Leela Palaces Hotels & Resorts Q2 FY27 Earnings Call: H1 PAT Surges 72%, Rs. 1,432 Cr Pipeline Capex Laid Out (THELEELA)

Leela Palaces Hotels & Resorts Ltd held its Q2 FY27 earnings call on October 14, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Second Consecutive Quarter of 35%+ EBITDA Growth

• Operating revenue grew 33% YoY to Rs.4,119M in Q2 FY 2026-2027, with room revenue up 39% to Rs.2,041M, F&B up 21% to Rs.1,456M, and management fees up 76% to Rs.289M.
• Operating EBITDA grew 36% YoY — the second consecutive quarter of 35%+ EBITDA growth — with margin expanding 118 bps to 46%.
• RevPAR grew 30% YoY in Q2 FY 2026-2027; ADR rose 30% to Rs.25,046, with India headline occupancy at 69% and same-store occupancy exceeding 70%.
• H1 FY 2026-2027 PAT rose 72% YoY to Rs.1,433M, supported by 30% revenue growth, 38% EBITDA growth, and 246 bps of margin expansion.
• City hotels grew 26%, resorts 18%, and FIT revenue 20% YoY in Q2 FY 2026-2027; growth was broad-based, with the "bricks impact" restricted to Delhi.
• Q2 ADR growth would have been high-teens (%) excluding the BRICS event impact on the New Delhi asset, per the CEO.

RevPAR Index at 1.46x; Suites and Direct Bookings Rising

• RevPAR index expanded to 1.46x — a premium of ~Rs.4,500 over the luxury market — while NPS stood at 87, 13 points ahead of the APAC luxury average.
• Suite occupancy rose over 700 bps across all owned assets and markets in India; paying suite occupancy is now mid-40s (blended including upgrades, late 60s), driven by a growing market willing to pay a premium for experiences.
• Direct bookings from the Leela brand website rose to 15.1% of room revenue in H1 FY 2026-2027, up from 10.5% in H1 FY 2025-2026.
• City hotels achieved record H1 occupancy of 74% vs 69% in FY 2025-2026; Leela was ranked the world's second best hotel brand (Travel & Leisure World's Best Awards 2026).
• 52% of H1 FY 2026-2027 revenue came from non-room sources; F&B revenue grew 21%, with the Q2 mix at 56% outlets and 44% banquets/MICE.
• Management cited recurring compression events (G20 FY24, India Energy Week FY25, AI Summit FY26) and India's growing events and MICE calendar as structural tailwinds for rates.

FY27 Guidance Affirmed Despite H1 Overachievement

• Original FY27 (FY 2026-2027) guidance was mid-teens EBITDA growth and double-digit RevPAR growth; H1 FY27 significantly overachieved this run rate, and management maintains high-teens growth guidance for H2 FY27, implying a full-year outcome materially above the initial target.
• H1 FY27 revenue growth was 38%; the CEO expects a strong H2 FY27, which historically contributes 65% of annual business, driven by international conferencing, leisure, and weddings.
• Q3 FY 2026-2027 RevPAR growth guided at high double-digit (%), citing strong festive demand and the ongoing Bloomberg convention.
• Corporate pricing for CY27 expected to grow mid to high double-digit (%), with the RFP season underway and a strategic shift of 60-70% of corporate static rates to dynamic pricing.
• Effective tax rate for FY 2026-2027 anticipated in the 20s (H1 FY27 rate: 16% of PBT).
• Q2 FY27 ESOP cost guided lower than the analyst's Rs.8 crores estimate, in a range of Rs.5–8 crores, per CFO Ravi Shankar.

