Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Leela Palaces Hotels & Resorts Ltd (NSE: THELEELA) Q3 2026 Earnings Call dated Jan. 16, 2026
Corporate Participants:
Diwakar Pingle — Investor Relations
Anuraag Bhatnagar — Whole-time Director and Chief Executive Officer
Ravi Shankar — Head – Asset Management and Chief Financial Officer
Analysts:
Binay Singh — Analyst
Karan Khanna — Analyst
Murtuza Arsiwalla — Analyst
Abhay Khaitan — Analyst
Achal Kumar — Analyst
Sumit Kumar — Analyst
Deepak Saha — Analyst
Nikhil — Analyst
Sreetika Ray Mohapatra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings call of Leela Palaces Hotels and Resorts Limited formerly known as Schloss Bangalore Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing Star then zero on your touchstone phone. Please note that this call is being recorded.
I now hand the conference over to Mr. Diwakar Pingle from Ernest and Young IR. Thank you. And over to you.
Diwakar Pingle — Investor Relations
Thanks Ryan. Good evening everyone. Welcome to the Q3 results of Leela Palace’s Hotels and Resorts Limited India’s only pure play luxury hospitality company. The company has published its results and has uploaded the investor presentation on the exchanges earlier today and you can also find it on the company’s website. Before we start, a disclaimer. Some of the statements made in today’s earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipating.
These statements are based on management’s beliefs and assumptions made by information currently available to the management. Participants are cautioned not to place undue reliance on these forward looking statements while making the investment decisions. To answer your questions today and to take you through the story, we have the management participating with us today. In today’s conference call we have Mr. Anurag Bhatnagar, full time Director and CEO and Mr. Ravishankar, Head Asset Management and CFO.
Without further ado, I’d like to hand over the call to Mr. Bhatnagar. Thank you. Over to you Anurag.
Anuraag Bhatnagar — Whole-time Director and Chief Executive Officer
Thank you. Hello. Good evening everyone. Wish you all a very happy and prosperous 2026 and thank you for joining us for our third global earnings call for the quarter and nine months ended 31st December 2025. I’m joined today by our CFO and head of Asset Management Ravi Shankar. Let me begin with the highlights for the quarter. I am pleased to report our third quarter results. In this quarter we have continued our outperformance versus the luxury industry and delivered 20% year on year. Revpar growth and operating ebitda growth of 23% year on year driven by a strong 17% uplift in ADR.
This growth is enabled on the back of Leela brand’s unique positioning in the industry, proprietary sales and distribution network and ability to consistently attract high demand and price premium over competitors. Our room revenues grew by 20% anchored by higher contribution from retail and accelerated growth in website performance. Nearly 153% growth in revenue came from the website performance. Given our continued focus on food and beverage quality and experience, Our revenue grew 29% year on year driven by both restaurants and banqueting.
This performance was primarily fueled by a 17% growth in non resident footfalls across our restaurants. Further, our operating EBITDA margins during the quarter were at 52% which is one of the best in the industry. This was our best ever quarterly performance and the fifth consecutive quarter of double digit growth in both RevPAR and EBITDA. Driven by the strong performance in the first nine months of the financial year, we are well positioned to exceed our earlier guidance of mid to high teens ebitda growth for FY26 the luxury consumption story in India continues to play out strongly and Leela continues to outperform the luxury industry within the sector.
We have been consistently gaining market share in the luxury industry and for the period April to November 2025 our market share increased by 15 points and this quarter our Revpar premium year on year increased from 141 to 162. Underscoring our consistently superior performance against the India luxury market, we continue to maintain a premium of approximately 5,000 INR in RevPAR over the rest of luxury segment in India. This sustained leadership reinforces our strong market positioning and our ability to deliver superior value.
The Leela Revpa growth has consistently outperformed the India luxury segment growth by more than two times over the last three quarters. Our strategy is clear. We offer a holistic luxury ecosystem that drives total revenue premium across rooms, fme wellness and luxury experiences. As a case in point, during the quarter we comprehensively repositioned the Leela Palace Jaipur to attract more domestic and foreign leisure tourists. We have completely revamped and upgraded the FNB offerings at this point Property introducing the all new Aravali Dining Room as our signature all day dining Jamabar, our iconic and globally recognized signature specialty restaurant the Peacock Lounge, a day lounge that transitions into a Mediterranean dining experience by evening and the Amber Terrace, a rooftop bar overlooking the Arauri Hills.
Just as an anecdote, Jamawar has delivered 40% revenue growth since its relaunch in November 25 and we expect other restaurants to follow a similar trajectory. Beyond fnb, we are elevating the guest experience with the introduction of an exclusive kids club, a reimagined spa with bespoke wellness offerings under Ogersia, and the conversion of select villas into premium villas for multi generational travel. This transformation strengthens Jaipur’s positioning as a prime luxury destination and marks the completion of the commitment we had articulated at the time of our ipo.
