Leela Palaces Rated New 'Buy' At ICICI Securities With 51% Upside — Check Target Price

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ICICI Securities Report

ICICI Securities initiates coverage on Leela Palaces Hotels and Resorts Ltd. with a 'Buy' rating and a target price of Rs 600, implying a potential upside of 51% from current market price of Rs 397.

The brokerage values the company’s hotel business at 22x Dec’27E EV/Ebitda valuing the hotel business at an enterprise value of Rs 203.5 billion.

The target multiple of 22x is in line with the brokerage's target multiple of 22x for Lemon Tree Hotels and Chalet Hotels.

Adjusting for net debt of Rs 9.2 billion, as of Dec’27E and adding BKC, Mumbai and Dubai investments at 1x P/B of Rs 6.2 billion, ICICI Securities derive an equity value of Rs 200.5 billion or Rs 600/share.

Key risks: Slowdown in hotel occupancies/average room rates; and delay in execution of upcoming hotel assets.

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