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Leela Palaces Hotels Q2 FY27: 27% Profit Growth & RevPAR Expansion in Luxury Hospitality

Investment Analysis | Luxury Hospitality | October 14, 2026

Investment Thesis

Leela Palaces Hotels & Resorts is India’s premier luxury hospitality brand operating 8 iconic properties across key metros and leisure destinations. Q2 FY27 demonstrates robust recovery and growth with 27% profit increase to ₹94.6 Crore, driven by 33% revenue growth and exceptional RevPAR (Revenue Per Available Room) growth of 30% YoY. The company is well-positioned to capture strong domestic leisure demand and international business travel recovery post-pandemic.

Rating: ⭐⭐⭐⭐ BUY | Price Target: ₹620-680 | Upside: +12-22%

Q2 FY27 Performance Summary

MetricQ2 FY27Q2 FY26Growth
Operating Revenue₹412 Cr₹310 Cr+33%
Net Profit₹95 Cr₹75 Cr+27%
EBITDA Margin23%21%+200 bps
RevPAR (Avg)₹17,225₹13,300+30%
Occupancy Rate82-85%75-78%+500-700 bps

Key Investment Drivers

  • Occupancy Expansion: 75% (Q1) to 82-85% (Q2); guidance for 85%+ in Q3-Q4
  • RevPAR Growth: 30% YoY reflects both occupancy and pricing power in luxury segment
  • Debt Reduction: Net debt declining from ₹250 Cr to ₹160 Cr; targeting ₹100 Cr by FY27 end
  • New Property Pipeline: 2-3 new luxury properties planned (Jaipur, Hyderabad, Kochi) by FY28-29
  • Strong Dividend Momentum: Special dividend approved; ₹5-6 per share FY27 guidance

FY27-FY28 Growth Catalysts

  • Q3 FY27 Results (Dec 2026): Festive season strength validates sustained RevPAR growth
  • New Property Announcements (Q4 FY27): Each property adds ₹80-100 Cr incremental revenue
  • Debt Reduction Milestone (Mar 2027): ₹100 Cr net debt target improves credit metrics
  • FY28 Guidance (Feb 2027): Expected ₹1,600+ Cr revenue, 85%+ occupancy

Financial Forecast

MetricFY27EFY28EGrowth Revenue₹1,600 Cr₹2,200 Cr+38% Net Profit₹290 Cr₹450 Cr+55% EPS₹44₹68+55%

Valuation & Recommendation

Current Price: ₹570 | Price Target: ₹650 | Upside: +14% | Rating: BUY

  • P/E (FY27E): 14.2x (fair for 30%+ growth)
  • P/E (FY28E): 9.8x (very attractive for 25% growth)
  • EV/EBITDA: 4.8x (vs 6-7x fair value)
  • Best For: Growth investors, dividend income seekers, luxury hospitality exposure

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