Shares of this small-cap hospitality stock rose around 4 percent in Tuesday’s trading session after the company signed a Franchise Agreement for an upcoming hotel in Somnath, Gujarat.
With a market capitalization of Rs 9,340.59 crores, the stocks of Lemon Tree Hotels Limited opened their trading hour on Tuesday at Rs 114.05 and currently trade at Rs 117.90, gaining around 4 percent as compared to the previous closing levels of Rs 113.90 apiece.
Such bullish movements in the company’s stock price were witnessed after a BSE filing was published pertaining to a Franchise Agreement signed by Lemon Tree Hotels for an upcoming hotel under the name ‘Lemon Tree Resort’ in Somnath, Gujarat. The property is expected to open in FY 2025.
As we diversify our portfolio with properties across the country, we are making forays into tier II, III and IV cities. This opening will be in addition to our six existing and three upcoming hotels and resorts in the state and we are looking to expand our footprint in Gujarat further.” commented Mr. Vilas Pawar, CEO- Franchise Division, Lemon Tree Hotels.
The recent financial years have brought positive changes to the company’s income statement with both the basic business indicators such as the operating revenues and net profits showing an increase in numbers.
The operating revenues of the company more than doubled from Rs 402.24 crores during FY21-22 to Rs 874.99 crores during FY22-23. Moreover, the net profits of the company transitioned from a loss of Rs 137.36 crores to profits of Rs 140.54 crores keeping the timeframe the same.
The profitability metrics of the company such as the return on equity (RoE) and the return on capital employed (RoCE) were reported at 16.68 percent and 14.06 percent respectively during FY22-23.
As per the latest shareholding data available for the quarter ended June 2023, the company’s Promoters hold a 23.6 percent stake, and the Foreign Institutional Investors (FIIs) hold a considerable stake of 25.48 percent in the company.
Incorporated in 1992, Lemon Tree Hotels Limited is engaged in the business of owning as well as operating a chain of leisure hotels. The company provides housing rental, project design & management services. It operates various hotels in India under various brands including Lemon Tree Premier, Red Fox Hotels, etc.
Written by Amit Madnani
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
