Buy Lemon Tree Hotels, target price Rs 190: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Lemon Tree Hotels with a target price of Rs 190. The current market price of Lemon Tree Hotels Ltd. is Rs 154.25 . Lemon Tree Hotels, incorporated in 1992, is a Mid Cap company with a market cap of Rs 12207.73 crore, operating in Tourism & Hospitality sector.

Lemon Tree Hotels Ltd. key Products/Revenue Segments include Income from Rooms, Restaurants & Other Services and Other Operating Revenue for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 284.84 crore, up 5.16% from last quarter Total Income of Rs 270.86 crore and up 23.78% from last year same quarter Total Income of Rs 230.12 Crore. Company has reported net profit after tax of Rs 34.88 Crore in latest quarter.

The company's top management includes Mr.Patanjali Govind Keswani, Mr.Niten Malhan, Mr.Willem Albertus Hazeleger, Mr.Aditya Madhav Keswani, Ms.Freyan Jamshed Desai, Mr.Paramartha Saikia, Ms.Smita Anand, Mr.Praveen Garg, Mr.Sanjiv Nandan Sahai. Company has Deloitte Haskins & Sells LLP as its auditors. As on 30-09-2024, the company has a total of 79 Crore shares outstanding.

Investment Rationale
Long-term structural demand drivers, such as buoyant economic activities, new convention centers, improved connectivity and infrastructure, recovery in FTA and rising trends of spiritual tourism/wildlife tourism, should continue to drive growth for the industry. Motilal Oswal Financial Services anticipates hotel companies to post healthy growth in 2HFY25/FY26, aided by: 1) an increase in ARR across hotels, due to a favorable demand-supply scenario, corporate rate hikes, and room upgrades through renovations; and 2)heathy operating leverage. The brokerage reiterates a BUY rating on Lemon Tree Hotels with a target price of Rs 190.