Key Points of Lemon Tree Hotels New Property:
- Lemon Tree Hotels announced a new 60-room property in Sri Ganganagar, Rajasthan, marking its sixth new property in just one month.
- Upcoming locations in Manali, Bhopal, Kasauli, and Dapoli are expected to become operational between 2023 and 2026.
- Despite a small dip in stock prices, the company remains bullish thanks to rising average room rates and upcoming global events in India.
- Lemon Tree Hotels has optimised costs by lowering its staff-to-room ratio by 15-20 percent from pre-COVID levels.
- CLSA predicts the hotel chain’s demand to grow at a CAGR of 12 percent, aiming to become debt-free within four years and scale up to 25,000 rooms within five years.
- In Q3, Lemon Tree Hotels reported a consolidated profit of Rs 40 crore for the quarter ended December FY23, a significant improvement from the same period last year.
- With a consensus target price of Rs 105.82, investors can expect a 34 percent upside from the current level.
Details of Lemon Tree Hotels New Property:
Lemon Tree Hotels Expands with Sixth New Property in Rajasthan, Shares Rise Over 2.5%
On March 17, Lemon Tree Hotels gained over 2.5 percent following the announcement of a new 60-room property in Sri Ganganagar, Rajasthan. This marks the hotel chain’s sixth new property in just one month, with upcoming locations in Manali, Bhopal, Kasauli, and Dapoli expected to become operational between 2023 and 2026.
Despite a small dip in stock prices over the past month, the company remains bullish thanks to rising average room rates and upcoming global events set to take place in India, such as the cricket world cup and the G20 summit. Lemon Tree Hotels has optimised its costs over the past two years, lowering its staff-to-room ratio by 15-20 percent from pre-COVID levels.
CLSA, a foreign brokerage firm, predicts the hotel chain’s demand to grow at a compounded annual growth rate (CAGR) of 12 percent, with the company aiming to become debt-free within four years. Lemon Tree Hotels’ EBITDA margin is expected to remain above 50 percent, and CLSA predicts the company will scale up to 25,000 rooms within five years.
In Q3, the hotel chain operator reported a consolidated profit of Rs 40 crore for the quarter ended December FY23, a significant improvement from the Rs 1.87 crore loss in the same period last year. Consolidated revenue for the quarter also increased by 62.6 percent YoY to Rs 233.5 crore, with EBITDA growing by 100 percent YoY to Rs 126.5 crore, and margins improving 1,010 basis points to 54.15 percent. With a consensus target price of Rs 105.82, investors can expect a 34 percent upside from the current level.
About Lemon Tree Hotels:
Lemon Tree Hotels is a chain of hotels and resorts located in various cities across India. The company was founded in 2002 with the aim of providing high-quality, affordable accommodation to both business and leisure travelers. Lemon Tree Hotels is known for its vibrant, stylish interiors, comfortable rooms, and exceptional service. The chain has a range of hotels that cater to different budgets and needs, including upscale hotels, mid-scale hotels, and economy hotels. Lemon Tree Hotels also has a strong focus on sustainability and eco-friendliness, and many of its properties are LEED-certified.
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