# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹333 Cr** Q2 FY'26 (+11%) · **₹635 Cr** H1 FY'26 (+18%) * **EBITDA:** **₹161 Cr** Q2 FY'26 (+17%) · **₹289 Cr** H1 FY'26 (+34%) * **PAT:** **₹75 Cr** Q2 FY'26 · **₹83 Cr** H1 FY'26 (vs. ₹-126 Cr loss prior year) ## B. Revenue Growth * **Strong Top-Line Momentum:** Robust double-digit revenue growth across quarters, driven by room, F&B, and high-margin HMA fee streams. * **Room & F&B Trends:** Room and F&B revenues showed sequential improvement, with **QoQ growth of ~13% and 6%**, respectively, reflecting sustained demand recovery. * **HMA & F&B Strength:** Capital-light HMA fees and F&B segments delivered above-group average growth, signaling portfolio diversification success. ## C. EBITDA Margin * **High Operating Leverage:** Business converted **77% of incremental H1 revenue** into EBITDA, with **70% flow-through in Q2**, highlighting efficient cost control. * **Dubai Asset Contribution:** Palm Jumeirah hotel to add **~$40M annual EBITDA** immediately post-closing, with new retail wing contributing **₹10 Cr annualized EBITDA**. * **Core Margin Expansion:** Excluding treasury income, core operating EBITDA margin improved 200 bps, underscoring underlying profitability strength. ## D. Profit After Tax * **Sustained Profitability:** Achieved **fourth consecutive quarter of positive PAT**, driven by EBITDA growth and **significant reduction in finance costs**. * **Year-on-Year Turnaround:** H1 PAT swung from substantial loss to profit, reflecting both operational recovery and improved capital structure. --- # 2. RevPAR & Occupancy ## A. Key Figures * **Q2 FY'26 RevPAR:** **₹13,262** (+13%) · **H1 FY'26 RevPAR:** **₹12,616** (+16%) * **Occupancy:** **66%** in H1 FY'26 (+8 ppt) · **71%** in Bengaluru (Q2) · **early 60s%** in Jaipur * **ADR Growth:** **10%** in H1 FY'26 · **7%** in Q2 FY'26 * RevPAR Growth by Segment: ~14% city hotels (Q2) · 10% resorts (Q2) · 14.5% city & 22.5% resorts (H1) ## B. ADR Growth * **Outperformance Confirmed:** RevPAR growth tripled the luxury industry average for the fourth straight quarter, reflecting strong brand momentum and ecosystem leverage. * **Profitability Sustained:** Company reports fourth consecutive quarter of positive PAT, underpinned by balanced ADR and occupancy gains. * **Growth Drivers:** Double-digit RevPAR expansion driven by robust demand across retail, corporate, and group segments, with favorable mix from F&B, banqueting, and wellness. * **Forward Confidence:** Management expects sustained double-digit RevPAR growth in H2, supported by high-impact events and strong booking trends. ## C. Occupancy Rate * **Broad-Based Improvement:** Occupancy rose 8 percentage points to 66% in H1, with notable gains in Jaipur (up ~10–12 ppt) and Bengaluru (71% in Q2). * **Resilience in Key Markets:** Bengaluru delivered 16% RevPAR growth despite IT sector headwinds, showcasing operational agility and pricing power. ## D. City vs Resort * **City Hotels Outpace Resorts:** Q2 RevPAR growth was stronger in city hotels (~14%) versus resorts (10%), reversing H1’s parity, indicating rebound in urban luxury demand. * **International Benchmarking:** Jumeirah beachfront properties maintain high standards with ~75% blended occupancy and **$600–$700 ADR**, signaling premium positioning. * **Booking Momentum:** Positive early signals in advanced bookings include rising international business, celebration events, and city-level festivals. --- # 3. Asset & Portfolio Expansion ## A. Key Figures * **Dubai Stake Investment:** **$49 Mn (₹437 Cr)** for 25% stake * **Renewable Energy Usage:** **65%** post Chennai solar plant commissioning * **FY '30 EBITDA Target:** **~₹1,500 Cr**, with **₹250 Cr** from new projects and **₹500 Cr** from acquisitions * **Project EBITDA Potential:** **~₹300 Cr** from two evaluated transactions (₹800 Cr net investment) * **HMA Fees (Dubai):** **₹55–65 Cr/year** projected long-term * **Acquisition Valuation:** **12.8x CY'25 EBITDA** for Dubai asset ## B. New Projects * **Strategic Dubai