Leela is structurally advantaged as luxury travel shifts toward experiential stays, commanding 30–40% average revenue rate/revenue per available room premium over peers.
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Nirmal Bang Report
Nirmal Bang has initiated coverage on Leela Palaces Hotels and Resorts Ltd. with a Buy rating and a target price of Rs 529, implying a 26% upside from the current market price of Rs 419.
Leela is positioned as a pure-play luxury hospitality brand with marquee city palaces and experience-led leisure assets.
The company is structurally advantaged as luxury travel shifts toward experiential stays, commanding 30–40% average revenue rate/revenue per available room premium over peers.
Nirmal Bang expect Leela to deliver a strong growth runway with owned keys rising to 1,567 by FY28E (ex-Srinagar JV) and managed keys reaching 2,214 by FY27E (ex-Palm Jumeirah), thereby supporting FY25–FY28E RevPAR/ARR CAGR of ~11%/~10% and revenue/Ebitda CAGR of 16%/18%, as the mix upgrades and food and beverage/banquet monetization adds to the operating leverage.
Risks to brokerage thesis:
Delay in FY28E-heavy pipeline could defer revenue/Ebitda/PAT growth.
Severe downcycle may weaken cash flows and increase borrowing.
High reliance on five properties can impact the business in the case of any disruption.
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