Synopsis: ICICI Securities remains positive on Lemon Tree Hotels, citing its proposed demerger, strong expansion plans, improving occupancy levels, and growth potential from both asset-light and asset-heavy businesses.
This Small-Cap Hospitality Stock, engaged in owning, operating, and managing hotels across luxury, upscale, midscale, and economy segments, serving business and leisure travelers, is in focus after ICICI Securities gave a Buy target of Rs. 156, which has an upside potential of 31.37 percent.
With a market capitalization of Rs. 9,550.53 crore, the shares of Lemon Tree Hotels Limited were currently trading at Rs. 120.55 per equity share, rising nearly 1.52 percent from its previous day’s close price of Rs. 118.75
What is the News?
ICICI Securities, a prominent brokerage firm, has recommended a “Buy” call on Lemon Tree Hotels Limited with a target price of Rs. 156 per share, indicating an upside potential of 31.37 percent from its previous day’s close of Rs. 118.75 per share.
ICICI Securities has maintained a BUY rating on Lemon Tree Hotels, citing value creation opportunities from the proposed demerger and strong long-term growth prospects. The company plans to separate its hotel management business and hotel ownership business, creating two focused entities. Lemon Tree Hotels will become a pure-play asset-light management company with higher margin potential, while Fleur Hotels will focus on owning and expanding hotel assets.
The brokerage believes Fleur Hotels is well-positioned for growth, supported by Warburg Pincus’ investment and a planned capital deployment of up to Rs. 26 billion over the next 12-18 months. The company also expects improving occupancy levels driven by healthy domestic travel demand. With a large operational base and a strong pipeline of upcoming hotel rooms, both businesses are expected to benefit from industry growth and generate long-term shareholder value.
Hospitality Portfolio
Lemon Tree Hotels has a strong and diversified hospitality portfolio. As of 31 March 2026, the company operates 131 hotels with 11,811 rooms across its various brands. It also has a robust pipeline of 137 hotels with 10,770 rooms, highlighting its aggressive expansion plans and long-term growth strategy.
The combined portfolio of operational and pipeline properties stands at 268 hotels with 22,581 rooms. Among its brands, Lemon Tree Hotels is the largest with 10,508 rooms across 143 hotels, followed by Lemon Tree Premier with 4,635 rooms across 38 hotels, Keys Hotels with 4,203 rooms across 67 hotels, Aurika Hotels & Resorts with 2,182 rooms across 10 hotels, and Red Fox Hotels with 1,053 rooms across 10 hotels.
The near-equal split between operational rooms (11,811) and pipeline rooms (10,770) provides strong visibility for future growth. With properties spanning luxury, upscale, midscale, and economy segments, Lemon Tree is well positioned to capitalize on rising travel and tourism demand while expanding its presence across key markets.
Company Overview
Lemon Tree Hotels Limited is an Indian hospitality company that develops, owns, operates, and franchises hotels across multiple market segments. Founded in 1992 and headquartered in New Delhi, it is one of India’s largest hotel chains, known for its focus on midscale and economy accommodations and a strong commitment to inclusivity and sustainability.
Recent Quarter Results
Coming into financial highlights, Lemon Tree Hotels Limited’s revenue has increased from Rs. 379 crore in Q4 FY25 to Rs. 416 crore in Q4 FY26, which has grown by 9.76 percent. The net profit has also grown by 7.41 percent from Rs. 108 crore in Q4 FY25 to Rs. 116 crore in Q4 FY26. Lemon Tree Hotels Limited’s revenue and net profit have grown at a CAGR of 42 percent and 32 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE stand at 14 percent and 19.4 percent, respectively. Lemon Tree Hotels Limited has an earnings per share (EPS) of Rs. 2.87, and its debt-to-equity ratio is 1.44x.
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