Lemon Tree Hotels Ltd. share price target

LEMONTRE reported a better than expected sales and EBITDA. Revenue grew 2.1x YoY in 3QFY22, led by robust (+109%) RevPAR growth on account of a 15pp improvement in occupancy and 54% growth in ARR. EBITDA surged 3.2x YoY, benefitting from operating leverage. We decrease our FY22E/FY23E EBITDA estimate by 14%/13%, factoring in...

Strong retail demand; corporate travel to recover soon chain in the mid-priced segment in India. It operates 8,497 rooms in 87 hotels across 54 destinations in India and abroad under brands like Aurika (premium), Lemon Tree...

Adjusted loss stood at INR208m in 2QFY22 v/s a loss of INR371m in 2QFY21. Keys Hotels generated a revenue of INR71m (+1.9x QoQ and +31% YoY), with an EBITDA of INR9m (+200% YoY) in 2QFY22. It operated at 29.8% occupancy (+740bp YoY), with an ARR of INR2,053 (-3% YoY)....

About the stock::Promoted by Patanjali Keswani, Lemon Tree (LTHL) is the largest hotel chain in the mid-priced segment in India. It operates 8,300 rooms in 84 hotels across 52 destinations in India and abroad under brands like Aurika (premium),...

Performance set to improve sharply from H2FY22E onwards As the economy is now coming out of pandemic induced pain, LTH is also gradually moving to its full functionality with operational inventory rising from 71.5% in Q1 to 86.8% in Q2, 91.2% in Q3, 93.4% in Q4. Although improvement is getting visible in tourist destinations, a recovery in corporate travel may take at least five to six months due to ongoing work from home policy. We model occupancy of 60%, 69% and ARR of | 3930, | 4710 in FY22E, FY23E, respectively. LTH has taken measures to curtail costs, by taking salary...

As the economy is now coming out of pandemic induced pain, the company is also gradually moving to its full functionality with operational inventory increasing from 71.5% in Q1 to 86.8% in Q2 and 91.2% in Q3. Although, improvement is getting visible in tourist destinations, recovery in corporate travel will take at least eight to 12 months due to ongoing work from home policy. We model occupancy of 47%, 60% and ARR of | 3180, | 4455 in FY21E, FY22E, respectively. LTH has taken measures to curtail costs, by taking salary cuts, re-negotiating contracts, reducing repairs costs, reduction...

LEMONTRE's 3QFY21 revenue grew 44% QoQ, led by 25% RevPAR growth. This was on the back of 10pp improvement in occupancy, but was offset by a 5% decline in ARR. EBITDA soared 142% QoQ on cost-saving initiatives. Factoring in the current demand scenario, particularly in business travel, we have lowered our FY21E EBITDA estimate by 12% and have largely maintained our FY22E/FY23E EBITDA estimates. We have a Buy rating on the stock with TP of INR50 per share....

Stringent cost control remains key for survival With re-opening of state borders, the company saw a recovery in demand. Operating inventory also increased from 71.5% in Q1 to 86.8% in Q2. This led to 17.1% QoQ growth in revenues for the quarter. Although some improvement would be visible, going forward, with gradual unlocking of economy meaningful recoveries will take at least 12-15 months. We model occupancy of 43%, 60% and ARR of | 3580, | 4210 in FY21E, FY22E, respectively. LTH has taken measures to curtail costs, by taking salary cuts,...

Revenue stood at INR476m (v/s est. INR452m) in 2QFY21, down 69% YoY. ARR declined 36% YoY to INR2,654, and occupancy declined by 42.4pp (to 32.4%). Thus, RevPAR plunged 72% YoY to INR859. EBITDA plummeted 83% YoY to INR83m (v/s est. INR90m and INR44m in 1QFY21). Adj. loss stood at INR371m (v/s loss of INR22m last year). On QoQ basis, RevPAR grew 13%, led by 350bp improvement in occupancy and 1% increase in ARR. Revenue/EBITDA grew 17%/91% QoQ. On same hotel basis (excluding hotels, which were commissioned over the...