Summary
Leela Palaces Hotels & Resorts Limited - Q3 FY26 Earnings Call Summary Friday, January 16, 2026 18:00 IST
Event Participants
Executives 2 Anuraag Bhatnagar (CEO), Ravi Shankar (CFO & Head of Asset Management)
Analysts 8 Abhay Khaitan, Achal Kumar, Binay, Dipak Saha, Karan Khanna, Murtuza Arsiwala, Nikhil, Sreetika Mohapatra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹457 crores | +21% YoY; driven by 17% ADR growth and robust F&B performance. |
| Operating EBITDA | ₹238 crores | +23% YoY; fifth consecutive quarter of double-digit growth. |
| EBITDA Margin | 52% | +61 bps YoY; best-ever quarterly margin performance for the company. |
| PAT | ₹148 crores | +164% YoY (from ₹56 crores); driven by EBITDA expansion and lower finance costs. |
| RevPAR | ₹15,626 (9M) | +18% YoY; driven by 13% ADR growth and 3 percentage point occupancy improvement to 68%. |
| ADR | Reported Growth | +17% YoY in Q3; maintaining a ₹5,000 premium over the India luxury segment average. |
| F&B Revenue | Reported Growth | +29% YoY; fueled by 17% growth in non-resident footfalls and new restaurant launches. |
| Net Debt | ~₹700-800 crores | Gross debt at ₹1,400 crores with ₹600-700 crores cash; interest rates renegotiated from 9.1% to 8.25%. |
Geographic & Segment Commentary
- City Portfolio: Delivered 17% RevPAR growth in Q3; corporate and individual travel remains strong with 60-70% business mix from these segments.
- Resort Portfolio: Outperformed during the peak celebration season; Leela Palace Jaipur RevPAR grew 27% following comprehensive F&B repositioning.
- International (Dubai): Closed 25% equity stake acquisition in November 2025; rebranding to “The Leela” expected in CY2028 following 2027 upgrades.
- Rajasthan Circuit: Strengthening cluster with the addition of an 80-key managed hotel in Jaisalmer (operational late CY2026) and upcoming owned property in Agra.
Company-Specific & Strategic Commentary
- Holistic Luxury Ecosystem: Focused on total revenue premium; Jamavar Jaipur saw 40% revenue growth post-relaunch, while digital direct bookings (website) grew 153%.
- Expansion Milestone: Added three marquee assets since IPO (Mumbai BKC, Dubai, Jaisalmer), contributing an estimated ₹340 crores to stabilized earnings.
- Asset-Light Transition: The USD 70 million Dubai investment is structured to be recovered within 2-3 years via branded residence sales, effectively becoming asset-light.
- Club ARQ: Launched “members-only” club in Bengaluru; Delhi and Chennai launches scheduled for Q4 FY26 and Q1 FY27 to build a national luxury network.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 EBITDA Growth | Exceed “Mid-to-high teens” | Upward revision following strong 9M performance and 60%+ flow-through. |
| Long-term EBITDA | ₹2,000 crores by FY30 | To be achieved through same-store growth and a pipeline of 1,000+ keys. |
| ADR Growth | 9% - 10% CAGR | Management expects sustained pricing power due to muted luxury supply. |
| New Openings | FY28 (Srinagar/Bandhavgarh) | Srinagar (brownfield) and Bandhavgarh (wildlife) expected early in FY28. |
Risks & Constraints
| Risk | Context |
|---|---|
| International Travel Lag | While the domestic market has compensated, management noted that seasonal international leisure uptake has not yet fully recovered to historical peaks. |
| Project Execution | Construction is underway across five owned sites; Agra project required complex Taj-proximate approvals, potentially impacting timelines. |
| Talent Competition | Industry-wide supply of luxury keys is increasing; management is countering with retention initiatives (82% retention rate) and leadership programs. |
Q&A Highlights
Demand Trends & Regional Variation
- Question: Are you seeing weakness in specific cities like Mumbai compared to Delhi/Bengaluru? (Binay)
- Answer: Luxury consumption remains inelastic and high double-digit demand continues across all cities. City hotels grew RevPAR by 17% in Q3, showing broad-based resilience (Anuraag Bhatnagar).
Dubai Acquisition Timeline
- Question: What is the roadmap for the Dubai hotel branding and villa sales? (Murtuza Arsiwala)
- Answer: Current operator remains until Dec 2026. Upgrades start in 2027 with rebranding in 2028. Villa sales are initiated and expected to complete over 2-3 years (Anuraag Bhatnagar).
Pricing Power
- Question: Are current ADRs of ₹38,000+ sustainable? (Achal Kumar)
- Answer: Luxury supply in key micro-markets is muted. With the addressable luxury household market expected to triple by 2030, demand far outstrips the <29,000 luxury keys available in India (Anuraag Bhatnagar).
Capital Allocation
- Question: Would you prefer owned or managed growth for new assets like Jaisalmer? (Achal Kumar)
- Answer: We evaluate based on ROE/ROCE. While Jaisalmer is managed (HMA), we remain open to high-yield equity investments in key markets like Goa (Ravi Shankar).
Key Takeaway
Leela Palaces delivered a record Q3 FY26, characterized by its highest-ever quarterly EBITDA margin of 52% and 20% RevPAR growth, significantly outperforming the broader luxury industry. The company successfully capitalized on the “premiumization” trend in India, maintaining a ₹5,000 RevPAR premium over competitors while achieving a 153% surge in high-margin direct website bookings. Strategically, the period marked the closing of the Dubai acquisition and the signing of a new marquee managed property in Jaisalmer, bringing the growth pipeline to over 1,000 keys. Management remains confident in exceeding previous FY26 guidance and reiterated a ₹2,000 crore EBITDA target by FY30, underpinned by a supply-constrained luxury market and 60%+ flow-through of incremental revenues. The firm’s ability to drive ADR and F&B growth despite broader macro headwinds suggests a robust competitive moat in the pure-play luxury segment.
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