Overall, on the back of these investments, our revpar in Jaipur grew by 27% in Q3FY26 highlighting the importance of our holistic luxury ecosystem for the luxury traveler. Similar to Jaipur, we continue to enhance our other properties and elevate guest experiences. Looking ahead, we reiterate our confidence in sustaining mid to high teen EBITDA growth over the next two three years driven by ADR and occupancy expansion, new FNB and SPA outlets, launch of our members only club ERC in three new cities and cost optimization initiatives.
In this quarter we have continued our progress on strategic capital efficient growth. We have closed the Dubai transaction and now own 25 equity percent equity stake in the asset with an upcoming management contract as a reminder. Our total equity investment including the upfront investment and the future CAPEX that we plan to do is USD 70 million. This is expected to be fully recovered in two to three years through sale of our brand new residences making this effectively an asset light investment.
Furthermore, the 25% equity stake and the HMA contract is expected to generate 180 crores in stabilized earnings. We are also pleased to announce that we have signed a management agreement for a marquee 80 key luxury hotel in Jaisalmer. This hotel is scheduled to become operational by end of this calendar year and will enhance our existing Rajasthan circuit. This brings us to three luxury hotels that we have added since IPO Mumbai, bkc, Dubai and Jaisalmer. These luxury hotels will contribute to nearly 340 crores of stabilized earnings on an attributable basis with a net capital outlay of only 1650 crores making this extremely accretive.
Overall, our expansion strategy remains firmly on track supported by a pipeline of nine luxury hotels at this point in time totaling over 1,000 quays and we continue to evaluate opportunities that further complement our portfolio over the long term. We reaffirm our EBITDA target of Rupees 2000 crore by FY30 through a combination of same store growth and expansion. Before we dive into the operating performance, I would like to touch upon the overall macroeconomic trends. Macro Trends India’s luxury segment is entering a multi decade growth phase and Leela’s exclusive focus on pure luxury positions us uniquely to capitalize on these dynamics and sustain a clear competitive advantage.
The demand supply fundamentals are extremely attractive. The funnel of customers for luxury consumption in India continues to expand on the back of strong economic growth in the country. The international travel demand remains a potential upside for the luxury sector. While the demand for luxury is growing at double digits, the supply in our micro markets remains muted allowing lira to capture outside market share presenting a strong Runway for both occupancies and rates to increase resulting in both near term and long term sales.
Same store growth on the back of this context, now let’s dive into our operating performance. Dalila continues to be the preferred luxury brand underpinned by our commitment to excellence, our services which is reflected in our industry leading Voice of guest NPS score of 86 this quarter. Our brand strength was further reinforced as several of our hotels were the first choice of high profile weddings and global and marquee events reaffirming our leadership in luxury hospitality. For the nine months FY26 RevPAR has increased by 18% year on year to 15,626 supported by a 13% growth in ADR and 3 percentage points improvement in occupancy to 68% highlighting resilient luxury demand and and a premium pricing power growth remains broad based with both city and resort portfolios delivering Strong double digit RevPAR growth in third quarter FY26 as well as for the nine months of FY26, the Leela’s commitment to excellence was reaffirmed through multiple global recognitions.
The Leela Palace Udaipur is recognized as the Best in India by Rob Report Hong Kong Best of the Best 2026 Travel Michelin keys were awarded to three of our palaces in New Delhi, Jaipur and Chennai. Outstanding recognition in Konde Nas Travelers Readers Choice Awards with 40% of our portfolio featured including our hotels in Kovalam, Udaipur, Jaipur, Chennai and New Delhi. Our strong operational and financial performance is underpinned by a highly engaged talent base and industry leading development initiatives which have earned us Great Places to Work recognition this quarter with an 88% response rate while continuing to strengthen organizational capability and support an 82% retention rate for nine months, FY26 ESG remains an integral focus to our strategy today.
65% of our energy consumption comes from green sources. Importantly, this transition is also delivering financial Benefits with our Q3 financial year power cost down 3% year on year and improved long term operating efficiency during the year. We upcycled 2.2 metric tons of flour waste and source 48% of our tea consumption from carbon neutral estates reinforcing our commitment to responsible luxury. I will now hand over the call to Ravi Shankar, our CFO and Head of Asset Management to take you through the Financial highlights for the quarter and the nine months ended 31st December 2025.
Ravi Shankar — Head – Asset Management and Chief Financial Officer
Thank you Anurag. Good evening everyone. First, starting with the quarterly performance, Q3FY26 once again underscored the strength, efficiency and scalability of the Leela platform, combining strong top line growth with disciplined capital management and a sharp focus on returns. In line with our strong REVPAR growth, operating revenues increased by 21% yoy to Rs 457 crore while operating EBITDA rose to 23% yoyo to rupees 238 crores resulting in the best in class EBITDA margin of 52% and improvement of 61bps.
Room revenue continued to deliver double digit yoy growth driven by 18% increase in the retail segment and a robust 45% growth in the group segment. PAC increased from 56 crores in Q3FY25 to rupees 148 crores driven mainly by EBITDA expansion and a reduction of finance cost, making our fifth consecutive quarter of positive pattern. Turning to nine month performance, we delivered strong growth with operating revenues increasing 16% YoY to 1043 crores. Operating EBITDA rose 22% YoY to 477 crores. EBITDA margin expanded by 231 basis point to 46% with over 60% of incremental revenue converting to EBITDA reflecting robust operating leverage and disciplined cost management.
