Strong 1Q; Executing well in a volatile operating environment – Reiterate Buy

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Leela Palaces Hotels & Resorts

Strong 1Q; Executing well in a volatile

operating environment – Reiterate Buy

Maintain Rating: BUY | PO: 565.00 INR | Price: 494.60 INR

Luxury resilience + self-help efforts drive outperformance

03 August 2026

Leela delivered an operationally strong 1QFY27 despite travel disruptions and softer

foreign tourist arrivals (FTAs) – reported revenues/EBITDA grew 28%/41% YoY.

Excluding the Coorg acquisition as well, 1Q performance is healthy reflecting resilience

of luxury hospitality sector and the company’s ability to dial up domestic demand (58%

revenue share in 1Q vs. 54% in 1QFY26) amid external disruptions. Mgmt. reiterated its

FY27E guide of double-digit RevPAR growth and mid-to-high teens EBITDA growth.

While the environment remains volatile, mgmt. talks about sequential improvement in

international room revenue from -10% YoY in March to +1% in June. Further, the usual

pick-up in foreign tourists and marquee events (e.g., BRICS Summit) in 2H may also help,

besides sustained domestic demand. We remain positive on Leela given its luxury

positioning (industry leading NPS of 86; RevPAR premium of 1.5x) and bottom-up efforts

(portfolio expansion, asset mgmt., cost savings, talent development, etc.). Maintain Buy.

Equity

1QFY27: Broad-based delivery across segments

Price

Leela’s topline growth was broad-based with both city and resort hotels doing well.

Segment-wise, room income grew 25% YoY on the back of c.17% RevPAR growth (15%

ex-Coorg), balanced across ARR (+10%) and occupancy (+390 bps) growth; F&B revenues

rose 25% YoY driven by MICE-led business and non-resident footfall. HMA fees grew

86%, continuing the 4Q momentum; mgmt. believes this may sustain hereon. EBITDA

margin expanded ~380bps YoY to 40.7% led by same-store growth, higher HMA fees,

leverage and cost saving efforts. Adj. PAT came in at Rs0.5bn (in-line; includes Rs156mn

loss from the Dubai asset). Recovery in Dubai asset remains a key watchout near-term.

Growth drivers aplenty; Tadoba adds to the wildlife circuit

The company is working on many growth levers, including – i) Portfolio expansion –

…