During Tuesday’s trading session, the shares of one of the largest hotel chains in India that owns/leases/operates/franchises hotels across the upscale, upper-midscale, midscale and economy segments in the country surged by nearly 5 percent to hit an intraday high at Rs. 134.95 on BSE.
This positive fluctuation in the share price was sparked after Macquarie retained an “outperform” rating on the stock, with a potential upside of about 56 percent.
Price Movement
With a market capitalisation of Rs. 10,659.7 crores, the shares of Lemon Tree Hotels Limited closed in the green at Rs. 134.65, up by nearly 4.7 percent, as compared to its previous closing price of Rs. 128.65. The stock has delivered positive returns of nearly 4 percent in the last six months, as well as around 8.4 percent returns in the last one month.
Brokerage Target
The global brokerage firm Macquarie has reiterated an “outperform” rating on Lemon Tree Hotels Limited and assigned a target price of Rs. 210 per share, representing a potential upside of nearly 56 percent from Tuesday’s closing price.
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Brokerage Outlook
Macquarie highlights that Lemon Tree Hotels is well-positioned for accelerated growth, driven by the renovation of new hotels and an increase in room inventory.
The brokerage also notes that the hotel chain operator’s valuation remains attractive, currently trading at a 9 percent discount compared to historical valuations levels. Additionally, Macquarie projects that the company has the potential to double its earnings by FY28.
Financials
Lemon Tree Hotels reported a significant growth in revenue from operations, experiencing a year-on-year rise of nearly 22.4 percent, from Rs. 290 crores in Q3 FY24 to Rs. 355 crores in Q3 FY25. Similarly, its net profit increased during the same period from Rs. 44 crores to Rs. 80 crores, representing a growth of nearly 82 percent YoY.
About the Company
Lemon Tree Hotels Limited is engaged in the business of developing, owning, acquiring, renovating, operating, managing and promoting hotels, motels, resorts, restaurants, etc. under the brand name of Aurika Hotel, Lemon Tree Premier, Lemon Tree Hotel, Red Fox Hotel, Keys Select, Keys Prima and Keys Lite.
Written by Shivani Singh
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