In terms of financing during the period, we further renegotiated our term loan with our bankers bringing down the interest rate from 9.1% to 8.25%. This allows us to benefit from the softer interest rate environment, lowering our body core and enhancing the fat while maintaining a strong balance sheet with ample headroom to fund future growth. Before ending, Anurag and I would like to express our gratitude to our incredible team of associates for their commitment to excellence, hard work and the constant endeavor to delight all our guests.
Further details on our third quarter results can be found in our earning release we issued earlier today. We can now open the floor for questions.
Questions and Answers:
Operator
Thank you ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Bin air from Morgan Stanley. Please Go ahead.
Binay Singh
Hi team. Congratulations for another strong quarter. I have two questions. First is on the demand side, if you could comment a little bit about demand trends that you are seeing. Because some of the data that we see at the city level is of a little bit mixed. Like Mumbai has been showing weakness. Whereas markets like Delhi, Bangalore and all are quite strong. So could you comment a little bit about that? What are the trends that you’re seeing across cities?
Anuraag Bhatnagar
Thanks Vinay. From our perspective and the basis on the data that we have, we see the continuation of high double digit growth demand across all the segments and across all the cities, both in city hotels as well as leisure destinations. I mean if you take a step back and look at what’s happening in India, if you look at the macroeconomic indicators, the growth in gdp, the economic value, the number of households that are coming into luxury consumption and the total addressable market and the growth of the upper funnel in terms of luxury consumption.
We are at the beginning of a multi year, multi decadable demand growth in India and we have not seen this impact across any of our hotels. If you look at our city hotels, the demand is growing in high double digits. The funnel for our resort destinations are also very high. So we have not seen that being impacted anywhere especially on the luxury side. As we have always maintained, luxury consumption is relatively inelastic versus other sectors and other segments and we expect this trend to continue.
Binay Singh
Thanks for that. Typically for you, March quarter tends to be the strongest. Right? We see a sizeable jump in the past between December occupancy to March. So the similar trends are continuing for you.
Anuraag Bhatnagar
Absolutely, absolutely. And if you see every quarter on quarter we have been growing in high double digits when it comes to revpar growth led by both our ADR as well as occupancy growth which shows that the demand is spread and across all cities.
Ravi Shankar
Vinay, just to add, we are looking for a double digit growth at least in the area and that far in the quarter one of this year.
Binay Singh
Thanks. And secondly when I look at FNB revenues and management fees, FNB has accelerated from mid teens to almost 29% growth this quarter. Management fees has been around 7%. Could you talk a little bit about what’s happening over there and especially the FNB bit. Is this a sustainable run rate? Was there any one off that is driving this high growth in December quarter?
Ravi Shankar
Two part one is on the HME HMA. Actually our HMA fees have grown Y17%. We had some one off adjustment in last quarter same time. As a result we got a 7% increase. There was a huge banqueting event we had done for the Amani wedding. That revenue including that adjustment we would be around a 17% Yui increase on the HMA fees. Our all managed hotels also did a double digit ADR RevPAR growth
Anuraag Bhatnagar
And on. FNB Vinay, we have opened two new restaurants in this quarter which will further give us results across the next 12 months and forward as well. We opened two new two new restaurants in Jaipur. The Amber Terrace, the rooftop restaurant that I was alluding to earlier and the Peacock Lounge. And I also want to remind you that the restaurants that we repurposed and renovated in the previous quarters stabilized in this quarter. For instance, the La Cirque in New Delhi has shown a 40% growth in revenue year on year.
The Cube which was a three meal atelier in the Leela Palace New Delhi has seen a 27% growth. And Jamawar that I mentioned, a new restaurant in Leela Palace Jaipur has seen a 40% growth. FNB is a big part of our focus and our commitment to excellence in terms of creating value and offering and experiences for our customers and we expect these trends to continue going forward into the few years.
Binay Singh
Thanks team. I’ll come back in the queue.
Operator
Thank you. We take the next question from the line of Kalan Khanna from Ambit Capital. Please go ahead.
Karan Khanna
Hi Anurag. Hi Ravi. Thanks for the opportunity and congrats on a very strong quarter. My first question to you Anurag. 20% RevPAR growth in the quarter seems very strong given that the industry faced some headwinds in December. Two things, one, what were the numbers for October and November combined versus December and secondly with Reserve seeing nearly 30% viable notes, how much of this can be attributed to one of mice activities that you had witnessed during the quarter?
