Motilal Oswal's research report on Lemon Tree Hotels
LEMONTRE posted a robust revenue growth (up 2x YoY; 29% from 2QFY20 levels) in 2QFY23, led by increasing ARR (up 19% from 2QFY20 levels) and normalcy in the Hotel industry. Despite occupancy being lower by 8.6pp from 2QFY20 levels, RevPAR improved by 5% to INR3,255. We retain our FY23/FY24 EBITDA estimate and maintain our Buy rating.
We expect LEMONTRE to deliver a revenue/EBITDA CAGR of 59%/97% over FY22-24 and RoE to improve to 13% by FY24. We retain our FY23/FY24 EBITDA estimate and maintain our Buy rating on the stock, with a FY24E SoTP-based TP of INR110.