Please find enclosed the transcript of the Q1 FY26 Earnings Conference Call held on July 22, 2025
THELEELA · price
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In its first earnings call after the June 2025 IPO, Schloss Bangalore (The Leela) reported its strongest-ever Q1 with total income up 25% YoY to INR 301 crores and EBITDA jumping 63% to INR 128 crores, driving a 980 bps margin expansion to 42.5%. The company swung to a profit of INR 8.7 crores from a loss of INR 75 crores a year ago, helped by lower finance costs. Occupancy rose to 64%, ADR grew 13%, and RevPAR surged 20%, outpacing the luxury industry's 10% growth. The company sits on a strong balance sheet with just 0.3x net debt to EBITDA and a AA stable credit rating. Management unveiled a new BKC Mumbai hotel (250 keys, 50-50 JV with Brookfield), a 33-key Udaipur expansion on freshly acquired 1.8 acres, and new verticals like the ARQ private members club and Leela Luxury Residences.
Sharp margin expansion, a return to profitability, and a strong growth pipeline with FY30 EBITDA target of INR 2,000 crores are positive signals for shareholders. The stock should benefit from improved earnings visibility, but execution of the large expansion plan (725 owned keys + 203 managed keys) and rising leverage (guided up to ~2.5x net debt/EBITDA) are key things to watch.