Lemon Tree Hotels on Tuesday announced that it had signed a Franchise Agreement for a 34-room property in Manali, Himachal Pradesh, under its brand “Lemon Tree Hotel”. This hotel is expected to be operational by June 2023.
The hospitality company’s share price has increased by 48.74 percent in the past year. Its shares were trading at ₹ 74.00 apiece at 11:36 AM on Thursday.
Business Highlights
Lemon Tree Hotels plans to spend ~₹ 300 million over the next two years to renovate all the hotels under its key portfolio. This will help the company to increase its Average Room Rent (ARR) to over ₹ 4,500 levels. In the quarter ending December 31, 2021, Lemon Tree Hotels reported a RevPAR (revenue generated per available room) of ₹ 3,879.
In the January to March quarter (Q4FY23), the management expects margins to be better than Q3FY23 levels, led by higher occupancy and ARR. In addition, it has given guidance to grow revenue by 20 percent year on year, with EBITDA margins higher than FY23 levels. It expects a 40 to 50 percent growth in the company’s profit after tax (PAT).
The brokerage expects the strong momentum to continue going forward, led by
i) occupancy touching pre-Covid levels, on the back of resilient demand scenario;
ii) further increase in ARR; and
iii) strong addition of hotels under management contracts
Targets
HDFC Securities has maintained a buy recommendation on the shares with a target price of ₹ 108.00 per share. This translates to an upside of 45.95 percent compared to its share price.
Motilal Oswal Financial Services has a buy rating on the stock with a target price of ₹ 115.00 per share. This translates to an upside of 55.41 percent compared to its share price.
ICICI Securities has maintained a buy rating on the shares with a target price of ₹ 125.00 per share. This translates to an upside of 68.92 percent compared to its share price.
Written by Simran Bafna
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.
