Synopsis:
Hospitality stock is under the spotlight today after the company announced its Q2 results, drawing investor attention to its latest financial performance and business outlook.
A small-cap company that is a luxury hospitality company operating in India, is in the spotlight today after posting Q2FY26 results. Read the article below for detailed insights into its financial and operational performance.
With a market capitalization of Rs. 14,493.77 crore, the shares of Leela Palaces Hotels & Resorts Limited were closed at Rs. 434 on Tuesday, down by 6.75 percent from its previous closing price of Rs. 465.40. The stock has reached an intraday low of Rs. 427.45 in today’s trading session, implying a low of 8.15 percent from its previous day’s close price.
Q2FY26 Results
Leela Palaces Hotels & Resorts Ltd reported Rs. 310.65 crore in revenue for the second quarter of FY26, a 12.09 percent increase over the Rs. 277.15 crore for the same period in FY25. It increased by 13.05 percent as compared to Rs. 274.79 crore in Q1 FY26.
The consolidated net profit for the second quarter of FY26 was Rs. 74.72 crore, which was 758.85 percent higher than the Rs. 8.7 crore reported in the previous quarter and turnaround from loss of Rs. 51.17 crore in Q2 FY25. Profit growth was also reflected in earnings per share (EPS), which increased to approximately Rs. 2.35 in Q2 FY26 from Rs. 0.30 in Q1 FY26.
Operational Performance
The Leela delivered strong operational performance in H1 FY26, with its same-store portfolio achieving 77 percent operating leverage flow-through to EBITDA. RevPAR rose 13 percent YoY to Rs. 13,262, driven by higher occupancy and ADR, reflecting customer’s continued willingness to pay a premium for the brand’s offerings, supported by a net promoter score of 86. RevPAR growth outpaced the luxury segment across all markets, achieving 3x the market benchmark..
The Leela currently operates 13 properties with 3,544 keys across 11 Indian cities, including 5 owned, 7 managed, and 1 franchised hotel. With 9 hotels in the pipeline, the brand aims to expand to 22 properties over the next three years, focusing on high-growth markets such as Agra, Ayodhya, Bandhavgarh, Mumbai, Ranthambore, Sikkim, Srinagar, and Dubai, continuing its strategic focus on enhancing the brand and delivering premium guest experiences.
Global Expansion – Entry into Dubai
The Leela has received board approval to acquire a 25 percent stake in a luxury beachfront resort on Palm Jumeirah, Dubai, while Brookfield-managed funds will acquire the remaining 75 percent. The resort, spread over 23 acres, features 546 keys, including a 361-room hotel, 182 residences, and 3 villas, and represents the brand’s first international foray.
Also Read: Stock jumps 8% after company’s net profit increases 77% YoY in Q2
Domestic Expansion and Brand Development
Domestically, The Leela is enhancing its assets and brand presence, including de-merging the office business at Leela Palace BKC, Mumbai, where it will retain a 50 percent hotel stake while Brookfield funds the remaining hotel and fully owns the office component.
The brand also launched ARQ by The Leela, an ultra-exclusive member’s club at The Leela Palace Bengaluru, with openings in New Delhi and Chennai planned for H2 FY26. Additionally, a revamped 34,000 sq. ft. luxury retail wing at The Leela Palace Bengaluru, featuring brands like Sabyasachi and Zoya, is expected to generate over Rs. 100 million in annual revenue.
Strengthened Balance Sheet and Financial Flexibility
Following its IPO, The Leela strengthened its balance sheet, reducing net debt-to-LTM EBITDA to 0.5x, providing significant financial flexibility for growth initiatives. Strategic refinancing lowered the cost of debt to 8.4 percent from 9.1 percent and extended loan tenures, while an upgraded credit rating of AA (Stable) reflects enhanced liquidity, operational flexibility, and a robust capital structure to support continued expansion and strategic investments.
Outlook
The Leela is well-positioned to achieve mid-to-high teens EBITDA growth in FY26, driven by strong same-store growth through increased direct business and an optimal channel mix. Growth is further supported by healthy macro tailwinds in luxury demand across key markets, along with disciplined cost management and operational efficiency.
About the company
The Leela Palaces, Hotels and Resorts, India’s largest institutionally owned luxury hospitality brand backed by Brookfield Group, operates 13 premier properties across India. Renowned for architectural excellence and bespoke services, it has been globally ranked #1 by Travel + Leisure in 2020 and 2021, and among the top three in 2023 and 2024.
Written By Akshay Sanghavi
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
