THELEELA - Leela Palaces Hotels

📊 NSE: THELEELA 🏢 Hotels & Resorts 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 18% YoY to INR 634.8 Cr in H1 FY26. Room revenue increased 15% to INR 278.2 Cr, Food & Beverage (F&B) revenue grew 11% to INR 226.9 Cr, and Hotel Management Agreement (HMA) fees rose 14% to INR 30.5 Cr.

Geographic Revenue Split

Revenue is split between City Hotels and Resorts; City Hotels saw 14.5% RevPAR growth in H1 FY26, while Resorts experienced a 22.5% RevPAR increase. Bengaluru is identified as a key market.

Profitability Margins

The company achieved a significant turnaround with H1 FY26 Profit After Tax (PAT) of INR 83.4 Cr compared to a loss of INR 126.2 Cr in H1 FY25. Operating margins expanded due to a 77% incremental revenue flow-through to EBITDA.

EBITDA Margin

Reported EBITDA margin stood at 45.5% for H1 FY26, a 555 bps expansion from 39.9% in H1 FY25. Q2 FY26 EBITDA margin reached 48.2%, up 246 bps YoY.

Capital Expenditure

Planned CAPEX includes INR 800 Cr for the BKC Mumbai hotel project over the next 4 years. The company is also investing $49 million (approx. INR 410 Cr) for a 25% equity stake in a Dubai Palm Jumeirah asset.

Credit Rating & Borrowing

The company holds a 'AA Stable' credit rating. Average cost of debt was reduced from 9.1% to 8.4% following refinancing, with loan tenures extended from 8 to 15 years.

⚙️ Operational Drivers

Raw Materials

Primary operational costs include Food and Beverages consumed, which are part of the INR 346.1 Cr operating expenses in H1 FY26 (7% increase YoY).

Capacity Expansion

Current portfolio is being expanded with the BKC Mumbai project (250+ keys) and the acquisition of a luxury asset in Dubai. HMA expansions include Sikkim and Mumbai.

Raw Material Costs

Operating expenses (including F&B and employee benefits) represented 54.5% of total revenue in H1 FY26, increasing 7% YoY to INR 346.1 Cr.

Manufacturing Efficiency

Occupancy improved to 69% in Q2 FY26 (up 4 percentage points). The company achieved a high Net Promoter Score (NPS) of 86, driving pricing premiums.

Logistics & Distribution

Distribution is optimized through direct channels; the retail segment grew 23% YoY in Q2 FY26 specifically through brand.com and direct sales.

📈 Strategic Growth

Expected Growth Rate

15-19%

Growth Strategy

Growth will be driven by a mix of same-store RevPAR increases (targeting 3x market growth), asset-light HMA expansions in Sikkim and Mumbai, and strategic co-investments in high-yield markets like BKC Mumbai (16% expected yield) and Dubai (expected INR 55-65 Cr annual HMA fees).

Products & Services

Luxury hotel room stays, premium Food & Beverage (F&B) services, banqueting and event hosting, and third-party hotel management services (HMA).

Brand Portfolio

The Leela, Leela Palaces Hotels & Resorts.

New Products/Services

New managed properties in Sikkim and Mumbai, and the upcoming BKC Mumbai hotel are expected to contribute significantly to future EBITDA, with BKC alone targeting INR 150 Cr stabilized EBITDA.

Market Expansion

Expansion into Dubai's Palm Jumeirah to capture international feeder markets and entry into the Mumbai BKC financial hub.

Market Share & Ranking

The company achieved a 13 percentage point increase in market share over the India luxury hospitality segment in H1 FY26.

Strategic Alliances

Joint venture with Brookfield Properties for the BKC Mumbai development and partnership with Middle Eastern families for the Dubai asset.

🌍 External Factors

Industry Trends

The luxury hospitality industry is seeing robust demand; Leela is positioning itself to capture this through premiumization and increasing its direct-to-consumer (Retail) mix to 58%.

Competitive Landscape

Competes with other luxury hotel chains; currently outperforming the India Luxury Segment benchmark in RevPAR growth.

Competitive Moat

Moat is sustained by the 'The Leela' brand prestige, an NPS of 86, prime real estate locations with high entry barriers, and the financial backing of Brookfield (75.91% stake).

Macro Economic Sensitivity

Highly sensitive to luxury travel trends and domestic economic activity; RevPAR growth is currently 3x the industry benchmark due to strong macro-tailwinds.