Target Price Set at ₹605 for Schloss Bangalore Ltd (Leela)
Current Market Price (CMP): ₹438.50
Schloss Bangalore Ltd, operating under the renowned ‘The Leela’ brand, is a key player in the luxury hotel sector, recognized for its exceptional architectural designs and upscale hospitality services. The company’s ability to command superior average room rates (ARR) is attributed to its strong brand presence, cultivated over nearly 40 years.
The outlook for the luxury hospitality segment in India remains positive, with projections indicating that demand for luxury hotel rooms will grow at a compound annual growth rate (CAGR) of 10.6% from FY24 to FY28. In contrast, supply growth is expected to be more modest at 5.9% during the same timeframe.
Leela is pursuing an ambitious expansion strategy, aiming to increase its room inventory from 1,224 to 1,978 owned keys by FY30. Analysts anticipate a revenue and EBITDA growth rate of 17% to 18% CAGR over FY25 to FY28, supported by a 10% CAGR in ARR and a gradual rise in occupancy rates. The company is projected to generate a cumulative free cash flow to equity (FCFE) of approximately ₹1,800 crore from FY26 to FY30, which will facilitate its expansion initiatives, including a ₹2,000 crore investment for the Bandra-Kurla Complex (BKC) expansion.
The coverage of Schloss Bangalore Ltd is initiated with a “Buy” rating, reflecting a target price of ₹605, based on a valuation of 22 times the EBITDA projected for June 2027. This valuation represents a 24% discount compared to the target multiple of Indian Hotels.
Published on September 23, 2025
