'Buy' Lemon Tree, Chalet Among Others Lists Yes Securities In Hospitality Sector; Q2 Results Preview

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Yes Securities Report

Q2 FY26 is expected to be a mixed bag for Indian hospitality sector as travel disruptions caused by heavy monsoons amid a seasonally weak quarter likely have led to a marginal occupancy dip at an industry level.

However, sustained average daily rate growth and a sequential recovery from demand disruption seen in May-June’25 has been a silver lining. Meetings, Incentives, Conferences, and Exhibitions demand has shown signs of recovery with robust corporate travel in Q2, which sets the stage for strong H2 FY26.

We believe heavy monsoons to have impacted domestic leisure travel demand in Q2, coupled with seasonally leaner period for FTAs. This is expected to be partially offset by sustained momentum in business / metro destinations, led by robust MICE demand and demand spikes during long weekends.

Hence, we expect companies with higher presence into tier-1 / metro destinations to deliver better performance in Q2 FY26, compared to companies with higher mix of leisure portfolio.

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