Leela Palaces Hotels & Resorts Limited

Leela Palaces Hotels & Resorts Limited reported robust financial performance for Q3 FY26, with operating revenues growing 21% year-on-year to ₹457 crores. Operating EBITDA increased by 23% year-on-year to ₹238 crores, resulting in a strong EBITDA margin of 52%, an improvement of 61 basis points. The company's Profit After Tax (PAT) saw a significant jump, rising from ₹56 crores in Q3 FY25 to ₹148 crores in Q3 FY26, primarily driven by EBITDA expansion and reduced finance costs.

The company continued to demonstrate strong outperformance in the luxury hospitality sector, with its market share increasing by 15 points between April and November 2025. RevPAR grew 20% year-on-year in Q3 FY26, supported by a 17% uplift in ADR, and its RevPAR premium over the luxury segment increased from 141 to 162. This sustained leadership is attributed to Leela's unique brand positioning, proprietary sales and distribution network, and consistent ability to attract high demand and price premium over competitors.

Leela Palaces is actively pursuing strategic capital-efficient growth. The Dubai transaction was closed, securing a 25% equity stake in the asset with a total investment of USD 70 million, projected to yield ₹180 crores in stabilized earnings. This investment is expected to be recovered within 2-3 years through the sale of residences. Additionally, a management agreement for an 80-key luxury hotel in Jaisalmer was signed, slated for operation by the end of calendar year 2026, contributing an estimated ₹6 crores in stabilized fees. The net capital outlay for these three new hotels (Mumbai BKC, Dubai, Jaisalmer) is ₹1,650 crores.

A key focus on food and beverage quality and guest experience drove a 29% year-on-year revenue growth in F&B, supported by a 17% increase in non-resident footfalls. The Leela Palace Jaipur underwent comprehensive repositioning, introducing new dining concepts like Aravali Dining Room and Peacock Lounge. Notably, Jamavar in Jaipur has already achieved 40% revenue growth since its relaunch in November '25, with other renovated restaurants like Le Cirque and The Qube also showing 40% and 27% growth respectively.

The company successfully renegotiated its term loans, reducing the interest rate from 9.1% to 8.25%, which is expected to enhance PAT. As of the reporting period, gross debt stood at ₹1,400 crores, with cash balances ranging from ₹600-700 crores, indicating a net debt of approximately ₹700-800 crores. Approximately 90% of the ₹450 crores allocated for asset management initiatives has been utilized, with the remaining 10% planned for expenditure in Q4 FY26.

Leela Palaces maintains a strong emphasis on talent, reflected in an industry-leading Net Promoter Score (NPS) of 86 and an 82% retention rate for the nine months of FY26. The company was recognized as a great place to work and continues to invest in talent development programs, including its fourth batch of the Leela Leadership Development Program. ESG initiatives are integral to its strategy, with 65% of energy consumption sourced from green sources, contributing to a 3% year-on-year reduction in Q3 power costs.

Management expressed confidence in achieving mid-to-high teen EBITDA growth for FY26 and over the next two-three years, with a long-term target of ₹2,000 crores EBITDA by FY30. This growth is anticipated from ADR and occupancy expansion, new F&B and spa outlets, and the launch of the members-only ARQ club in three new cities. The company expects double-digit growth in both ADR and RevPAR for Q4 FY26, which is historically a stronger quarter.