Synopsis: Morgan Stanley and BOFA Securities gave positive ratings to Schloss Bangalore Limited, with target prices of ₹549 and ₹520, suggesting strong upside potential up to 35%.
This small-cap stock, engaged in owning, operating, managing, and developing luxury hotels and resorts across India under “The Leela” brand, offering premium hospitality experiences, jumped 4 percent after Morgan Stanley and BOFA Securities gave a target price of Rs. 549 and Rs. 520, respectively.
With a market capitalization of Rs. 14,126.42 crores, the shares of Schloss Bangalore Limited were currently trading at Rs. 423.95 per equity share, up nearly 4.25 percent from its previous day’s close price of Rs. 406.65.
Morgan Stanley, a prominent brokerage firm, has recommended an “Overweight” call on Schloss Bangalore Limited with a target price of Rs. 549 per share, indicating an upside potential of 35 percent from its previous day close.
Morgan Stanley has given an ‘Overweight’ rating to Schloss Bangalore Limited, citing a strong upcycle, rising demand for luxury experiences, and the company’s iconic assets. Its low net debt and attractive valuation also support the positive outlook.
The brokerage expects a 12 percent annual EBITDA growth through FY26-27 and a nine-fold increase in net income, driven by lower interest costs. With a nearly net-debt-free balance sheet, Schloss is well-positioned to fund its next phase of capital expenditure using free cash flows.
Additionally, BOFA Securities, a prominent brokerage firm, has recommended a “Buy” call on Schloss Bangalore Limited with a target price of Rs. 520 per share, indicating an upside potential of 27.87 percent from its previous day close.
BOFA Securities has given a positive outlook for Schloss Bangalore Limited, citing industry tailwinds and key initiatives such as the growth of its five iconic hotels and medium-term portfolio expansion. These factors are expected to support steady revenue and earnings growth.
Furthermore, The brokerage highlighted the company’s strong financial position with lower net debt and an attractive valuation at 20x estimated FY27 EBITDA. It forecasts a 12 percent revenue CAGR and 14 percent EBITDA CAGR, though it warns of risks like market downturns, brand issues, and competition.
Schloss Bangalore Limited was founded on March 20, 2019 and is a leading luxury hospitality company in India operating under “The Leela” brand. It owns, operates, and manages premium hotels and resorts known for top-tier services and Indian-inspired hospitality.
As of May 31, 2024, the company has 12 operational hotels with 3,382 keys, making it one of India’s largest luxury hotel chains. Its owned portfolio includes five iconic properties in Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur.
Schloss also runs 67 restaurants and 12 spas across its hotels, serving both leisure and business travelers. Backed by Brookfield, a global asset manager, the company continues to expand its presence in India’s luxury hospitality and MICE (Meetings, Incentives, Conferences, Exhibitions) market.
Coming into financial highlights, Schloss Bangalore Limited’s revenue has increased from Rs. 1,171 crore in FY24 to Rs. 1,301 crore in FY25, which has grown by 11.10 percent. The net loss of the company turned into net profit, from Rs. -2 crore in FY24 to Rs. 48 crore in FY25.
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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