Anuraag Bhatnagar
Thank you Karan. I think as I mentioned earlier the growth has come across both city hotels as well as resorts. We have seen why in the resorts that this is typically the season of celebrations and high profile events and marquee events. So there has been an upside both in terms of as I mentioned, certain global events that have happened in Jaipur and in Udaipura and we have seen this subsidy in resorts. But we have seen the similar high double digit growth in our city hotels as well. And the ADR like this is a season of extremely high demand and Leela being on our focus on revenue and asset management, our dynamic pricing, our focus on quality and assurance as well as service delivery allows us the wherewithal to be able to yield higher and Optimize on this high demand in this particular season.
Ravi Shankar
And Karan, just to give you a specific number our city hotels also have done almost 17% you know RevPAR growth, you know which is included in the 20%. Even if you look at nine months our repar 16% so it shows our slated growth for our city and resort hotels.
Karan Khanna
Sure. And then Ravi just number on October, November combined Raptor versus what you feel in the summer number.
Ravi Shankar
So October number if we combine then we will do almost a 21% growth on ADR and 24% growth on RA
Karan Khanna
And occupancy will go
Ravi Shankar
By 1.6%.
Karan Khanna
Sure. Second question for the BKC property in Slide 13 of the of the presentation I was doing some math around the numbers. Is it safe to assume that European sitting in total stabilized revenues of around 480 odd crores at 32,000 errors and 80% occupancy. And firstly by when do you plan to achieve this number? And secondly do you see any risk relatively high er expectation for this property?
Ravi Shankar
So I’ll tell you Karan, first we are on track on this property. We already are paying lease premium on time and design is already in progress. The numbers that we are seeing this will be the second stabilized year that number speaking on we will be able to achieve in our second stabilized year. The occupancy of 80%
Anuraag Bhatnagar
And we don’t see any risk Karan, because as we mentioned earlier, I mean this market is so grossly underserved in terms of luxury supply and in terms of the inventory coming in. The last supply that came in this micro market was in 2011. It’s been nearly 15 years since there was a supply in this market. So we’re actually quite excitedly awaiting the opening of this hotel and there’s no risk of or any, I mean any such thing that he’s foreseeing the future.
Karan Khanna
Sure. Next question. We’ve seen about two large private equity deals happening in the past couple of weeks in the hospitality sector. From your perspective, can you talk about the acquisition landscape and if you’re seeing any large acquisition opportunities that may be nearing completion and if yes is there a debt gap that you would not close? Especially given that the by acquisitions that are suitable to me now.
Anuraag Bhatnagar
Sorry Karan, a I couldn’t hear you very clearly but what I could make out of it, I mean look I can’t really comment on the strategy and the business objectives of the other organizations. As far as LE is concerned we are pure focused on luxury. We are very, very strategic about our business Growth and development. We are always seeking opportunities that are value accretive and create shareholder and stakeholder value and create a net network impact on the luxury side for our hotels. As we have seen a hugely accretive opportunity that we capitalized on in terms of Dubai and in BKC and we continue on the same path.
If you see every quarter we have added keys. I mean we started in FY25 with 3500 keys. We added 250 keys in BKC acquisition in first quarter of FY26. We added 546 key keys of Dubai in second quarter of FY26 and 80 keys of Jaisalmer in the third quarter. And this is at this point in time, this is like I mentioned earlier, we have a strong pipeline and lots of discussions that we are actively engaged in and very much on track for the 2000 crore EBITDA that we have given as a guidance for FY30.
Operator
Thank you. We take the next question from the line of Murtaza Arcivala from Kotak. Please go ahead.
Murtuza Arsiwalla
Yeah. Hi sir. Congratulations on fantastic numbers. Just one question on the reported numbers. Anything that we should read as maybe non recurring or excessive. And the other expenses this quarter, they seem to be higher and you know we could have had an even higher margin profile but or this larger other expense. So anything on the expense side that needs to be called up and the second is on Dubai. As we understand now you’ve taken over the hotel. How should we think in terms of the milestones, in terms of converting the brand to a Leela brand?
When do the management fees start sort of coming on board and how should we think about the timelines in terms of the Vida sale etc. Just the, the roadmap to how that entire transition for the Dubai hotel would happen. So clarity on that.
Anuraag Bhatnagar
So perhaps I can comment on the Dubai and Ravi will give you some more specifications on the financials that you brought up. Dubai, we closed the transaction on 26th of November. So the current operator will be managing the hotel till 26th of December or so for this year for sea within this year we have a planned upgrade and a rebanding which is planned in 2027 and we start operating the hotel from 2027. And we should be rebranding very much on track of rebranding the hotel as the Leela in 2028 and we start earning management fees.
It’s a large asset if I was to remind you, over 23 acres with four zones. So we’ll be very efficient about our upgrading and.
Murtuza Arsiwalla
So and all of these you when you say the Leela Brand in 28, I’m assuming your token calendar year 28.
Anuraag Bhatnagar
That’s right.
Murtuza Arsiwalla
And in terms of the villa sale, would that happen anytime earlier or how should we think of that?
Anuraag Bhatnagar
The progress on that is already initiated and I would say that this will happen over the next two or three years.
Ravi Shankar
And mohs on the other expenses. Yes, there were some onetime expense in this quarter. But if you look at the entire nine months quarter, we had an upload of more than 60% and a very healthy profit. In spite of having those one time expenses, we had a 52% EBITDA margin which is still healthy and we were able to have a margin expansion as well.
