This Hotel Stock May Gain 48% : Shares of Lemon Tree Hotels Ltd were trading at ₹126 in the latest session, down about 1.4% from the previous close. The company currently has a market capitalisation of around ₹9,966 crore.
Lemon Tree is among India’s larger mid-scale hotel chains, with properties spread across business and leisure locations. Over the years, it has built a presence through multiple brands targeting different customer segments, mainly focused on value-driven hospitality.
Brokerage Maintains ‘Buy’ Rating
IDBI Capital has retained its ‘Buy’ recommendation on the stock and set a target price of ₹187 per share. From the current level of ₹126, that implies a potential upside of roughly 48%.
The brokerage’s positive stance reflects expectations of better occupancy levels, stronger room pricing, and gradual improvement in earnings as the hospitality cycle remains favourable.
Q3 Performance Snapshot
In the third quarter of FY26, Lemon Tree reported revenue of ₹4,061 million, up 14% year-on-year. EBITDA increased 11% to ₹2,047 million during the same period.
Margins, however, saw some pressure. EBITDA margin slipped by around 145 basis points. The company attributed this to renovation costs, technology-related spending, and GST impact.
Net profit rose modestly by 2.5% despite exceptional expenses of ₹313 million during the quarter.
What’s Supporting the Business
The Indian hospitality sector has been seeing improved demand in both business and leisure travel. Corporate bookings, weddings, and domestic tourism have supported occupancy levels across major cities.
Lemon Tree’s strategy has been to focus on operational efficiency and steady expansion rather than aggressive pricing. Industry observers believe that improving average room rates (ARR) and stable occupancy could support earnings growth in the coming quarters.
What Investors May Watch
While demand trends remain supportive, investors may track:
- Occupancy and average room rate growth
- Cost control amid expansion
- Debt levels and cash flow
- Impact of ongoing renovations
Hotel businesses are sensitive to economic cycles, so sustainability of demand will be key.
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