Accumulate Lemon Tree Hotels target of Rs 217: Asit C Mehta

Asit C Mehta report on Lemon Tree Hotels

Lemon Tree Hotels Limited (LTH) is India’s largest mid-priced hotel chain and a leading player in the hospitality sector. Established in 2002, the company has rapidly expanded its footprint across the country with a portfolio spanning the economy, midscale, uppermidscale, and upscale hotel segments. Over the years, Lemon Tree has positioned itself as a preferred brand for business and leisure travelers by offering a balance of affordability, quality service, and modern amenities. With its strong brand identity, the company operates multiple formats including Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, and Aurika Hotels & Resorts. Known for its wide reach and innovative operating model, Lemon Tree Hotels has built a network of properties strategically located in metros, tier-1, and tier-2 cities, catering to India’s growing domestic travel demand. The company has also adopted an asset-light strategy by focusing on management contracts alongside owned and leased properties, which supports faster growth and scalability.

Outlook

As the market leader in the mid-priced hotel segment, with a rapidly expanding portfolio expected to cross 20,000 rooms well ahead of schedule, we expect Lemon Tree Hotels to deliver higher-than-industry revenue growth. We recommend an ACCUMULATE rating on the stock, with an expected revenue CAGR of 10% over FY25- 27E during the same period. We estimate a forward EV/EBITDA multiple of 24.1x based on FY27E earnings, resulting in a target price of ₹217 per share.