Conference Call with Lemon Tree Hotels Ltd. Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Hotels company Lemon Tree Hotels announced Q1FY25 results: Financial Highlights: Total Revenue: Rs 268.4 crore, Up 19% EBITDA: Rs 115.4 crore, Up 8% EBITDA %: 43.0%, Down 456 bps PAT: Rs 20.1 crore, Down 27% Cash Profit: Rs 54.7 crore, Up 9% Cost of Debt %: 8.80%, Down 13 bps Commenting on the performance for Q1FY25, Patanjali Keswani, Chairman & Managing Director – Lemon Tree Hotels Limited said, In Q1, despite the temporary headwinds faced by the hotel sector due to the election process and the extreme heat wave, Lemon tree recorded its highest ever Revenue in Q1 at Rs 268.4 crore. The revenue grew over 19% as compared to Q1FY24 while the EBITDA grew 8% YoY translating into a Net EBITDA Margin of 43% which decreased by 456 bps over Q1FY24. Of this fall in EBITDA margin YoY of ~4.6%, about 50% was due to one off increase in investments in renovation and digital transformation. Q1FY25 recorded a Gross ARR of Rs 5,686 which increased by 9% YoY. The occupancy for the quarter stood at 66.6% which decreased by 360 bps YoY. This translated into a RevPAR of Rs 3,788 which increased by 4% YoY. As I had stated in earlier calls, the decrease in EBITDA margin YoY was owing to planned increases in renovation investments above that spent in Q1FY24 as well as investment in digital capabilities, expansion of our business development team and overall annual payroll increase. The Keys portfolio EBITDA Margin % decreased by ~10 percentage points YoY due to an increase in renovation expenses of Rs ~1.8 Cr over Q1FY24 which is an increase of 100% YoY. During the quarter, ~25% of the total Keys portfolio was shut for renovation which impacted the ability of the Keys portfolio to increase occupancy which decreased by 148 bps YoY. With demand growth expected to exceed supply growth in the next few years accompanied by the structural tailwinds that India is currently witnessing, this significant investment in renovation will allow us to better position our hotels going forward to capture superior pricing and position Lemon tree as the brand of choice in the mid-market segment. Fees from management & franchised contracts for 3rd party owned hotels stood at Rs 12.5 Cr in Q1FY25 up 21% from Rs 10.4 Cr in Q1FY24. Total management fees for Lemon Tree in Q1 were up 22% YoY at Rs 29.1 Cr compared to Rs 23.9 Cr in Q1FY24. During the quarter, we signed 3 new management & franchise contracts which added 187 new rooms to our pipeline and operationalized 4 hotels which added 331 rooms to our portfolio. As of 30th June 2024, the inventory for the group stands at 107 operational hotels with 10,125 rooms, and our pipeline comprises an additional ~4000 rooms. Result PDF