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Choice raises The Leela target to Rs 720 from Rs 540 with a Buy rating as Q2FY27 RevPAR jumps 30%
Our read
The Leela's Q2FY27 RevPAR jump of 30% is partly a BRICS Summit one-off, so the ₹720 target depends on rates holding as event demand fades.
For operators
The Leela's Q2FY27 RevPAR rose 30% YoY to INR 17,225 on ARR up 30% to INR 25,046, helped by the BRICS Summit in Delhi, so operators should treat the event-led rate gains as partly one-off and benchmark against H1FY27 city-hotel RevPAR of INR 15,948 at 74% occupancy.
Watch
Delhi city-hotel ARR against Q2FY27's INR 25,046
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How do The Leela's results compare with its rivals?The report
The Leela's RevPAR reached INR 17,225 in Q2FY27 on a 30% rise in ARR to INR 25,046, helped by the BRICS Summit in Delhi. Choice Institutional Equities now applies 22.0x FY28E EV/Adj. EBITDA, against 18.0x earlier.
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Reported figures
From the report. Source details below
| H1FY27 city hotels RevPAR: | INR 15,948 |
|---|---|
| H1FY27 city hotels occupancy: | 74% |
Why it matters to operators and investors
Choice's target upgrade to Rs 720 from Rs 540 on 30% RevPAR growth signals a higher market valuation for premium hotel assets like The Leela, so corpDev teams benchmarking hospitality deals should expect richer pricing, with the event-driven quarter inflating the comparison.
What to watch next
- Q3FY27 RevPAR below Q2FY27's INR 17,225 in the next results would mean the BRICS Summit lift was one-off and caps upside to the ₹720 target.
- Resort RevPAR growth against the 18% in H1FY27
- City-hotel occupancy against the 74% H1FY27 level
- Management commentary on winter wedding and corporate event bookings
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- The Leela is likely to keep pushing average room rates in Delhi and other city hotels rather than chasing occupancy, now that H1FY27 city occupancy is already 74%.
- Other brokerages may follow Choice in raising targets on The Leela if Q3FY27 numbers confirm the RevPAR trend, though some are likely to flag the BRICS Summit as non-recurring.
- Rival luxury chains may price Delhi rooms more aggressively for the winter event and wedding season to take share from the Q2 rate gains.
- The Leela's management is likely to credit the rise partly to the BRICS Summit while stressing that resort RevPAR growth of 18% shows demand beyond one event.
- Lenders are likely to stay comfortable with The Leela's credit profile while earnings grow at this pace, and may be open to refinancing on easier terms.
The source
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