Kotak Securities Recommends BUY for Fractal & Leela Palaces

Kotak Securities, through Shrikant Chouhan, head of equity research, has issued ‘BUY’ recommendations for two stocks: Fractal Analytics and Leela Palaces Hotels & Resorts Ltd. These endorsements come amidst detailed analysis of their growth trajectories and financial performance.

Fractal Analytics’ AI-Driven Growth Projections

Fractal Analytics, a prominent provider of enterprise data, analytics, and AI (DAAI) services, shows robust growth potential. Kotak Securities initiated coverage with a ‘BUY’ rating and a fair value of ₹1,000, projecting substantial financial expansion.

• US$ revenue CAGR (FY2026-29E): 16.6%
• EBITDA margin expansion: 300 bps
• Adjusted PAT CAGR (FY2026-29E): 36%
• Active ‘must-win’ clients: 112
• Client accounts scaled to US$20 million annual revenues: six

This growth is primarily driven by increasing enterprise AI adoption, operating leverage, and reduced ESOP expenses. The company’s strong market position, innovation culture, and ability to attract high-quality clients and talent also contribute significantly.

Leela Palaces Posts Strong Q1FY27 Results

Leela Palaces Hotels & Resorts Ltd. also received a ‘BUY’ rating from Kotak Securities, with a fair value set at ₹575. This recommendation follows the company’s better-than-expected Q1FY27 results, indicating strong operational efficiency.

• Q1FY27 Revenue increase YoY: 28%
• Q1FY27 EBITDA growth: 41%
• Q1FY27 EBITDA margin: 40.7% (expanded 380 bps)
• Average Room Rate (ARR) growth YoY: 10% to ₹20,722 per day
• Occupancy improvement: 390 bps to 67.5%
• RevPAR growth: 17%

The hotel chain’s strong Q1FY27 performance was attributed to improved room rates and stringent cost controls. Domestic room revenues surged by 25% year-on-year, increasing the share of domestic customers to 58%.

Leela Palaces is also benefiting from a gradual recovery in international business as geopolitical tensions ease. The company plans significant expansion, aiming for 5,257 keys across 25 hotels by FY30E, including 812 owned keys in the pipeline.

Kotak Securities projects a 17% EBITDA CAGR for Leela over FY26-30E, driven by industry-leading RevPAR growth and new key additions, reinforcing the positive outlook for both recommended stocks.