Rs.1,432 Cr Owned Pipeline; BKC Lease Executed

• Total capex for the five contracted owned pipelines (Agra, Srinagar, Ayodhya, Ranthambore, Bandhavgarh) guided at Rs.1,432 crores, with Rs.150 crores spent to date; Rs.450 crores expected by end of FY 2026-2027 and Rs.600 crores in FY 2027-2028, with the balance subsequently.
• Opening timelines guided: Jaisalmer and Leela Luxury Residences in FY 2026-2027 (Ark Chennai in Q3 FY 2026-2027); Srinagar and Bandhavgarh towards end of CY 2027; Agra, Ayodhya, Ranthambore, and Sikkim in CY 2028; Tadoba towards CY 2030.
• Over 1,000 keys under development; the CEO is already contracted for 5,200 keys by FY30 (implying ~2,600 owned keys in a 50-50% owned/managed split), while evaluating asset-right, acquisition, and brownfield opportunities.
• Mumbai BKC lease deed with MMRDA executed in Sep 2026; management plans to buy the entire FSI and will seek shareholder approval. Project capex remains at Rs.800 crores (Rs.400cr equity, Rs.400cr debt) for a 250-room hotel and 700k sq ft office, with CY 2030 commissioning still realistic, subject to shareholder approval for incremental FSI fund infusion.
• BKC divestment consideration premature — the CFO said it is too early to discuss consideration for the 50% BKC office stake divestment; the process will be at arm's length via the board and conflict committee, subject to regulatory, shareholder, and other approvals.
• In-house capex execution model — Srinagar is executed end-to-end by the Leela team; Bandhavgarh and Ranthambore by a JV partner under Leela quality controls; Dubai through the Brookfield ecosystem adhering to Leela brand standards.
• Network expansion targets identified: Kolkata and Pune as target cities, and Goa plus other emerging experiential destinations as target resort markets, contingent on finding the right asset quality and returns at the right time.

Dubai Positive EBITDA; Coorg ADR Doubled Post-Branding

• Dubai JV (25% owned) reached operational breakeven in Q2 FY 2026-2027 and achieved EBITDA break-even in Q1 FY26-27 with positive EBITDA in Q2; PAT is impacted by interest and depreciation given the 25% ownership stake, and management declined to disclose specific Dubai JV EBITDA figures, citing third-party operation.
• Dubai handover from Sofitel scheduled early next year, with renovation planned to start in early FY28 (April 2027) and last one year, during which the hotel will be non-operational; management expects occupancy and rate improvement for the Dubai JV in Q3 and Q4 FY26-27.
• Coorg ADR doubled versus the pre-acquisition period following Leela branding in mid-July Q2 FY 2026-2027, and the asset has broken even at an EBITDA level; near-term focus is growing occupancy via 3-day, 5-day, and 7-day wellness itineraries targeting domestic and European markets.
• Jaipur resort operated above 60% occupancy in H1 FY 2026-2027; the overall resorts portfolio operates in the mid-50s, with management expecting a runway to late-60s occupancy over the next few years (implied FY 2027-2028 onwards), supported by all-inclusive offers, wellness programming, and investment in international OTAs (Expedia). Weekend revenues grew over 20% in Q2 FY 2026-2027.
• Residences business plan on track with a 2-3 year sales horizon; Leela Luxury Residences, Mumbai is on track for Q4 FY 2026-2027 as a new business line, with Gurgaon/NCR, Hyderabad, and Bangalore identified as potential scaling markets.

Deleveraging Continues; Payroll and ESOP Weigh on Flow-Through

• Net debt to LTM EBITDA improved to 1.4x (from 1.6x in Mar 2026); net debt stood at Rs.12,150M (Sep 2026), debt maturity exceeds 10 years, and the credit rating is AA stable.
• Finance costs fell 37% in H1 FY 2026-2027 to Rs.777M; management further reduced borrowing costs by 30 bps from mid-October 2026, described as a shield from policy rate hikes.
• HMA fees grew 76% YoY to Rs.289 million in Q2 FY 2026-2027, driven by ramp-up of managed properties, performance-linked fees, and key money investments; the CFO guided that 85-90% of management fees for new managed openings flows through to EBITDA.
• Q2 FY 2026-2027 margin compression attributed to payroll increases (new headcount and ESOP expense started this quarter) and the Kurg ramp-up; excluding ESOP and KUR stabilization costs, the CFO guided EBITDA flow-through at ~60%, and ex-ESOP payroll growth was 10-11% in H1 FY 2026-2027.
• Domestic market revenue grew 30% in Q1 FY26-27, and management expects continued strong domestic demand with no near-term tapering; international business grew low double-digit in Q1 FY 2026-2027, with a 50-50 mix targeted (period unspecified).
• Management cited a long-run ADR runway — "India luxury ADRs are significantly lower than in comparable markets" (Bali, Dubai, Singapore, Thailand) — with a strong runway over the next two decades; India's international inbound travel remains below pre-COVID levels, with smaller cities having 2x the leisure inbound of India as a country.
• Bengaluru asset productivity case study — RevPAR CAGR of ~16% between FY 2022-2023 and FY 2025-2026, running at 1.5x RGI index.