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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.

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.

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.

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.

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.

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.