Leela Palaces Hotels & Resorts Limited — Q4 FY26 earnings call

Call held 28 Apr 2026

Management summary

Leela Palaces Hotels & Resorts Limited reported a strong Q4 and FY26, with operating revenue growing 12% and 15% year-on-year respectively. The company achieved a record PAT of INR 403 crores in FY26, an 8.5x increase from the previous year, and significantly reduced its net debt to EBITDA to 1.6x. Despite geopolitical headwinds impacting international travel and Q4 occupancy, the company demonstrated resilience through strong ADR growth and domestic demand, while also achieving its fastest pace of expansion with 23% growth in keys.

Highlights

  • FY26 PAT reached a record INR 403 crores, an 8.5x increase from INR 48 crores in FY25.

  • FY26 Operating EBITDA rose 19% Y-o-Y to INR 743 crores, with margin expanding by 167 bps to 49%.

  • Net debt reduced by 50% in FY26, bringing net debt to EBITDA to a conservative 1.6x.

  • Achieved fastest pace of expansion ever in FY26 with 23% growth in keys, adding 966 additional keys.

  • Q4 FY26 Operating Revenue increased 12% Y-o-Y to INR 484 crores, with Operating EBITDA rising 13% Y-o-Y to INR 266 crores, achieving a best-in-class EBITDA margin of 55%.

Concerns

  • Q4 FY26 occupancy was 72%, down from 78% in Q4 FY25, mainly due to the impact of geopolitical events on international travel.

  • International contribution to revenue dropped from 50% to approximately 40% in Q4 FY26 due to travel disruptions.

  • Payroll costs increased in Q4 FY26 due to accruals for a new labor code (leave encashment and gratuity) and new hires for value drivers.

Key financials

  1. Revenue ₹1,527 Cr +15%YoY
  2. Operating EBITDA ₹743 Cr +19%YoY
  3. PAT ₹403 Cr +739.5%YoY
  4. Operating EBITDA Margin 49%
  5. Same-store RevPAR Growth 14%
  6. Overall ADR Growth 13%

What they filed

Q1 FY27: revenue up 9.7%, net profit up 74.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue87 99 112 93 102 +17%124 +25%119 +6%102 +10%
EBITDA43 45 54 43 53 +23%61 +36%63 +17%50 +16%
Net profit-2 10 36 35 73 +3750%77 +670%91 +153%61 +74%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Coorg 19 villa expansion ₹38 Cr
    • New ARQ clubs (New Delhi, Chennai, Mumbai)
    • Greenfield development (Bandhavgarh, Srinagar, Sikkim, Agra, Ayodhya, Ranthambore)
    • Dubai property refurbishment
    So just to answer in terms of these three hotels, we have just put CY, basis one or two quarters of construction risk always moves because of the approval when you open the hotel. All the approvals of all these three hotels are already in place; the funding is already in place, the construction has started. So that's the reason we have, you know, it's all on pace. The capex numbers for these hotels remains the same, there is no escalation in the cost, Karan. So the numbers remain the same. (Ravi Shankar, page 10) ... The capex that we have planned for those additional villas are around INR 38 crores that we would spend to make those 19 villas. (Ravi Shankar, page 10)
  • Debt 1.6× EBITDA
    Our net debt reduced by 50%, with net debt to EBITDA now at a conservative 1.6x in FY26. (Anuraag Bhatnagar, page 5)
  • M&A Coorg (71-key resort) Acquisition · Closed

    Strengthened leisure portfolio, entry into nature immersive and wellness-anchored hospitality.

    Expected to contribute INR 65-70 crores revenue in first operating year (FY27) with 50-55% EBITDA margin (stabilized).

    During fourth quarter of FY26, The Leela strengthened its leisure portfolio with the acquisition of 71 key ultra-luxury all-villa operational resort in Coorg, to be unveiled as The Leela Coorg Forest Sanctuary, making our entry into nature immersive and wellness-anchored hospitality. (Anuraag Bhatnagar, page 5)

Guidance & targets

Revenue

  • Q1 FY27 Revenue Growth Revenue · Q1 FY27 · High confidence double-digit growth
    But Binay, just to add, May and June will be very exceptional good performance months for us and for the quarter we will do a double-digit growth in revenues and EBITDA.

