Synopsis:
Morgan Stanley has recommended an “Overweight” call on Schloss Bangalore Limited, with target prices of ₹562, suggesting strong upside potential up to 32%.
This small-cap stock, engaged in owning, operating, managing, and developing luxury hotels and resorts under “The Leela” brand across India, jumped 1.14 percent after Morgan Stanley initiated an overweight call signalling 31 percent upside.
With a market capitalization of Rs. 14,495.44 crores, the share of Schloss Bangalore Limited has reached an intraday high of Rs. 434.50 per equity share, rising nearly 1.14 percent from its previous day’s close price of Rs. 429.60. Since then, the stock has retreated and is currently trading at Rs. 434.05 per equity share.
What is the news?
Morgan Stanley, a prominent brokerage firm, has recommended an “Overweight” call on Schloss Bangalore Limited with a target price of Rs. 562 per share, indicating an upside potential of 30.82 percent from its previous day’s close price of Rs. 429.60.
Rationale for Target
Morgan Stanley believes Schloss Bangalore’s share price may rise over the next 60 days. Although Q2 showed some slowdown, the overall trends are expected to improve in Q3, signaling better performance ahead.
The hotel industry’s Q2 revenue per available room (RevPAR) growth is likely to moderate from double digits to high single digits. Despite this, Schloss Bangalore’s RevPAR is expected to grow 12 percent year-on-year, reflecting strong performance in the luxury segment, which remains relatively resilient even in slower periods.
The company’s focused asset management is helping to boost occupancy from a lower base. Additionally, its limited presence in the competitive Mumbai market is an advantage, reducing pressure on operations. With these factors, industry growth is expected to pick up from Q3 onwards, supporting a positive outlook for Schloss Bangalore’s performance and share price.
Company Overview
Schloss Bangalore Limited was founded on March 20, 2019, and is a top luxury hospitality company in India, operating under the “The Leela” brand. It owns, manages, and runs premium hotels and resorts, known for excellent service and Indian-style hospitality.
As of June 30, 2025, the company has 13 hotels with 3,544 room keys, making it one of India’s largest luxury hotel chains. Its owned properties include five famous hotels in Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur.
Schloss also operates 67 restaurants and 12 spas across its hotels, catering to both leisure and business travellers. Supported by Brookfield, a global asset manager, the company continues to grow in India’s luxury hotel and MICE (Meetings, Incentives, Conferences, Exhibitions) sector.
Recent quarter results
Coming into financial highlights, Schloss Bangalore Limited’s revenue has increased from Rs. 228.24 crore in Q1 FY25 to Rs. 274.79 crore in Q1 FY26, which has grown by 20.40 percent. The net profit of the company turned from negative to positive, from a net loss of Rs. -74.99 crore in Q1 FY25 to a net profit of Rs. 8.71 crore in Q1 FY26.
In terms of return ratios, the company’s ROCE and ROE stand at 12 percent and 13.1 percent, respectively. Schloss Bangalore Limited has an earnings per share (EPS) of Rs. 1.73, and its debt-to-equity ratio is 1.16x.
Written By – Nikhil Naik
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