Entry:** Board approved 25% stake in a **546-key beachfront luxury resort** on Palm Jumeirah, adjacent to Atlantis The Royal, enabling immediate EBITDA generation and global brand expansion. * **Capital-Efficient Structure:** Joint venture with Brookfield enables optimal FSI utilization; **residence sales to fully recycle Leela’s capital**, targeting **near-zero equity** in the hotel long-term. * **Rebranding & Upside Path:** Asset to be rebranded as **The Leela** in 2027 post-renovation; residences to be sold as **The Leela Residences**, unlocking capital gains and enhancing ROCE. * **Domestic Pipeline Acceleration:** New verticals (ARQ, luxury residences) and owned developments in **Udaipur, Mumbai, Srinagar, Agra, Ayodhya, Ranthambore, and Bandhavgarh** to drive incremental EBITDA at marginal cost. * **BKC Restructuring:** Development refocused on hotel operations with 50:50 hotel ownership; Brookfield fully responsible for office component, improving capital allocation. ## C. HMA Contracts * **Capital-Light Growth:** Expansion via HMA agreements in **Sikkim and Mumbai** to deliver **high-margin, ROCE-accretive** growth with minimal capital outlay. ## D. International Entry * **Global Brand Play:** Dubai marks strategic international foray into a key feeder market, leveraging **iconic real estate** and **institutional partnership with Brookfield** for sustainable value creation. * **Attractive Risk-Return Profile:** Acquisition at **8x EBITDA** with **17% stabilized yield on cost**, supported by strong governance and balance sheet capacity for further global opportunities. --- # 4. Capital Allocation & ROCE ## A. Key Figures * **Leela’s CAPEX Contribution (BKC):** **₹800 Cr** over 4 years (land + hotel) * **Leela’s Equity Contribution (Dubai):** **$49 Mn** (25% of $503 Mn EV) * **Stabilized EBITDA (BKC Hotel):** **₹150–155 Cr** annually, with **₹30–35 Cr** in fees * **Yield on Cost (BKC):** **16%–17%** based on Leela’s capital outlay * **Adjusted ROCE:** **14%** (as of Sep-25, post-adjustments) * Debt Refinancing: Avg. cost reduced to **8.4%**, tenure extended to **~15 years** ## B. Capital Allocation & Project Structure * **Strategic JV Model:** BKC project restructured into a **50:50 co-investment** for the hotel, with **Brookfield fully funding and owning the 7 cr sq ft office component**, marking a shift from initial mixed-use plans. * **Capital Efficiency:** Leela retains **full operational control** of the hotel under an HMA while limiting capital exposure; **no parent guarantee or promoter pledge** required, underscoring balance sheet strength. * **Phased Execution:** CAPEX will be deployed over **four years** with **partial, non-disruptive renovations** leveraging the 23-acre multi-wing layout; full shutdown avoided. * **Self-Funded Growth:** Dubai equity funded via **internal accruals**, supported by **over ₹1,000 Cr cash** on hand; non-recourse debt **excluded from consolidation**. ## C. Return Metrics & Payback Profile * **Attractive Yield on Cost:** BKC investment delivers a **16–17% YOC** driven by EBITDA and HMA fees, significantly outperforming traditional hotel models at **15–20x entry multiples**. * **Rapid Equity Payback:** Dubai acquisition targets **2–3 year equity recoupment** through **branded residence sales (182 units)**, structured at an **8x 2025 EBITDA entry multiple**. * **ROCE Accretion:** Capital recycling and high-return projects are **structurally ROCE accretive**, with adjusted ROCE at **14%** after removing distortions from revaluation reserves and pre-IPO capital. --- # 5. Brand & Customer Experience ## A. Key Figures * **NPS Score:** **86** (H1 FY'26) (+highest in sector) * **Employee Retention Ratio:** **79%** (H1 FY'26) * **Retail Segment Contribution:** **58%** of room revenue (Q2) (+23% YoY) ## B. Brand Excellence & Recognition * **Industry-Leading Guest Experience:** Sustained **NPS of 86** reflects superior service delivery and positions The Leela as the sector benchmark for customer satisfaction. * **Global & Culinary Accolades:** Multiple