Murtuza Arsiwalla
Would you want to quantify the one time in this quarter
Ravi Shankar
If I remove. There were 5, 6 crores. If I remove the 6, 7 crores will be almost 26% expense.
Murtuza Arsiwalla
Thank you.
Operator
Thank you. We take the next question from the line of Abhay Kaitan from Access Capital. Please go ahead.
Abhay Khaitan
Yeah, hi. Thank you for the opportunity and again congrats on good set of numbers. My question is again on the on the demand side. So I know you in the presentation you have given out growth by retail and groups. But within that if you can help me bifurcate for the city hotels how much of the growth has come from the leisure side and how much of the growth has come from the corporate side. Just some color on that would be really helpful.
Anuraag Bhatnagar
The city hotels, just to remind you that we have grown by 17%. And if I talk about specific segments, our city hotels are between 60 to 70% of the business is from the corporate side and that’s a significant number. And within the segments we have seen individual corporate travel increase. Everything has grown by double digits, high double digits. We have seen the corporate mice increase and we have also seen the growth in terms of events. So it’s a very broad based growth. For instance, our retail segment has grown by 18%.
Our group segments have grown overall by 45% and are direct we which is a brand.com which is the most efficient. And that shows the pull factor of the Leela brand has grown by 153%.
Abhay Khaitan
Got it. This is really helpful. And my second question is on the Jaisalmer property which is under the managed contact. So when can we expect the fees. To start coming in and how much is the expected quantum in FY27 and months on stabilization.
Anuraag Bhatnagar
So the hotel is undergoing an extensive pip. Although it’s a ready to kind of ready built hotel across 30 acres of land and beautifully positioned. But we are enhancing the product along with the ownership to make it an absolute luxury. Leela, and complete our Rajasthan circuit and strengthen it further. We are expecting the work to be completed by the season end of this year. And the fees on stabilizer, we are expecting a close to, you know, I mean if you look at a trend, we’re looking at close to 6 odd crores of fees in a stabilized deal.
Abhay Khaitan
Thank you, this is very helpful. I’ll get back.
Operator
Thank you. We take the next question from the line of Achal Kumar from hsbc. Please go ahead.
Achal Kumar
Yeah, hi, thanks for taking my question. First of all, on your balance sheet. So basically just wanted to understand about, you know, where are you in terms of comfort level? So now you said Jaisalmer and looks like it’s going to be on the management contract. Had there been an option, would you have preferred to buy it? And on that, I mean, you know, in just extending that, I mean what kind of growth we we can see in terms of owned properties, are you still comfortable? If you’re getting the opportunity, would you prefer to buy it?
Would your balance sheet allow you to do that? So if you could give a bit of a color on that, please.
Ravi Shankar
If you had an opportunity to buy Jaisalmer, you could have put equity. But it was the HMA contract, owner had enough funds and they already constructed the property. I would give an entire halo effect to our brand with the Netflix impact in the Rajasthan hotel. So even with the HMA contract, But if there are good deals available, which we are evaluating, which has good return metrics, yield on cost and roe as per our benchmark, then we would be keen to invest with high roast. If the deal justifies that economics.
Achal Kumar
Just to confirm, I guess you confirmed previously that you are looking at some of the markets like Goa and all. Are you still looking at it? Are you still looking to buy some properties out there?
Ravi Shankar
Yes, we are still evaluating deals in the key city and resort hotels.
Achal Kumar
Okay, fair enough, thanks. My second question was on the demand again. So Basically on slide 37 you mentioned that there is a huge gap between the demand and supply, which definitely points to the very healthy equation. But I. How, I mean, how confident are you that despite the fact that demand supply equation sits in your favor, you could still continue to increase your ARR? I mean, you know, looking at your arrs, your Resort and City ARR, 38,000 and so all that, don’t you think it’s a very high ARR?
I mean, are you, are you really confident that you can increase your continue to increase your ar this despite that demand supply, balance.
Anuraag Bhatnagar
So I’ll break it in two points and thank you for this question. I was kind of hoping somebody would ask us that. Firstly, in the hotels in the cities where we are located, there is no real demand actually coming in our micro market in most of the locations where we are located. That’s point one. The iconic nature of our hotels, the build quality of our assets and the market dominance that we have gives us a huge competitive advantage as we have seen, as you mentioned yourself, to be able to command a pricing power.
All the tailwinds are there to grow demand across all segments. And we have seen that year, on year, quarter on quarter across all segments. From 70 million households which could have consumed luxury in 2019, estimates are that there are going to be more than 200 million households by FY30 in India that can consume luxury. And India as a country today on the luxury side is severely and grossly underserved and under penetrated with less than 29,000 keys on the luxury side. So there is definitely a big cagr, a big delta between demand and supply.
