>HOTEL LEELAVENTURE LIMITED (INDIA INFOLINE)

An improvement in H2 FY10 occupancies across room portfolio coupled with steady average room rates (ARRs) has been key to Hotel Leela's recovery from amongst the worst downturn in the hospitality industry. Even so, Numbai and Bangalore luxury markets (~65% of FY11E room revenues) have not shown the kind of business ramp up seen in Delhi or Hyderabad.

We now expect FY11 occupancies to be in the range of 66-74% (an increase of 200 - 400bps from previous estimate)while room tariffs may be flat yoy. Revise Fy11 revenue and EPS estimates by 11% and 16% respectively. Raise TP to Rs35 but retain SELL.

■ H2 occupancies better than expected

■ Volume growth in FY11 partly offsets weak ARRs

■ Co in recovery mode remains expensive: SELL

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