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Prabhudas Lilladher Report
Lemon Tree Hotels Ltd.'s operational performance was better than estimates with Ebitda margin of 52.4% (our estimate: 49.7%), despite higher renovation expense and deflationary impact of Aurika, Mumbai, which opened in Oct-23, but is not yet stable.
Nonetheless, Aurika's Q4 FY24 KPIs are encouraging with occupancy of ~66% and ARR of Rs 9,000, and we expect revenues of Rs 2.4 billion/Rs 2.8 billion and Ebitda margin of 55%/60% in FY25E/FY26E, respectively.
Backed by the opening of Aurika, Mumbai, and expansion in managed room portfolio, we expect revenue/Ebitda compound annual growth rate of 18%/23% over FY24-FY26E.
We broadly maintain our estimates and retain ‘Buy' on the stock with a revised target price of Rs 155 (earlier Rs 153) valuing it at an enterprise value/Ebitda multiple of 23 times (no change in target multiple).
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