Demand is expected to grow at a macro level between 11 to 14% and the supply is in middle and low single digits. So that’s point number one. Secondly, our brand and product, which is backed by incredible service which you have seen from a high net promoter score, allows us to create that experience that allows us to charge up higher rates because of the overall value proposition that we offer to all our guests. The holistic luxury ecosystem that we have refined and fine tuned over the years enables us to charge that premium.
And we have seen that across not just this season and this quarter, but even the previous quarters as well. And the third data point I would like to bring to your attention. The event that impacted the sector, I would say in the last nine months, whether it was operations in dur, whether it was that airlines that happened with a particular airline did not impact Leela. And Leela as a segment and as a brand has been resilient to all of these. So that kind of reinforces our thesis that luxury is relatively inelastic compared to other segments in the sector.
It reflects the size of the luxury consumer.
Achal Kumar
Okay, perfect, thanks. And my final question was about the first quarter. You know, so although your full year guidance points to how you’re thinking about the Q4, just want to understand because the Q4 we will have sort of on the, on the headwind side probably, you know, you had last year, you had Mahakum and all. And so the demand was strong. Of course you don’t, you’re not present in those, some of the low cities but of course you know, overall demand was strong. But then on the, on the, on the other side you have sort of, you know, the T20 World cup and AI conference in Delhi and all.
So on the balance how do you see, you know, the quarter Q4? I mean do you see exceptionally strong because of these or do you see because of headwinds? Probably we could see some balance growth. How do you see the Q4?
Ravi Shankar
Q4 also will have a great quarter, you know Jan to March and if I tell you we’ll be looking at a double digit growth on both ADL and RevPAR side.
Achal Kumar
Okay, okay, fair enough. Okay fine, fair enough. I think that’s, that’s it for my side.
Anuraag Bhatnagar
And typically historically if you look at the trends, Q4 is even stronger in absolutes than Q3. Yeah.
Achal Kumar
If
Anuraag Bhatnagar
You look at, you know, as a cycle as well.
Achal Kumar
Yeah, absolutely perfect. Thank you so much.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and 1. We take the next question from the line of Sumit Kumar from JM Financial. Please go ahead.
Sumit Kumar
Hi, good evening. Anurag and Ravi. Congratulations on a very good quarter. My first question relates to you know, the growth investments. There was a sort of capital outlay for certain asset management initiatives outlined in the RHP that was roughly about 450 odd crores which includes, you know, expansion of certain rooms, upgradation of amenities and some solar parks. So what is the status on that? 430crores if that’s being spent and how much of that is still remaining. And the second is if you can give an update on the construction status of your five assets excluding Dubai and bkc, the ones that are coming up elsewhere in Ayodhyas and so on, so forth.
Ravi Shankar
Thanks Sumit. Thanks for the question. So the capex that we are dealing in, the prospectus for our value drivers that already been invested, majority of it. If you see a lot of our value drivers are already operational. Dark in Bangalore is already operational. Delhi is getting operational in March, Chennai will get operational. Nothing. So most of the capacity has already been invested that new restaurants in Jaipur has come in operation. Delhi we have the conservative which is coming in the next quarter plus the new rooms, the five rooms at Jaipur are already operational.
Spa in Jaipur is operational. So almost all the capex has been spent and almost 10% is remaining that will spend in this quarter. Sumit.
Sumit Kumar
Okay and on the construction update for those five assets,
Ravi Shankar
All the five, the. Good part and the good news is that we have got approvals for all the five hotels and we have already started the construction for each one of the hotel. The most difficult approval was Agra because the hotel was near to ta. That approval also we have received in November and the construction has started. So all five hotels construction is already in.
Sumit Kumar
Okay. And the second question on Leela arc, how much have you collected in these, you know say in the last quarter for the club business. And is there any revenue contribution coming in 3Q from that?
Ravi Shankar
So we have already launched Bangalore Rebel Soft launch first January only. We’ll start generating revenues from Leela Bangalore, our club. We have already signed a good number of members because it’s only invite only. We are not trying to reach and sign every member. So very selective list of members are being enrolled into. Once we have Delhi and Chennai then it will be more of a networking pad where you can enroll more members to give services on all India basis rather on a one club basis.
Sumit Kumar
Okay, cool. Thank you. That’s helpful. Thank you and all the best.
Operator
Thank you. We take the next question from the line of Deepak Saha from Nirmal Bank Institutional Equities. Please go ahead.
Deepak Saha
Hi, thanks for the opportunity and congrats on great set of numbers. So my first question is on the HNB side, if you can highlight how much of this 29% growth would be driven by high profile events and just trying to understand how much would be sustainable going ahead.
Anuraag Bhatnagar
Sorry, come again, can you just repeat the question please?
Deepak Saha
I’m asking for the fnd growth of 29% that we have seen for the quarter. How much of that would be driven by high profile events that we had for the quarter. And basically trying to understand whether this kind of a growth rate sticks out for the coming quarters, especially SECU for so just on the sustainability of the. Attendee side,
Anuraag Bhatnagar
Nearly 70% of the growth has come at a run rate and even the events happen every year for the Leela every year in season, in peak season we have either global delegations coming in or heads of state visits or some big marquee events or a wedding celebration. So I won’t say there’s any specific delta that has been created. This particular quarter actually run rate business as usual for us. But to your specific question, nearly 70 75% of this alpha has been created through our restaurants, lounges and bars and the balances come from events and banqueting and the new restaurant that I mentioned to you.