    — Ravi Shankar

  • Coorg Acquisition Revenue (FY27) Revenue · FY27 · High confidence INR 65-70 crores
    We'll do somewhere around INR 65 crores to INR 70 crores will be the first year of revenue, and very healthy EBITDA margins we'll do, as we do in our Leela portfolio hotels, which will be almost 50-55% (stabilized) which we do for other resort hotels in our portfolio.

    — Ravi Shankar

  • Coorg Stabilized Revenue (including 19 villas) Revenue · year four · High confidence INR 165 crores
    So, the INR 165 crores of revenue numbers includes the 19 villas that we had planned for Phase 1. This number will be achieved in the year four when those 19 villas will also come into play.

    — Ravi Shankar

Profitability

  • Q1 FY27 EBITDA Growth Profitability · Q1 FY27 · High confidence double-digit growth
    But Binay, just to add, May and June will be very exceptional good performance months for us and for the quarter we will do a double-digit growth in revenues and EBITDA.

    — Ravi Shankar

  • Coorg Acquisition EBITDA Margin (stabilized) Profitability · FY27 · High confidence 50-55%
    We'll do somewhere around INR 65 crores to INR 70 crores will be the first year of revenue, and very healthy EBITDA margins we'll do, as we do in our Leela portfolio hotels, which will be almost 50-55% (stabilized) which we do for other resort hotels in our portfolio.

    — Ravi Shankar

Occupancy

  • FY27 Occupancy Occupancy · FY27 · High confidence early 70s
    So, occupancy for FY27 will be in early 70s for sure. The city hotel will do in mid-70s and resorts will be doing in mid-60s to late 60s.

    — Ravi Shankar

  • FY27 City Hotel Occupancy Occupancy · FY27 · High confidence mid-70s

    — Ravi Shankar

  • FY27 Resort Occupancy Occupancy · FY27 · High confidence mid-60s to late 60s

    — Ravi Shankar

  • Coorg Acquisition Occupancy (FY27) Occupancy · FY27 · High confidence early 40s
    So this will be our first operating year where we are right now working on the whole rebranding process, and will be doing the occupancy in early 40s for the first full year.

    — Ravi Shankar

Capex

  • Coorg 19 Villas Capex Capex · High confidence INR 38 crores
    The capex that we have planned for those additional villas are around INR 38 crores that we would spend to make those 19 villas.

    — Ravi Shankar

Project Timeline

  • Dubai Property Rebrand Date Project Timeline · 2028-01-01 · High confidence 1 January, 2028
    It will not be a huge any cost impact for us. Anyway, the operator who manages the hotel will continue to manage till end of this year, and our plan was that we'll get the handover on 1 January, 2027 and we'll refurb the hotel by end of that year and rebrand 1 January, 2028.

    — Ravi Shankar

Debt

  • Net Debt to EBITDA Debt · FY27 and beyond · High confidence similar levels of 1.6x, then lower to 1.4x, then closer to one
    So, I'll tell you we, obviously, our debt will increase for the capex that we'll do for the pipeline asset, but since our EBITDA will increase, our net debt to EBITDA will remain in the similar levels of 1.6x, and moving forward it will come down to lower to 1.4, and then come to closer to one.

    — Ravi Shankar

Membership

  • ARQ Clubs Stabilized Members Membership · stabilization · High confidence 2,000 members
    Our overall goal on stabilization once we have all the clubs open, and let me also tell you in addition to Bangalore, Chennai, and New Delhi, we are also looking for the ARQ club in Mumbai as well, and this has also come on the feedback of our guests. We are looking at an overall stabilized number of 2,000 members, because at that number we feel is the right fit where we can serve them, take care of them, and give them that kind of a luxury experience they have paid for.

    — Anuraag Bhatnagar

Cost Efficiency

  • Payroll Cost as % of Revenue Cost Efficiency · going forward · Medium confidence go down
    So, should we expect these costs to go down as a percentage of revenue going forward? It should, it should.

    — Ravi Shankar

What to watch in Q1 FY27

Q1 FY27 Revenue & EBITDA Growth

next quarter
Current Q4 FY26 Revenue +12% YoY, EBITDA +13% YoY
Target Double-digit growth for Q1 FY27

Why it matters

Key indicator of immediate business recovery and continued strong performance post-geopolitical headwinds.

