Target: ₹600
CMP: ₹411.15
We initiate coverage on Leela Palaces Hotels & Resorts (LEELA) with a BUY rating and a target price of ₹600, based on a 22x Dec’27E EV/EBITDA for its hotels business and a 1x P/B for the BKC/Dubai investments. Leela is a luxury hospitality company with 4,090 operational keys across 14 hotels, including 1,761 owned keys, along with a pipeline of 763 owned and 283 managed keys over FY25-30E.
We expect the company to deliver 16/17 per cent revenue/EBITDA CAGRs over FY25–28E backed by same-store RevPAR CAGR of 12 per cent and pipeline keys. A strong heritage brand, coupled with limited luxury supply in India’s tier-1 cities, augurs well for the company’s medium-term growth outlook.
Going forward, the company has a visible pipeline to expand its footprint from about 4,090 operational keys, as of Nov’25, to over 5,000 operational keys by FY30. Of this, a robust pipeline of six owned hotels with 763 keys along with three managed hotels with 283 keys would be a key growth enabler.
Further,the company’s revenue enhancement focus, through upgrading and repurposing its assets to add revenue streams and opening new verticals such as ARQ invite-only members club and Leela luxury residences, is expected to act as an additional growth lever.
Key risks: Slowdown in hotel occupancies/ARRs; and delay in execution of upcoming hotel assets.