Shares of Leela Palaces Hotels and Resorts Ltd. have an upside potential of over 24%, as per global investment banking firm Jefferies which raised its target price on the stock. The stock is holding on to gains of around 2%.
Both Nomura and Jefferies have maintained their respective “buy” recommendations on the stock and see an upside potential of up to 24.3% from Wednesday’s closing levels.
Jefferies has raised its target price to ₹735 from ₹675 previously.
The firm said the company’s second quarter growth was driven by a 30% revenue per available room growth, which was entirely led by the average room rate (ARR).
The business is supported by favourable domestic travel tailwinds and strong meetings, incentives, conferences and exhibitions (MICE) demand, Jefferies said.
The management of Leela Palaces has raised its guidance and it now expects high teens earnings before interest taxes depreciation and amortization (EBITDA) growth in the second half of the financial year 2027. This implies mid-20% EBITDA growth for FY27.
As a result, Jefferies has raised its EBITDA and Profit After Tax (PAT) estimates for Leela Palace Hotels by 3% and 7% respectively, seeing it as a high-quality luxury hospitality play. It expects the company’s revenue to grow at a Compounded Annual Growth Rate (CAGR) of 21% to 23% over financial year 2026-2029. EBITDA and PAT of the company are also projected to grow at a similar CAGR, the firm noted.
Meanwhile, Nomura has a target price of ₹650 per share on the stock. This implies an upside of 10% from its previous closing price.
Nomura has lifted its earnings per share (EPS) estimates for FY27 and FY28 by 3% and 5%, respectively.
All 21 analysts who have coverage on the stock have “buy” ratings.
Shares of Leela Palace Hotels are trading 2.5% higher on Thursday at ₹606. The stock has gained 40% over the last six months.
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