Buy Lemon Tree Hotel; target of Rs 37: Dolat Capital Market

Dolat Capital Market is bullish on Lemon Tree Hotel has recommended buy rating on the stock with a target price of Rs 37 in its research report dated November 10, 2020.

Broker Research

November 12, 2020 / 13:50 IST

26 Aug, 2025 12:21

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Dolat Capital Market's research report on Lemon Tree Hotel

Lemon Tree Hotels (LTH) Q2FY21 was weak with 69/83% revenue and EBITDA decline YoY led by pandemic. But, LTH is a potential post-covid recovery play. The worst phase for the hotel industry is likely behind. Revival may be gradual over 18-24 months to hit the historic 70-75% occupancies and Rs 4k+ ARR for LTH. But, operating performance to improve from hereon and cost rationalization benefits may be structural. Low-inventory supply and consolidation are likely to be other benefits. LTH with its superior positioning in ~Rs 4-4.5k ARR bracket in mid-market segment, high-dependency on domestic clients (~85%) and room revenues (~75%) is well-poised for recovery.

Outlook

We have trimmed our FY21/22/23E EBITDA by 29/24/4% to factor in the delay in the recovery of the hospitality business. BUY with TP of Rs 37 @ 20x Dec-22E EV/EBITDA. Lack of revival in business travel is a key structural risks.

For all recommendations report, click here