Lemon Tree's Q2 FY27 result was in-line with the brokerage's estimates on net sales and EBITDA, while PAT was above our forecast owing to exceptional gain of Rs 221 million. The management reaffirmed historical guidance for full-year seasonality, projecting second-half operations to deliver approximately 55% of full-year consolidated revenues and 60% of full-year consolidated EBITDA, supported by favorable wedding, retail, and corporate MICE demand cycles across major commercial centers.
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IDBI Capital Report
IDBI Capital has broadly maintained its earnings estimates for FY27E/FY28E and maintain Buy on Lemon Tree Hotels Ltd. rating on the stock with a target price of Rs158, assigning 15 times EV/EBITDA to FY28E.
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The brokerage continues to like the company amongst the mid-scale hotels segment given its scale of operations and better operating margin compared to other mid-scale hotels.
Further, the managements' robust outlook on inventory addition and balance sheet strengthening through debt repayment is encouraging. IDBI Capital believes Lemon Tree is poised to deliver consistent earnings growth in near future.
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Lemon Tree's Q2 FY27 result was in-line with the brokerage's estimates on net sales and EBITDA, while PAT was above our forecast owing to exceptional gain of Rs 221 million. The management reaffirmed historical guidance for full-year seasonality, projecting second-half operations to deliver approximately 55% of full-year consolidated revenues and 60% of full-year consolidated EBITDA, supported by favorable wedding, retail, and corporate MICE demand cycles across major commercial centers.
The operational footprint expanded to 12,131 rooms across 138 hotels by adding 8 managed properties (523 rooms) and deflagging 5 non-compliant hotels (338 rooms) in Q2 FY27; the total pipeline reached 11,930 keys across 147 hotels, bringing total inventory to 24,061 keys.
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