But you know, the impact of the new restaurant has been basically just for one year. So the next whole year and the next future you will see the impact of the new restaurant that we have launched.
Ravi Shankar
And just to add, you know, this will give us a recurring increase in IFNB revenues because we are enabled to increase our APCs by almost 12% in. This quarter and
Anuraag Bhatnagar
17% growth in our footfall
Ravi Shankar
For
Anuraag Bhatnagar
Non resident guests.
Deepak Saha
Got it. That’s helpful. And Ravi, if you can just little bit help us understand what’s the gross debt position. Is there any difference compared to where we were in H1FY26 and where we are currently?
Ravi Shankar
If I tell you on the debt position we are right now at 1400 crores of gross debt and cash. We have around 6 to 700 crores of cash sitting with us. So that’s the gross in the debt position. We have used around 400 crores to pay for the Dubai acquisition.
Deepak Saha
Got it. That’s helpful. And coming to the pipeline of owned assets excluding bkc, I mean that’s an extension to the previous question. Anything if you could pinpoint out of this Srinagar, Agra, Ranthambore, Vandover and Ayodhya which one likely to come early FY28 says first half and which one say second half. Anything that you can share?
Anuraag Bhatnagar
I think if you were to structure the opening of these hotels, Srinagar is more advanced today than Agra. We have already, you know, because it’s already kind of a brown feed work for us. The demolition work is executed, the design approvals have been received. Our property management teams are on site. Agra we have broken ground. So we expect Srinagar to come in first. And also Bandhavgarh we believe will also come in very early in FY28 because Bandhavgarh the number of villas and the tents that we are putting out on the luxury side would also come in earlier.
The the Mumbai, the Waterstone, the Leela luxury residences. We are expecting that to come towards the end of this calendar year for CY26. Jaisalmer I have already spoken about. So I can see that even in FY28 all our assets are spread in such a way so that we can open hot and in Leela our turnaround time. And given the fact that we have most majority of these hotels are owned by us, we have the advantage and the opportunity to put up a preopening team sales distribution which actually saves us six odd months in terms of ramp up time of these hotels.
Deepak Saha
Got it. Last question from my end a little bit On a longer term basis, given the entire industry is seeing such heavy pipeline from current retention and sourcing point of view, do you see any chance challenge? What’s your view? Given such a strong pipeline is there for us, for the industry, what’s your view on talent sourcing?
Anuraag Bhatnagar
On talent sourcing? I think talent has been a very big focus for us and continues to be so. Like I have always said that we have institutionalized both our talent retention, upskilling and development to ensure that we always have the best talent serving serving our guests. And that is reflected in two data points. One is our highest net promoter score, which is 86, which is not just the highest in India, but also amongst the highest in Asia Pacific. Second is our retention rate of 82. This is what we focus on and we are looking forward.
And this year we have also been ascribed as the great places of work. So talent remains a very open and very strong focus for us. And we are having this talent across all cohorts of our service excellence. And we will be announcing very soon our focus in terms of further institutionalizing what we want to do with our talent.
Deepak Saha
Sir, I get it. What I was trying to understand, are we seeing any challenge as far as the sourcing part is concerned?
Anuraag Bhatnagar
Not really. I mean we recently launched our fourth batch of our management trainee Leela Leadership development program. For 35 positions that we have in the company, we have received more than 1350 applicants, eligible applicants and qualified applicants. So there. And we see that across every position that comes up wise, there’s a lot of focus in terms of developing talent from within. But when we need to source talents, and right now we have three likely openings going forward into the next year.
And we are seeing a very active demand coming in in terms of talent acquisition, supply. Actually.
Operator
Thank you. We take the next question from the line of Nikhil from Kizuna Wealth. Please go ahead.
Nikhil
Yes. Thank you for giving me the opportunity and congratulations on a great set of numbers. My first question is like first table hotel, what is our targeted occupancy over there?
Ravi Shankar
I mean which for 10 for
Nikhil
A. Stable hotel, like in our stable city hotel, the Stable Leisure Hotel, what is the targeted occupancy that we target?
Ravi Shankar
So in a city hotel, depends on the location. Your airport hotel or a CBD, generally you tend to do 75 to 78% occupancy. In a stabilized year, resort should be on the right location. You do around 65% occupancy.
Nikhil
Okay, sir, so that’s great to you. And sir, on the ADR front, I would ask like we have seen a good growth in adr, so can we assume that going forward with the luxury demand thesis in play, so can we assume that we are going to have a double digit EDR growth? Is it going to be likely on the lower teens or mid teens.
Ravi Shankar
With. The assets and the service culture, the NPS scores that we have, the distribution system, we do target a 9 to 10% of ADR growth year on year. That’s our target.
