LEMONTREE - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:01 am

Swing Trade Rating: 3.3

📊 Lemon Tree Hotels (LEMONTREE) shows moderate potential for swing trading. The stock is trading close to its 50 DMA (161 ₹) and above its 200 DMA (153 ₹), reflecting consolidation near support levels. RSI at 47.5 indicates neutral momentum, while MACD is slightly positive (0.12), suggesting mild upward bias. Fundamentally, the company has shown quarterly PAT growth (+16.5%), but valuations are stretched with a very high P/E of 118 compared to industry average of 34.1. ROE (8.33%) and ROCE (11.2%) remain modest, limiting upside strength.

💡 Optimal Entry Price: Around 155–160 ₹ (near DMA support zone).

🚪 Exit Strategy: If already holding, consider exiting near 175–181 ₹ (recent high and resistance zone) or if RSI crosses 65 with weakening momentum.

✅ Positive

• 📈 Quarterly PAT increased from 20.5 Cr. to 22.6 Cr. (+16.5%)
• 💰 Low debt-to-equity ratio (0.28) ensures financial stability
• 📊 Stock trading above 200 DMA shows longer-term bullish support
• 📦 Slight increase in FII holdings (+0.12%)

⚠️ Limitation

• 📉 Extremely high P/E ratio (118) compared to industry average (34.1)
• 📊 EPS of 1.36 ₹ remains weak relative to valuation
• 📉 ROE (8.33%) and ROCE (11.2%) are modest
• 📊 Trading volume below weekly average (7,91,454 vs 10,53,373)

🚨 Company Negative News

• 📉 Decline in DII holdings (-0.27%)
• 📊 Valuation premium may limit near-term upside

🌟 Company Positive News

• 📈 PAT growth indicates operational improvement
• 💡 FII holdings increased slightly (+0.12%), showing foreign investor confidence

🏭 Industry

• 📊 Industry P/E at 34.1, Lemon Tree trades at a steep premium valuation
• 🏨 Hospitality sector supported by rising demand for travel and tourism recovery

📌 Conclusion

⚖️ Lemon Tree Hotels is a cautious candidate for swing trading. Fundamentals show profit growth and low debt, but valuations are stretched and efficiency ratios remain modest. A careful entry near 155–160 ₹ could provide upside potential toward 175–181 ₹. Traders should monitor RSI and MACD closely to confirm momentum before committing to positions.

I can also outline short-term breakout levels beyond 181 ₹ to track potential upside continuation.