Leela Palaces Hotels & Resorts reported a strong Q2 FY27 with revenue of Rs 411.9 crore, up 33% YoY. PAT rose 27% to Rs 94.6 crore, bolstered by a 39% increase in room revenue and improved operating margins. The company significantly strengthened its balance sheet, reducing its net debt ratio to 1.4x and maintaining a positive growth outlook for H2 FY27.
The Leela Q2 Revenue Surges 33% to Rs 412 Crore
Revenue at Rs 411.9 crore; Net profit stands at Rs 94.6 crore.
Reader Takeaway: Strong operational leverage and debt reduction drive earnings, though project execution remains the critical monitorable factor.
What just happened
Leela Palaces Hotels & Resorts Ltd announced robust financial results for Q2 FY27. The company reported a 33% year-on-year revenue growth to Rs 411.9 crore. Operating EBITDA rose 36% to Rs 187.7 crore, with margins expanding by 118 basis points to 46%. Net profit grew by 27% to Rs 94.6 crore. Room revenue was the primary driver, climbing 39% to Rs 204.1 crore.
Why this matters
The results highlight the company's ability to maintain high pricing power within the luxury segment. A 30% increase in Average Daily Rates (ADR) helped push RevPAR (Revenue Per Available Room) up by 30%. Furthermore, aggressive debt reduction efforts—aided by proceeds from its IPO—have improved the balance sheet, with the Net Debt to LTM EBITDA ratio dropping sharply from 3.7x in March 2025 to 1.4x by September 2026.
Strategic Developments
The company is expanding its footprint with over 1,000 keys under development in high-growth locations like Ayodhya, Srinagar, and Ranthambore. The Mumbai BKC project, a 50:50 joint venture with Brookfield, is moving forward with plans to develop a 250-key hotel and 700,000 sq ft of office space. The firm intends to divest the office component to sharpen its focus on hotel operations, pending necessary regulatory and shareholder approvals.
Risks to watch
Success hinges on the timely execution of the development pipeline and the regulatory approval process for the BKC office space divestment. Additionally, renovation plans for the Dubai Palm Jumeirah property are scheduled for FY28, which may introduce short-term operational complexity.
What to track next
Management has provided guidance for mid-to-high teens EBITDA growth for the remainder of FY27. Investors should monitor occupancy trends as the company enters the seasonally stronger second half of the year, which historically contributes 65% of total business.