Buy Lemon Tree Hotels; target of Rs 174: ICICI Securities

ICICI Securities's research report on Lemon Tree Hotels

Lemon Tree Hotels (LEMONTRE) reported Q1FY26 consolidated revenue of INR 3.2bn (up 18% YoY) – in line with I-sec estimates – as portfolio ARRs (including Mumbai Aurika) grew 10% YoY, while occupancy for the quarter stood at 72.5%, which increased 591bps YoY. This translated into a RevPAR of INR 4,523, rising 19% YoY. Hence, Q1FY26 EBITDA of INR 1.4bn was up 22% YoY, at a margin of 45%, which was up 157bps YoY. A scale-up in Aurika, Mumbai airport hotel’s ARRs to over INR 12,000 in FY26, along with a possible Fleur Hotels IPO in FY27 are key monitorables.

Outlook

We retain our BUY rating with an unchanged SoTP-based target price of INR 174, based on 23x Mar’27E EV/EBITDA. Key risks: Demand slowdown in occupancies and room rates.