Leela Hotels Operator Schloss Bangalore In Focus As Two Brokerages Initiate Coverage — Check Price Target

Axis Capital and Kotak Institutional Equities have initiated coverage on Schloss Bangalore Ltd., which operates the 'Leela Brand' in India. Both brokerages are bullish on the company's strong play in the luxury hotel segment.

Axis Capital has initiated coverage with a 'buy' rating, issuing a target price of Rs 505. The stock closed at Rs 415 on Monday, which implies a potential upside of around 22%.

The brokerage firm described Schloss Bangalore as "India's only pure-play luxury hotelier" with around 3,550 keys and a 10% control of the country's total luxury hotel supply.

What makes Axis Capital particularly bullish on Schloss Bangalore is the company's focus on expanding its owned-hotels portfolio and retaining its pure-play luxury status. They forecast revenue/EBITDA CAGRs of 14%/15% over FY25–28E for the company.

Axis Capital further expects higher average room rates (ARR) and occupancy to sustain superior margins, with revenue per average room growth in owned hotels driving earnings visibility.

The note also said that Schloss Bangalore's strong execution track record, backing from Brookfield, and robust balance sheet were positives.

Meanwhile, Kotak Institutional Equities has initiated coverage with an 'add' rating with a target price of Rs. 475.

The brokerage firm expects the company to deliver an attributable EBITDA to grow at a healthy 19% CAGR over FY2025–30E.

The growth will be driven by asset additions and favourable demand-supply dynamics.

Kotak's note pointed to upcoming expansion as well, with Schloss looking to add 763 owned keys and 203 managed keys, as well as a new hotel in Bandra-Kurla Complex in Mumbai. All these factors will aid growth beyond FY30.

Overall, both brokerages believe Schloss Bangalore is well-positioned to gain from India's growing luxury hotel space amid rising disposable income and the premiumisation theme.

Schloss Bangalore was listed on the stock market on June 2, at a discount of 6%. Since then, the stock has fallen 6%.