But Binay, just to add, May and June will be very exceptional good performance months for us and for the quarter we will do a double-digit growth in revenues and EBITDA.

Risks & concerns

  • Geopolitical events impacting international travel and occupancy

    medium

    Geopolitical tensions caused a 6% drop in Q4 FY26 occupancy and shifted international revenue contribution from 50% to 40%.

    Management acknowledged

  • Impact of new labor code on payroll costs

    low

    Accruals for leave encashment and gratuity under the new labor code led to an exceptional increase in payroll costs in Q4 FY26.

    Management acknowledged

  • Minor delays in greenfield development projects

    low

    Ayodhya, Agra, and Ranthambore projects experienced 1-2 quarter delays due to construction risk, but no cost escalation is expected.

    Analyst downplayed

Q&A highlights

7 direct
Impact of geopolitical events on Q4 and Q1 FY27 trends Direct
So just to give some context, Leela has almost a 50%-50% share in terms of both international and domestic business. Our domestic business has not been impacted at all, and whilst some part of our international business has been impacted from a key source market. ... But Binay, just to add, May and June will be very exceptional good performance months for us and for the quarter we will do a double-digit growth in revenues and EBITDA.

Clarifies the immediate impact of global events on business segments and provides a positive outlook for the near-term, indicating resilience.

Asked by Binay Singh

MICE event cancellations and deferrals due to geopolitical environment Direct
We, obviously, had cancellations in MICE Events that were booked across the portfolio in the month of March, because of all the geopolitical tensions. What we did, we have given them credit notes and deferred them between the next six to nine months, so we expect many of them, a very high percentage of them coming back to us in the next few quarters.

Addresses the specific impact on MICE business and outlines management's strategy to retain and recover these bookings.

Asked by Karan

Coorg acquisition details, stabilized revenue, and capex for 19 villas Direct
So, the INR 165 crores of revenue numbers includes the 19 villas that we had planned for Phase 1. This number will be achieved in the year four when those 19 villas will also come into play. The capex that we have planned for those additional villas are around INR 38 crores that we would spend to make those 19 villas.

Provides specific financial targets and investment plans for the newly acquired Coorg property, detailing its future contribution.

Asked by Karan

Delays and cost inflation for Ayodhya, Agra, and Ranthambore projects Direct
So just to answer in terms of these three hotels, we have just put CY, basis one or two quarters of construction risk always moves because of the approval when you open the hotel. All the approvals of all these three hotels are already in place; the funding is already in place, the construction has started. So that's the reason we have, you know, it's all on pace. The capex numbers for these hotels remains the same, there is no escalation in the cost, Karan. So the numbers remain the same.

Clarifies the status of key pipeline projects, addressing concerns about potential delays and cost overruns, and confirming no cost escalation.

Asked by Karan

Dubai property plans, refurbishment, and rebrand timeline Direct
Anyway, our plan is to start a refurbishment work; this was our original plan as well, by the end of this calendar year, which we would then accelerate and reopen and launch the property in 2028 under The Leela brand. By this time, we are hopeful, I mean, we are talking of, like, significant 12 to 15 months from now, that we are hopeful that this market would have seen a recovery regarding residential sales, which was a part of our business plan.

Provides a clear timeline and strategy for the Dubai asset, including refurbishment and rebranding, amidst market conditions.

Asked by Dipak Saha

Q4 FY26 room, F&B, and HMA revenue breakdown Partial
So, maybe we can connect on a separate call to review deep dive numbers on the rooms and F&B and HMA. But what we had spoken earlier that rooms grew by, you know, for the quarter four by almost 6%, F&B grew by almost double-digit numbers, and HMA other income also grew by double-digit numbers.

Analyst requested specific numbers for revenue breakdown, which management offered to provide offline, indicating a lack of immediate transparency on detailed segment performance.

Asked by Akash

Drivers of RevPAR growth and performance of city vs resort hotels in Q4 Direct
So, if you talk about the occupancy, Abhay, we did an occupancy growth at quarter four, FY26 we were 72%, last year we did 78%, that was 6%, that was mainly because of the war impact. If the war cancellation would not have happened, we would have done similar occupancy or a little more than what we did for quarter four FY25. But if you look at the ADR, ADR grew by almost 15% from a INR 27,000 we went to INR 32,000. As a result, the RevPAR was 6% because of the occupancy drop.

