Buy Lemon Tree Hotels, target price Rs 115: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Lemon Tree Hotels with a target price of Rs 115. The current market price of Lemon Tree Hotels is Rs 74.15.

Lemon Tree Hotels, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 5811.13 Crore) operating in Tourism & Hospitality sector.

Lemon Tree Hotels key Products/Revenue Segments include Income from Rooms, Restaurants & Other Services and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 234.11 Crore, up 18.58 % from last quarter Total Income of Rs 197.43 Crore and up 60.34 % from last year same quarter Total Income of Rs 146.01 Crore. Company has reported net profit after tax of Rs 48.37 Crore in latest quarter.

The company’s top management includes Mr.Patanjali Govind Keswani, Mr.Arvind Singhania, Mr.Paramartha Saikia, Ms.Freyan Jamshed Desai, Dr.Arindam Kumar Bhattacharya, Mr.Pradeep Mathur, Mr.Niten Malhan, Mr.Aditya Madhav Keswani, Mr.Willem Albertus Hazeleger, Mr.Ashish Kumar Guha. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2022, the company has a total of 79 Crore shares outstanding.

Investment Rationale
Margins are expected to improve QoQ in 4QFY23, led by higher occupancy rate (OR) and average room rate (ARR). Management has guided for revenue growth of 20% YoY in FY24 with EBITDA margins higher than FY23 levels and PAT growth of ~40-50% YoY.

Promoter/FII Holdings
Promoters held 23.61 per cent stake in the company as of 31-Dec-2022, while FIIs owned 26.81 per cent, DIIs 10.14 per cent.