Angel Broking neutral on Hotel Leela

“Hotel Leela is looking to cash in on the growing real estate market in Chennai, as it plans to partly sell and lease its Leela IT Park in Chennai. The property, spread across 2.75 lakh sq. ft. located in Adyar, is expected to fetch Rs 275 crore–300 crore for the company. The deal for partial sale of the property is expected to be finalised in a month. Moreover, the company has decided not to have a hotel in Pune and instead develop the land for a residential complex.”

“Earnings from that initiative, which could be worth Rs 250 crore, will also be used to clear debt. The moves would enable the company reduce its debt of Rs 2600 crore by Rs 550 crore–600 crore. We believe these initiatives to have a positive impact on the financials of the company, considering the existing high debt on its books. We maintain our Neutral rating on the stock,” says Angel Broking research report.

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