Macquarie Projects 35% Upside Potential For Lemon Tree Post Q2 Results — Check Target Price

Macquarie believed the performance of Lemon Tree Hotels' during July–September, but the outlook for the company looks better. The brokerage raised the target price to Rs 210, which indicated 35% upside from Thursday's close price.

Macquarie has an 'Outperform' rating on the stock

Macquarie expects the real growth and margin profile to emerge as Lemon Tree's strategy to grow in mid-market is paying off. Growth from organic and current pipeline will drive free cash flow, reduce debt, resulting in a return on capital employed expansion, Macquarie said in a report.

According to Macquarie, Lemon Tree Hotels has numerous tailwinds for revenue. Renovated rooms are coming to the markets at a much higher average room rate and ocupancy, increasing pipeline which may potentially accelerate, GST-cut driven, potential acquisition in the works are all going to contribute to Lemon Tree Hotels' topline growth.

Macquarie hiked revenue estimates by 1% for financial year 2026, and by 3% for financial year 2028. Meanwhile, it reduced the revenue estimate by 1% for the financial year 2027. After the revision,Macquarie sees Lemon Tree Hotels' revenue growing at 13% CAGR during the financial year 2025 and 2028.

Tourism destination development announcement, updates on Fleur divestment, and revenue per available room improvements at Aurika are going to be key things monitorable for the brokerage.