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Buy Lemon Tree Hotels; target of Rs 25: Motilal Oswal

Motilal Oswal is bullish on Lemon Tree Hotels has recommended buy rating on the stock with a target price of Rs 25 in its research report dated June 01, 2020.

June 03, 2020 / 02:02 PM IST
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Motilal Oswal 's research report on Lemon Tree Hotels

Lemon Tree Hotels (LEMONTRE)’s revenue grew 17% YoY, with like-for-like EBITDA (adj. for Ind-AS) growing 13%, largely driven by new hotel additions (absent in the base quarter) and the Keys Hotels acquisition. COVID-19 dented performance, reflected in decline in occupancy by 13pp YoY (to 65%) during the quarter. This led to decline of 13% in RevPAR; thus, on a samehotel basis, EBITDA declined 22% YoY, restricting consolidated EBITDA growth. MoM improvement at LEMONTRE’s operational hotel is quite impressive; operational hotels generated hotel-level GOP of INR22m in May’20 (v/s INR1m in April’20). Factoring in near-term weakness in demand, we cut our revenue estimates by 28%/24% for FY21/FY22 and EBITDA estimates by 1%/16% for FY21/FY22.


We value the stock on an SOTP basis and arrive at a target price of INR25. Maintain Buy.


For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jun 3, 2020 02:02 pm

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