Nikhil
That’s really great to hear. That’s it from myself. Thank you and all the very best.
Operator
Thank you. We take the next question from the line of Sritika Ray Mohapatra from JP Morgan. Please go ahead.
Sreetika Ray Mohapatra
Thank you for the opportunity and congratulations to the team on a very good set of numbers. My question is regarding your strategy around building the circuits and micro clusters that you have managed to build. I think you highlighted that well in your presentation as well. Where you now have a very clear set of hotels across Delhi, Jaipur, Udaipur and now Jaisalmer also coming in. Are there any such opportunities that you are currently seeing around your existing portfolio? Any particular region that may potentially emerge as such circuits or clusters in future?
Anuraag Bhatnagar
Thank you for this question. And you’re absolutely right. The way we have seen travel trends, especially from international travelers coming into India, we have seen the average length of stay between 8 to 10 nights at the Leela hotels. So hence the circuits and the clusters that you have talked about work very well. The Leela Palace Trail, an itinerary based program and an experience program program that we had launched in 2023 has been extremely popular in our international markets and that allows the guests to stay across three Leela hotels over a span of between seven to 10 days.
So we have and we are strengthening the circuit with the inclusion of Leela Palace Agra which is there in our pipeline. Likewise, we have a Leela Palace Trail for the south of India given a spread and portfolio across Bangalore, Chennai, Hyderabad, Kovalam and Ashtamudi. We definitely expect that with our properties coming up in Jaisalmer, this Rajasthan circuit to get further strengthened plus the new foray of luxury experiences. The wildlife. The wildlife segment attracts a completely different clientele who would travel only to experience our wildlife destinations.
With both Bandavgarh and Ranthambore getting added on to our portfolio, we definitely expect this segment to grow. So we are growing on heritage between Agra and Ayodhya. We are focusing on wildlife and all of this present opportunities of building a circuit.
Sreetika Ray Mohapatra
Got it. Thank you. Also just since you mentioned the international traveler you know, visit being structured across a longer period through your hotels and your, you know, in house program as well. Are you seeing any changes or improvement to the ft, the international visitor mix in your portfolio? Are there any early signs? Because we are still seeing a lag in the and a weakness in the fda, you know, numbers that are reported. Of course we get these numbers with the lag. But are you seeing any material changes or any significant pickup when it comes to your portfolio hotels?
Anuraag Bhatnagar
So business hotels are in line with what they were earlier. So to give you an example, nearly 70% of our business mix in Neela Palace Bengaluru is from international markets in Chennai, 65% in Neela Palace New Delhi. But on the leisure hotels we have not seen the typical seasonal uptake that would have happened from international markets. And we all know the reasons. But that being said, the domestic has grown phenomenally to take care of that requirement. Overall as a mix at the H1 year mark we were at a 5050 mix of international and domestic business.
And in quarter three, what we have seen is the international mix is close to 51% or 52%. So marginal shift. But you are absolutely right. We really expect that this international business presents an opportunity and Leela is best placed given our global recognition, the award that we have won at a global platform and historically our propensity to do this kind of luxury business. We are very well placed to capture this demand as and when it represents.
Sreetika Ray Mohapatra
Thanks Anurag. Just one final question from my side. You of course the Sofitel Dubai acquisition has been an international foray for you. But any other geographies which are under consideration or maybe at advanced stages that could potentially come up in the next, in the coming to fiscal years?
Anuraag Bhatnagar
You know very well that we cannot say that right now, but thank you. And look, we are actively, almost all good opportunities they come to us. India is so grossly under penetrated when it comes to luxury focus. And our performance is also giving a lot of confidence to our counterparties. And we are working on several expressions of interest as we speak. And hopefully going forward in the future quarters, we’ll be letting you know India remains a very big focus for us because there are several opportunities that we are evaluating as we speak.
Sreetika Ray Mohapatra
Okay, thank you so much. That’s all from my side.
Operator
Thank you. We take the next question from the line of Achal Kumar from hsbc. Please go ahead.
Achal Kumar
Hi, thanks. Sorry, my question was only answered but since I’ve been given the opportunity, I just want to check. So you mentioned that you’ve gained 15 points market share on that point. What is your current market share, if I may ask, please?
Ravi Shankar
Our current market share for Leela is 147RGI index. So? So we are 47% more than the market if the luxury market in India was 100. That’s from STR appeal to November.
Achal Kumar
Okay, perfect. Thanks. Rest of my questions are answered. Thank you so much.
Operator
Thank you, ladies and gentlemen. With that, we conclude the question and answer session. I now hand the conference over to the management for their closing comments.
Anuraag Bhatnagar
Thank you everyone. And this being the first call for the new year, once again I wish you and your families a very happy new year. We are extremely happy with the performance and especially thank all our associates who are striving ceaselessly to deliver our commitment to excellence and these phenomenal performances quarter after quarter. And as India continues to grow the focus on luxury, we definitely believe that we are very well positioned voice for the next few quarters as well. Thank you all.
Operator
Thank you on behalf of Leela Palaces Hotels and Resorts limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.