Synopsis:
India’s hotel industry is witnessing a strong recovery in 2025, with revenue per available room exceeding, driven by higher occupancy rates. In Q2 FY25, India’s hospitality industry reported a 12.9% year-on-year growth in Revenue per Available Room.
In the 56th GST Council, it was announced that hotel rooms costing Rs.7,500 or less per day will now have a 5 percent tax without input tax credit, from the previous 12 percent with input tax credit. Nuvama Institutional Equities expects strong growth in the second half of the year, with festivals, winter travel, and weddings boosting demand, while limited supply in premium hotels drives higher room rates.
1. Lemon Tree Hotels Limited
Lemon Tree Hotels is India’s largest mid-priced hotel chain, operates in upscale, midscale, and economy segments. With a market capitalization of Rs.13,705.86 crore, the shares of Lemon Tree Hotels Limited are trading at Rs.173, up by 1.38 percent from the previous day’s closing price of Rs.170.65.
Yes Securities indicated a Buy rating for Lemon Tree Hotels Limited with target price of Rs.190 per share having an upside potential of 10 percent.
In Q1 FY26, the company posted revenue of Rs.315.7 crore, up from Rs.268 crore a year ago, with net profit rising to Rs.48.1 crore from Rs.20.11 crore. Return on equity and return on capital employed stood at 18.4 percent and 12.7 percent respectively. Trading at a P/E of 63.29, the stock is overvalued compared to the industry average of 38.39.
2. Chalet Hotels Limited
Chalet Hotels operates in hospitality, commercial and retail businesses, and real estate development. With a market capitalization of Rs.22,536.73 crore, the shares of Chalet Hotels Limited are trading at Rs.1,031.05 , up by 1.63 percent from the previous day’s closing price of Rs.1,014.55.
Yes Securities indicated a Buy rating for Chalet Hotels Limited with target price of Rs.1,090 per share having an upside potential of 7 percent.
In Q1 FY26, the company posted revenue of Rs.894.5 crore, up from Rs.361 crore a year ago, with net profit rising to Rs.203 crore from Rs.60.4 crore. Return on equity and return on capital employed stood at 5.77 percent and 11.1 percent respectively. Trading at a P/E of 78.18, the stock is overvalued compared to the industry average of 38.39.
3. Apeejay Surrendra Park Hotels Limited
Apeejay Surrendra Park Hotels Limited operates in the hospitality sector and offers yacht rental services. With a market capitalization of Rs.3,335.04 crore, the shares of Apeejay Surrendra Park Hotels Limited are trading at Rs.156.30 , up by 0.55 percent from the previous day’s closing price of Rs.155.45.
Yes Securities indicated a Buy rating for Apeejay Surrendra Park Hotels Limited with target price of Rs.235 per share having an upside potential of 50 percent.
In Q1 FY26, the company posted revenue of Rs.135 crore, up from Rs.154.2 crore a year ago, net profit rising to Rs.13.42 crore from loss of Rs.1.90 crore. Return on equity and return on capital employed stood at 6.74 percent and 12.3 percent respectively. Trading at a P/E of 33.48, the stock is undervalued compared to the industry average of 38.39.
Written By: Jhanavi Sivakumar
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