Explains the specific factors influencing RevPAR in Q4, highlighting the trade-off between occupancy decline and strong ADR growth.

Asked by Abhay Khaitan

Cost inflation in Q4, particularly employee and F&B costs as a percentage of revenue Direct
I'll tell you in payroll, obviously, there has been impact of accrual for the new labour code where we have taken a impact on the both the leave encashment and gratuity, that has been a exceptional item in the payroll cost that has come in. ... That was one of the main reasons, and obviously our share of GHA revenue also increased and some commission on the sales side, which has increased. Otherwise all other cost as a percentage of revenue is lower than what was last year.

Addresses concerns about rising costs by explaining specific, largely one-time factors for payroll and changes in sales and marketing commission structures, with an expectation for future normalization.

Asked by Achal Kumar

3 min read 6 chapters

Detailed narrative

Q4 and FY26 Financial Performance

Leela Palaces Hotels & Resorts Limited reported a robust Q4 FY26 with operating revenue increasing 12% Y-o-Y to INR 484 crores and operating EBITDA rising 13% Y-o-Y to INR 266 crores, achieving a 55% margin. For the full FY26, operating revenue grew 15% Y-o-Y to INR 1,527 crores, and operating EBITDA increased 19% Y-o-Y to INR 743 crores, with margins expanding by 167 bps to 49%. The company achieved a record PAT of INR 403 crores in FY26, an 8.5x increase from INR 48 crores in FY25, underscoring structural business strengthening.

Resilience Amidst Geopolitical Headwinds

Despite geopolitical tensions impacting international travel and causing a 6% drop in Q4 FY26 occupancy to 72% (from 78% in Q4 FY25), Leela demonstrated resilience. ADR grew by 15% in Q4 FY26, from INR 27,000 to INR 32,000, mitigating the occupancy impact. Domestic demand remained robust, and the company's international revenue contribution shifted from 50% to approximately 40% in Q4 FY26. Management expects May and June to be 'very exceptional good performance months' with double-digit revenue and EBITDA growth for Q1 FY27.

Strategic Expansion and Portfolio Growth

FY26 marked Leela's fastest pace of expansion ever, with a 23% growth in keys, totaling 966 additional keys. The company acquired a 71-key ultra-luxury resort in Coorg, to be rebranded as The Leela Coorg Forest Sanctuary, with an additional INR 38 crores capex planned for 19 new villas. Greenfield developments in Bandhavgarh, Srinagar, Sikkim, Agra, Ayodhya, and Ranthambore are progressing, with projects like Ayodhya, Agra, and Ranthambore seeing a slight delay of 1-2 quarters but with no cost escalation.

Asset Management and Value Creation

Active asset management initiatives included the launch of ARQ BY THE LEELA, an invite-only ultra-luxury membership club, with the first club in Bengaluru and planned openings in New Delhi (Q1 FY27) and Chennai (Q2 FY27). The company aims for a stabilized base of 2,000 ARQ members. Refurbishments and new F&B outlets were added across properties, and the Leela Palace Bengaluru's high-end retail space was relaunched. Net debt reduced by 50% in FY26, bringing net debt to EBITDA to a conservative 1.6x, with expectations to further reduce it to 1.4x and then closer to one.

Focus on F&B and Non-Resident Revenue

F&B excellence continued to drive results, with F&B revenues growing 15% year-on-year in FY26 and contributing 40% of total hotel revenue. Non-resident footfalls across city hotels increased by 13% year-on-year for FY26, and 9-10% in Q4 FY26, reflecting the brand's increasing relevance as a destination for dining and events beyond resident guests. This focus helps in driving F&B revenue even with a slightly lower international mix, contributing to overall revenue growth.

Cost Management and Efficiency

The company maintained a very efficient cost structure, with over 60% of incremental revenue converting to operating EBITDA. While payroll costs increased in Q4 FY26 due to accruals for a new labor code (leave encashment and gratuity) and new hires for value drivers, management expects these costs to normalize and decrease as a percentage of revenue going forward. Sales and marketing costs also saw an increase due to changes in commission structures from platforms like Expedia and Agoda, which now charge on a gross basis.

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