awards—including **Best City Hotel (New Delhi)** and rankings for **ZLB 23** and **Le Cirque/Megu**—validate brand prestige and leadership in luxury hospitality and fine dining. * **Talent as Competitive Advantage:** High employee retention underscores success of flagship development programs, reinforcing reputation as **employer of choice** in the industry. ## C. Direct Bookings & Distribution Strategy * **Direct Channel Momentum:** Strong growth in **brand.com bookings** and proprietary distribution system enabled outperformance amid sectoral headwinds, driven by dynamic pricing and retail segment strength. * **Strategic Focus Areas:** Continued push on expanding direct sales and enhancing guest touchpoints through reimagined outlets like **Le Cirque** and **Qube**. ## D. Luxury Ecosystem Expansion * **ARQ Club Scaling:** The **invite-only ARQ club** in Bengaluru is expanding to **New Delhi and Chennai (H2 FY'26)**, with Mumbai rollout to follow, targeting high-net-worth leaders. * **Integrated Luxury Experience:** Launch of **34,000 sq ft luxury retail space** featuring **Sabyasachi and Zoya**, alongside ARQ and reimagined F&B, advances a **holistic luxury ecosystem** aligned with rising unmet demand. --- # 6. Risks & Market Factors ## A. RevPAR Volatility * **Forward-Looking Caution:** Management emphasized that forward-looking statements are subject to **risks and uncertainties** that could materially affect outcomes, advising investors to exercise caution. * **Project Financing Update:** Non-recourse debt for the Dubai project is in final stages with lenders; specific terms including finance costs will be communicated upon closure. ## B. Geopolitical Exposure * **Strategic ESG Commitment:** Company maintains long-term **Net Zero by 2050** target, embedding ESG as a core differentiator in its luxury hospitality positioning. * **Unique JV Advantage:** Partnership with **Brookfield** is globally distinctive, enhanced by active strategic support from the principal shareholder in driving expansion. ## C. Valuation Sensitivity * **Favorable Sector Dynamics:** Indian luxury hospitality faces a projected **9% CAGR demand-supply gap** (FY'25–FY'28), creating strong pricing and occupancy tailwinds. * **Residential Value Potential:** While residence pricing remains undisclosed pending rebranding, the Dubai residential market is robust and the brand upgrade is expected to capture premium value. --- # 7. Guidance & Outlook ## A. Key Figures * **FY'25 EBITDA:** **₹700 Cr** * **H1 FY'26 EBITDA Growth:** **~30%** * RevPAR Growth (Q3-Q4 prior year): 13%–15% * **Target EBITDA:** **₹2,000 Cr by FY'30** ## B. EBITDA Target * **Strong FY'26 Momentum:** Mid- to high-teens EBITDA growth outlook maintained, underpinned by robust H1 performance and favorable seasonality. * **Path to ₹2,000 Cr EBITDA:** Dubai and BKC assets expected to contribute **₹300 Cr**, leaving **₹200 Cr gap** to be filled via selective, capital-light acquisitions, potentially using the Palm Jumeirah partnership model. * **Capital Allocation Discipline:** Future investments, including in Dubai, contingent on **attractive valuations**; no deals will be pursued otherwise. ## C. ROCE Growth * **High-Turn ROCE Target:** Aiming for high-teens ROCE expansion driven by same-store operational improvements, including upgraded F&B, banquet, spa, and wellness offerings. ## D. FY26 Forecast * **Sustained Growth Trajectory:** Long-term EBITDA target of ₹2,000 Cr by FY'30 supported by RevPAR expansion, cost efficiency, and pipeline of **over 1,500 rooms**, with Brookfield partnership as a key enabler. * **Confidence in Upside:** Management sees potential for **EBITDA growth beyond current targets** with minimal capital, leveraging unique operating advantages. * **H2 Revenue Visibility:** Strong business-on-book position typical of seasonal patterns, reinforcing confidence in full-year delivery. * **Opportunistic Expansion:** Strategic focus on value-adding, high-return opportunities—particularly through Brookfield—rather than broad market bets.