LEMONTREE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.5
| Stock Code | LEMONTREE | Market Cap | 9,316 Cr. | Current Price | 118 ₹ | High / Low | 181 ₹ |
| Stock P/E | 80.7 | Book Value | 16.4 ₹ | Dividend Yield | 0.00 % | ROCE | 11.2 % |
| ROE | 8.33 % | Face Value | 10.0 ₹ | DMA 50 | 117 ₹ | DMA 200 | 135 ₹ |
| Chg in FII Hold | 0.09 % | Chg in DII Hold | -3.78 % | PAT Qtr | 36.4 Cr. | PAT Prev Qtr | 22.6 Cr. |
| RSI | 54.4 | MACD | 2.02 | Volume | 23,58,193 | Avg Vol 1Wk | 28,70,298 |
| Low price | 99.6 ₹ | High price | 181 ₹ | PEG Ratio | 0.80 | Debt to equity | 0.28 |
| 52w Index | 22.2 % | Qtr Profit Var | 27.8 % | EPS | 1.29 ₹ | Industry PE | 28.8 |
📊 Lemon Tree Hotels shows moderate fundamentals with a market cap of ₹9,316 Cr. and current price of ₹118, trading near its 50 DMA (₹117). Efficiency metrics are modest — ROE at 8.33% and ROCE at 11.2% — while valuations are stretched with a P/E of 80.7 compared to the industry average of 28.8. Debt-to-equity at 0.28 is manageable, and PEG ratio at 0.80 suggests reasonable growth-adjusted valuation. EPS remains low at ₹1.29, though quarterly PAT growth (+27.8%) indicates improving profitability. Institutional flows are mixed, with FIIs slightly positive (+0.09%) but DIIs reducing (-3.78%).
💡 Entry Zone: ₹112–₹118 (near 50 DMA support)
📈 Long-Term Holding: Suitable for cautious accumulation on dips, but limited upside due to high valuations and modest return ratios. Investors should monitor earnings consistency and sector recovery before long-term commitment.
✅ Positive
- Quarterly PAT growth (+27.8%) shows improving profitability
- PEG ratio (0.80) indicates reasonable growth-adjusted valuation
- Debt-to-equity ratio (0.28) remains manageable
- FIIs slightly increased holdings (+0.09%)
⚠️ Limitation
- High valuation (P/E 80.7 vs industry 28.8)
- Low EPS (₹1.29) limits earnings strength
- Weak ROE (8.33%) and ROCE (11.2%) compared to peers
- DIIs reduced holdings (-3.78%), showing reduced domestic confidence
📉 Company Negative News
- High valuation pressure compared to sector peers
- Weak efficiency metrics despite revenue growth
- No dividend yield, limiting shareholder returns
📈 Company Positive News
- PAT improved significantly (₹22.6 Cr → ₹36.4 Cr)
- Technical indicators supportive (RSI 54.4, MACD positive)
- Debt levels remain under control
🏭 Industry
- Hospitality sector trades at lower P/E (28.8), making Lemon Tree relatively expensive
- Industry outlook supported by tourism recovery and rising demand in mid-market hotels
🔎 Conclusion
Lemon Tree Hotels shows improving profitability and manageable debt, but valuations remain stretched with weak efficiency metrics. Entry near ₹112–₹118 offers a risk-managed opportunity. Long-term investors should accumulate cautiously, focusing on earnings consistency and sector recovery trends.