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Lemon Tree Hotels‘ stock continues its winning streak, reaching an all-time high of Rs 106, marking a remarkable over 800% surge from its Covid-19 rock-bottom of Rs 13.8 on May 21, 2020. The stock’s 2021 and 2022 performances were equally robust, with an impressive 85% gain last year and a 16% increase in 2021.
Originating in 2004 with a modest 49-room debut, Lemon Tree Hotels has grown into a hospitality giant with 8,600 rooms spanning 92 hotels across 58 sought-after destinations.
The company’s recent financial performance is also noteworthy, boasting a 103% rise in Profit After Tax (PAT) to Rs 27.5 crore in the June quarter of 2023-2024, compared to Rs 13.6 crore in the same period the previous year.
Patanjali Keswani, Lemon Tree Hotels’ Chairman and Managing Director, highlighted the chain’s successes in a recent interview with CNBC-TV18. He revealed that the June quarter saw occupancy surpass 70%, with promising projections for the September quarter bolstered by a planned price increase.
Keswani noted, “We intend to average out at an occupancy of about 74 percent and take prices up by another 10-15 percent depending on market conditions in the December quarter and perhaps another 5 percent in March quarter next year.”
Anticipating substantial expansion, Keswani disclosed that over 20 hotels are set to open, adding around 2,000 rooms in fiscal year 2023-2024.
Market experts seem to share Keswani’s enthusiasm, with brokerage firm CLSA maintaining a buy rating on the stock and setting a price target of Rs 115. CLSA predicts Lemon Tree’s robust earnings to escalate in financial year 2025, primarily driven by the Aurika Mumbai Hotel and management contracts.
Trading at Rs 105.40, Lemon Tree Hotels‘ shares have gained 3.2%. Among the 17 analysts monitoring the stock, 15 recommend a buy, while two maintain a sell rating. In terms of projections, ICICI Securities has the loftiest price target at Rs 137 per share, followed closely by Ambit Capital with Rs 130. The consensus estimate points to an additional 10% potential increase for the stock.
