Hotel Leela Venture reported a 30% jump in revenue per available room (RevPAR) to INR 17,225 in Q2FY27, driven by strong luxury demand and wedding-season bookings. While city hotels achieved 74% occupancy, newer resort properties like Coorg are still in a ramp-up phase. The strong operational performance has led Choice Institutional Equities to revise its target price, though investors should continue to track the stability of occupancy across both city and resort segments.
Hotel Leela Venture has demonstrated strong operational results in the second quarter of the 2027 fiscal year. The company recorded a 30% year-on-year increase in revenue per available room (RevPAR), a primary measure of performance in the hotel industry, which reached INR 17,225. This growth was fueled by a corresponding 30% rise in average room rates, which touched INR 25,046. The company benefited significantly from the luxury segment and a surge in bookings for weddings and major events, particularly in hubs like Delhi.
City hotels served as the main drivers of this growth during the first half of the fiscal year. Occupancy levels in these city properties reached 74%, while RevPAR for this segment climbed 26% to INR 15,948. This suggests that the combination of business travel and city-based hospitality demand remains robust for the brand.
However, the company’s resort portfolio presents a more mixed picture. While resorts saw an 18% growth in RevPAR, the specific property in Coorg is currently in a ramp-up phase. New luxury properties often require time to reach full capacity, and this period of stabilization has created some pressure on the overall occupancy metrics for the resort segment. If the Coorg facility is excluded, the occupancy rates for the remaining resorts are tracking closer to 60%, reflecting a more stable performance in established locations.
Reflecting this operational momentum, Choice Institutional Equities has adjusted its outlook on the brand. The brokerage has assigned a Buy rating with a target price of INR 720. This revision is based on an updated valuation model that applies a 22.0x multiple to the company’s expected earnings (EV/Adjusted EBITDA), an increase from the previous 18.0x multiple. The brokerage also noted that a discounted cash flow analysis provides additional support for this valuation level.
For those monitoring the Indian hospitality sector, the next phase will depend on whether this occupancy momentum can be sustained through the second half of the fiscal year. Key monitorables include the strength of luxury travel demand during the festive season and the company’s progress in improving occupancy at newer assets like the Coorg property. Continued pricing power will also be a critical factor in maintaining these improved margins.