The brokerage wrote in its note that Schloss Bangalore, which operates ‘The Leela’ brand, consistently delivers industry-leading hospitality margins and revenue per available room (RevPAR).
The brokerage believes the business has strong growth potential, especially if supported by timely launches of new hotels. Key drivers identified by JPMorgan include:- Sustained 40% average room rate (ARR) premium over the luxury industry from FY26 to FY28
– Over 70% occupancy for the company’s owned portfolio by FY27
– 10% like-for-like RevPAR compound annual growth rate (CAGR) from FY25 to FY28- Operating EBITDA margin exceeding 46% by FY26/FY27
JPMorgan also said that the stock’s valuation appears attractive at 19x FY27E EV/EBITDA.
This marks the third initiation coverage for Schloss Bangalore in the past two days. On Tuesday, BOFA Securities began coverage with a ‘Buy’ rating and a target price of ₹520 per share, while Morgan Stanley also initiated with an ‘Overweight’ rating and a target of ₹549 per share.
Schloss Bangalore made its stock market debut on June 2, listing at a nearly 7% discount to the issue price.
Founded on March 20, 2019, Schloss Bangalore is a luxury hospitality company that owns, operates, manages, and develops hotels and resorts in India under “The Leela” brand. The company focuses on offering premium accommodations and personalised services rooted in Indian hospitality.
As of May 2024, Schloss Bangalore operates 12 properties with 3,382 keys under The Leela Palaces, Hotels, and Resorts. Five of these, located in Bengaluru, Chennai, New Delhi, Jaipur, and Udaipur, are wholly owned.
Shares of Schloss Bangalore Ltd. were trading 1.18% lower at ₹422.75 on Wednesday.
