Leela Palaces Hotels & Resorts Ltd.

“Leela Palaces is a structurally sound operating business — best-in-class margins, irreplaceable assets, and durable brand equity positioned for India's luxury travel upcycle — but the equity investment case is undermined by Brookfield's dual role as controlling shareholder and landlord (a permanent governance overhang), legacy debt that keeps ROIC below cost of capital, a fully OFS IPO that returned nothing to the balance sheet, and a valuation at 30.8x forward P/E that prices in the bull case with no margin of safety; the expected 5-year return of ~5% CAGR is inadequate compensation for these structural risks.”