Buy Lemon Tree Hotels; target of Rs 135: Motilal Oswal

Motilal Oswal's research report on Lemon Tree Hotels

LEMONTRE posted a revenue growth of 16% YoY in 2QFY24, primarily led by improved occupancy (up 550bp YoY), followed by higher ARR (up 7% YoY). Occupancy improved in the range of 300bp to 960bp across regions, except Delhi (declined 350bp), due to the shutdown of the city during the G20 summit. ARR also increased across regions with Delhi/Mumbai (up 17%/10% YoY) leading the way with a YoY uptick of 17%/10%, respectively.

Outlook

We maintain our FY24/FY25 EBITDA estimate and retain our BUY rating on the stock with our SoTP-based TP of INR135.