Leela Palaces Hotels Rallies 10% to Hit Record High on Strong Q2 Profit and Surge in Room Rates

Shares of luxury hospitality chain Leela Palaces Hotels & Resorts surged up to 10% in intraday trade, hitting a fresh all-time high following the announcement of robust financial earnings for the quarter ended September (Q2 FY27). The stock has appreciated more than 42% over the past four months, reflecting heightened investor appetite for premium travel and hospitality plays.

The company posted a consolidated net profit of ₹94.6 crore for the second quarter, marking a 27% increase compared to ₹74.7 crore reported in the corresponding period of the previous fiscal. Revenue from operations climbed 33% year-on-year to ₹411.9 crore, driven by buoyant domestic travel demand, rising corporate spending, and strong pricing power across its properties.

Key Financial and Operational Highlights

• Operating Revenue: Rose 33% year-on-year to ₹411.9 crore.
• Operating EBITDA: Advanced 36% year-on-year to ₹187.7 crore, up from the prior-year period.
• Operating EBITDA Margin: Expanded by 118 basis points to 46%, aided by operational efficiencies and operating leverage.
• Net Profit (PAT): Increased 27% year-on-year to ₹94.6 crore.
• Average Daily Rate (ADR): Grew 30% year-on-year to ₹25,046.
• Revenue Per Available Room (RevPAR): Jumped 30% year-on-year to ₹17,225.

Operational Performance and Segment Growth

Growth during the quarter was broad-based across segments. Room revenue surged 39% year-on-year, while Food and Beverage (F&B) income rose 21%. Fees from Hotel Management Agreements (HMA) jumped 76%, reflecting an accelerating asset-light expansion model and broadening geographic footprint. Additionally, non-room revenue accounted for over 50% of total revenue during the first half of the financial year, underlining the group's revenue diversification.

Commenting on the results, Anuraag Bhatnagar, Whole-time Director and Chief Executive Officer of Leela Palaces Hotels & Resorts, stated that the 30% RevPAR growth was led by a record 30% increase in ADR, demonstrating strong pricing power and resilient demand for differentiated luxury offerings. He noted that suite occupancy increased by over 700 basis points, and high-profile international and government gatherings, such as the BRICS Summit in Delhi, contributed meaningfully to premium room occupancy.

Brokerage Views and Sector Outlook

Brokerage firm Jefferies highlighted that the quarter's expansion was entirely driven by average room rates (ARR), propelled by healthy domestic leisure trends and robust Meetings, Incentives, Conferences, and Exhibitions (MICE) activity. Analysts noted that with limited premium room supply additions entering major metropolitan cities and leisure hotspots, established luxury hotel operators continue to maintain commanding yields.

With the second half of the fiscal year traditionally representing the high season for Indian tourism, corporate conventions, and the winter wedding calendar, market participants expect luxury hotel operators to sustain strong operational momentum into the coming quarters.

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