Leela Palaces Hotels & Resorts reported a consolidated net profit of ₹488 million for the quarter ended June 30, 2026 (Q1FY27), a 460% increase from ₹87.02 million in the prior year period. The strong bottom-line performance was driven by a 28% year-on-year rise in operating revenue to ₹3,520 million and a 41% surge in operating EBITDA to ₹1,434 million. This growth reflects robust domestic luxury demand and pricing power, with RevPAR increasing 17% to ₹13,982 despite temporary international travel headwinds.

The Board of Directors approved the unaudited standalone and consolidated financial results on July 31, 2026. The results were reviewed by B S R & Co. LLP, the statutory auditor, in compliance with Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Additionally, the Board approved an investment of up to ₹1,200 million in Schloss Tadoba Private Limited to fund a new wildlife resort project targeted for completion by calendar year 2030.

Q1FY27 Financial Performance

Operating EBITDA margin expanded to 41%, the highest-ever Q1 margin for the company, up 383 basis points from the previous year. While consolidated EBITDA was reported at ₹1,519.27 million in the financial statement, the press release highlighted operating EBITDA at ₹1,434 million, indicating a focus on core hospitality operations. Finance costs dropped significantly to ₹393.03 million from ₹860.13 million in Q1FY26, aiding profitability.

*Derived from reported growth percentages where absolute prior-year figures were not explicitly stated in the press release highlights.

Operational Highlights

Key operational metrics demonstrate strong performance across owned domestic hotels, including the newly launched Coorg property:

• ADR: Increased 10% year-on-year to ₹20,722.
• Occupancy: Improved by 3.9 percentage points to 67.5%.
• NPS: Achieved a score of 86, significantly ahead of the APAC luxury segment benchmark of 74.

The Leela brand was ranked #2 globally among the best hotel brands by Travel + Leisure World's Best Awards 2026, marking its fifth time in the top three since 2020. The company also expanded its ARQ by The Leela club presence in New Delhi and signed a concession agreement for a 30-key resort in Tadoba Tiger Reserve, Maharashtra.

What the Numbers Show

The divergence between consolidated EBITDA (₹1,519.27 million) and operating EBITDA (₹1,434 million) suggests non-operating items or specific accounting treatments affecting the top-line earnings quality. However, the primary driver of profit growth remains operational efficiency and pricing power, evidenced by the record 41% operating EBITDA margin. The significant reduction in finance costs further amplified net profit, but the core business health is best reflected in the 17% RevPAR growth and expanding margins, signaling sustained competitive advantage in the luxury segment.

Promoters of leela palaces hotels & resorts have created a direct pledge over 18,67,06,528 equity shares, representing 55.91% of the company's total share capital. The encumbrance was executed on June 24, 2026, under a pledge agreement with Catalyst Trusteeship Limited acting as the Onshore Security Agent. This move secures a term loan facility of US$ 500,000,000 (United States Dollars Five Hundred Million only), which the promoters are utilizing for payments or distributions to their investors, repayment of shareholder loans, and payment of transaction costs related to the facility.

The disclosure, filed on July 30, 2026, is a revised submission under Regulation 31(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("SEBI SAST Regulations"). It incorporates clarifications sought by BSE Limited via email dated July 20, 2026, regarding an initial disclosure made on July 01, 2026. The filing details the creation of encumbrance by seven promoter entities collectively referred to as the "Promoters," along with BSREP III India Ballet Holdings (DIFC) Limited as the holding company ("HoldCo").

The pledged shares are held across multiple promoter entities based in Dubai International Financial Centre (DIFC). Project Ballet Bangalore Holdings (DIFC) Pvt Ltd holds the largest portion, with 15,29,96,805 shares (45.81% of total capital) fully encumbered. Other promoters include BSREP III Tadoba Holdings (DIFC) Pvt Ltd, Project Ballet HMA Holdings (DIFC) Pvt Ltd, Project Ballet Chennai Holdings (DIFC) Pvt Ltd, BSREP III Joy Two Holdings (DIFC) Limited, Project Ballet Udaipur Holdings (DIFC) Pvt Ltd, and Project Ballet Gandhinagar Holdings (DIFC) Pvt Ltd.

The lenders under the Facility Agreement dated September 19, 2025, include Barclays Bank PLC, Deutsche Bank AG (Singapore Branch), Morgan Stanley Bank N.A., MUFG Bank Ltd (Singapore Branch), Nomura Singapore Limited, Standard Chartered Bank (Singapore) Limited, and Sumitomo Mitsui Banking Corporation (Singapore Branch). Deutsche Bank AG, Hong Kong Branch acts as the agent, while DB Trustees (Hong Kong) Limited serves as the Offshore Security Agent.

Encumbrance Context and Valuation

The value of the pledged shares was computed at INR 9,126,21,50,886.40 based on the closing price on BSE Limited as of June 24, 2026. Against the loan amount of US$ 500,000,000, this results in a security cover ratio of 1.93. The conversion rate used for convenience translation was US$ 1 = INR 94.6980 as on June 24, 2026.

This direct pledge supplements existing covenants in the nature of encumbrance agreed upon in September 2025. Prior to this pledge, encumbrances existed over the entire promoter shareholding due to these covenants. However, following the company's initial public offering, such covenant-based encumbrances continue only over 66,791,576 equity shares held by Project Ballet Bangalore Holdings (DIFC) Pvt Ltd, which form part of the 20% Minimum Promoter Contribution subject to a statutory lock-in period until June 2, 2028. The new pledge covers 73.67% of the promoters' total shareholding, leaving the overall encumbrance position unchanged but now evidenced by a direct pledge instrument.