The Leela Palaces Q2 Net Profit Rises 26.64% to ₹94.6 Crore as Revenue Jumps 32.9%

The Leela Palaces Hotels & Resorts reported a 26.64% year-on-year increase in consolidated net profit to ₹94.6 crore for the second quarter, exceeding market estimates of ₹79.2 crore as revenue growth continued to strengthen across its luxury hospitality business.

Revenue from operations rose 32.9% to ₹412 crore, compared with ₹310 crore in the corresponding quarter of the previous year. The company’s operating EBITDA increased 25% to ₹200 crore from ₹160 crore, although its operating margin declined during the period.

The results reflect continued demand for premium accommodation and hospitality services in India. However, the fall in operating margins indicates that higher revenue has also been accompanied by increased operating expenses.

The EBITDA margin contracted by 469 basis points to 47.05% from 51.74% a year earlier. Higher employee expenses, utilities and other operating costs, along with expenses associated with expanding the hotel portfolio, were identified as factors contributing to the decline.

Despite the margin pressure, the company’s net profit exceeded market expectations by ₹15.4 crore. Revenue increased by ₹102 crore from the year-ago quarter, highlighting the scale of growth recorded during the period.

India’s luxury hospitality market has benefited from domestic leisure travel, corporate travel and meetings, incentives, conferences and exhibitions (MICE). Demand for premium hotels, alongside the ability to command higher room rates at select properties, has supported revenue growth across the segment.

In the first quarter of Financial Year 2026–27, The Leela Palaces reported operating revenue of ₹352 crore, representing 28% year-on-year growth. Operating EBITDA increased 41%, while revenue per available room (RevPAR) grew 17%. Average daily rate (ADR) rose 10% to ₹20,722 during the quarter.

The latest results place the focus on whether revenue growth can translate into stronger profitability in the coming quarters. The upcoming wedding and holiday season could provide additional demand opportunities, although the impact on margins will depend on operating costs and the company’s ability to sustain room rates.

Employee expenses, utility costs and discretionary spending remain important factors to watch. A moderation in luxury travel demand or delays in the company’s expansion plans could also affect future performance.

For investors tracking India’s listed hospitality companies, the next quarter’s margin performance will be an important indicator of whether The Leela Palaces can maintain its revenue momentum while managing rising operating expenses.