Schloss Bangalore gains 5% as Morgan Stanley, BofA initiate coverage with bullish calls

Schloss Bangalore made an underwhelming maket debut on June 2, when the stock listed at a 7 percent discount.

Shares of Schloss Bangalore Ltd, the owner of the Leela Hotels chain, rallied as much as 5 percent to Rs 426 on July 8 after two global brokerages initiated coverage with bullish views, citing strong fundamentals and a promising growth outlook.

This fresh optimism comes just over a month after Schloss Bangalore’s underwhelming market debut on June 2, when the stock listed at a 7 percent discount.

BOFA Securities started its coverage with a ‘Buy’ call, setting a price target of Rs 520 per share, implying an upside potential of 28 percent from the last close of Rs 406 on the NSE. The brokerage believes that favourable industry dynamics and the company’s strategic focus on expanding its high-end hospitality portfolio will drive steady gains in both revenue and profitability.

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Key drivers identified by BOFA include the performance of Schloss’s five marquee hotels, medium-term expansion plans, and a nearly debt-free balance sheet—factors that are expected to support robust growth. The stock’s valuation, pegged at 20 times FY27 estimated EBITDA, remains compelling, the note said.

Morgan Stanley echoed the optimism, initiating coverage with an ‘Overweight’ rating and a higher target of Rs 549. According to the brokerage, Schloss stands to benefit from a prolonged upcycle in luxury travel, increasing demand for premium experiences, and its enviable portfolio of legacy assets.

Morgan Stanley also highlighted that the company’s debt-light capital structure gives it the financial flexibility to self-fund its upcoming capex cycle.

At about 10 am, shares of the company were trading at Rs 424, higher by 4.4 percent from the last close on the NSE.

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