LEMONTREE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Here’s a full-spectrum analysis of Lemon Tree Hotels Ltd (LEMONTREE)

📊 Core Financials

Profitability: ROE of 18.4% is strong, while ROCE at 12.7% is decent for the hospitality sector.

Quarterly PAT: Jumped from ₹62.5 Cr to ₹84.6 Cr — a solid 26.4% growth, indicating operational momentum.

Debt Profile: Debt-to-equity ratio of 1.85 — moderately high, typical for asset-heavy hotel businesses.

Cash Flow: Not disclosed, but improving profits and expansion suggest reinvestment and operational strength.

💰 Valuation Metrics

Metric Value Interpretation

P/E Ratio 60.6 Richly valued vs industry PE of 37.4 — priced for growth

P/B Ratio ~10.2 High — reflects strong market optimism

PEG Ratio 0.98 Fairly valued — growth aligns with price

EPS ₹2.48 Modest earnings base

🧠 Business Model & Competitive Edge

Core Focus: Operates mid-scale and upscale hotels under brands like Lemon Tree Premier and Red Fox — strong brand recall.

Expansion Strategy: Aggressive growth via management contracts and franchise models — asset-light scalability.

Pan-India Presence: Strategic locations across Tier 1 and Tier 2 cities — captures both business and leisure segments.

Recent Developments: New hotel signings in Jaipur, Darjeeling, and Greater Noida signal continued footprint expansion

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📈 Technical & Sentiment Indicators

RSI (53.0): Neutral — no strong directional bias.

MACD (3.45): Positive — bullish momentum building.

DMA Levels: Trading above both 50-DMA and 200-DMA — technically strong.

🏁 Entry Zone & Long-Term View

Entry Zone: ₹140–₹145 — near 50-DMA and below recent highs.

Holding Guidance: Long-term potential is promising due to brand strength, expansion strategy, and improving profitability. However, valuation is stretched — ideal to accumulate on dips.

Would you like a breakdown of its hotel pipeline or a comparison with peers like Indian Hotels or Chalet Hotels?

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