes that the promoters’ extensive understanding and expertise will support the company’s operations going forward.

Strong support from the group company
Century 21 Town Planners Private Limited (CTPPL) is a part of C21 Group which is promoted by Mr. Gurjeet Chhabra and the group has a well-established presence in the real estate market. CTPPL currently operates a renowned mall in Indore known as ‘C21 Mall’ and also owns C21 Business Park. Furthermore, the group entity holds ~49.92 percent and Mr. Gurjeet Chhabra (common director) holds 0.08 percent stake in OMLLP as on March 2025. CTPPL has extended financial support by way of capital infusion and will continue to do so as in when required. Also, CTPPL has extended corporate guarantee on the loans availed by OMLLP. Acuité believes that OMLLP will continue to benefit from the support from the group company over the medium term.

Stable operating revenue and profitability
OMLLP’s operating income remained stagnant at around Rs. 70.00 Cr in FY2025, compared to Rs. 70.47 Cr in FY2024, primarily due to prolonged renovation and partial room closures during the year. While the food and beverage segment continued to contribute, the expected growth was muted as the newly renovated rooms were not fully operational until late FY25. Consequently, room revenue remained subdued, and occupancy levels were impacted despite the renovated property being fully operational towards the end of the year. Further, till October 2025, the revenue of OMLLP stood at ~Rs. 22 Cr and EBITDA stood at ~Rs.8.90 Cr. EBITDA margins were declined though remained at healthy levels at 34.70 per cent in FY25 as compared to 45.22 per cent owing to cost optimization and strong F&B performance; however, PAT margins declined and stood at 4.82 per cent in FY25 as compared to 6.74 per cent in FY24 due to higher interest costs on additional term loans taken for renovation and expansion. PAT has arrived after considering non-operating income of Rs. 4.97 Cr in FY2025 and Rs. 6.24 Cr in FY2024 which mainly consist of interest received on loans and advances extended to group companies/SPVs. Acuité believes, the operating performance of the company would remain steady supported by the  Marriott tie-up and full room inventory utilization.

Working capital intensive nature of operations
OMLLP’s operations remain working capital intensive, as reflected by elongated gross current asset (GCA) days. The GCA days stood at 422 days in FY25 as compared to 381 days in FY24. This is largely due to significant advances and deposits maintained for operational requirements. Inventory and receivable cycles remained low, at 6 days and 3 days in FY25 and 11 days and 2 days in FY24 respectively. Creditor days improved though continue to be stretched at 95 days in FY25 and 142 days in FY24 owing to extended credit terms from food and beverage suppliers. The working capital intensity is expected to persist in the medium term, given the nature of the business and reliance on advances.

Moderate financial risk profile
The financial risk profile remains moderate in FY2025, marked by moderate net worth, gearing and debt protection metrics. Net worth stood at Rs. 73.53 Cr. in FY25 as against Rs. 66.18 Cr. in FY24, due to accretion of profits and capital infusion. Total debt increased to Rs.148.45 Cr in FY25 from Rs. 146.83 Cr in FY2024 due to additional term loans for renovation. Debt protection metrics remains moderate as DSCR and ICR continue to remain moderate at 1.15 times and 1.55 times in FY25 and 0.84 times and 1.55 times in FY24 respectively. TOL/TNW stood at 2.24 times in FY25 as compared to 2.50 times in FY24. Debt-to-EBITDA declined and stood at 5.03 times as against 3.85 times in FY24. Acuite expects the financial risk profile to remain moderate until revenue growth materializes post-Marriott integration.

Exposure to SPVs through extension of loans and advances
OMLLP has made significant infusions (through loans & advances towards its SPVs). These infusions constitute ~97 percent of the tangible networth. Further, these investments are expected to remain over the medium term. Therefore, any significant outflow towards these SPVs thereby impacting the liquidity of the company shall be a key rating monitorable.

­Cyclical nature of the hotel industry
The company is exposed to inherent cyclical nature of the hotel industry. Acuité believes the success of the company will be dependent upon its ability to excel in areas such as room rates, quality of accommodation, service level and convenience of location and also the quality and scope of other amenities, including food and beverage facilities after the completion of the project.