Lemon Tree Hotels Limited

Consumer Cyclical — Lodging · NSE

₹113.33+₹0.83 (+0.74%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Lemon Tree Hotels Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Lemon Tree Hotels Limited, together with its subsidiaries, owns, leases, operates, and franchises hotels in India. It offers accommodation and room, dining, bar, banquet, conference, meeting rooms, spa, fitness center, swimming pool, etc. hotel services.

IndustryLodging

SectorConsumer Cyclical

Employees6,104

Annual revenue₹1,319 Cr

How does it make money?

Turns over ₹1,319 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹53 left at the operating level before interest, tax and depreciation. Each of its 6,104 employees supports ₹21.6 lakh of revenue a year, the signature of a people-led business.

EBITDA margin53.1%

Net margin17.2%

Revenue / employee₹21.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 13.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE13.5%

ROE16.3%

Peer median ROE25.9%

What is the outlook?

20 analysts covering the stock expect revenue to grow about 11.4% and earnings to grow about 28.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.4%

Est. earnings growth+28.7%

Analysts20

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +57% while net margin moved +26% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+57%

Margin effect+26%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 38.2x already prices in growth
✓ P/E is 45% below its own historical median of 69.5x — cheap by its own standards
✗ P/B of 6.45x is a steep premium to book

Quality vs. Valuation

Company Quality

73/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

63/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

38.2x

3Y Median

69.5x

40 monthly readings · mean 68.4x · range 36.3x–105.4x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 45% below its 3y median of 69.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 45% below the peer median of 69.2x.

vs. its own history

Cheap

69.5x median over 40 months · -45%

vs. sector peers

Cheap

69.2x median of 4 peers · -45%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

38.2x

P/B

6.45x

EV/EBITDA

15.6x

PEG

1.49

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Cash generation is improving
Free cash flow is up 81% over 3 years.
Return on capital is rising
ROCE has improved from 10.6% to 13.5%.
Valuation below its historical average
At 38.2x the stock trades 45% below its own median of 69.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 108% against revenue growth of 57% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 high

🔴Receivables growing faster than salesFinancial
Receivables up 108% against revenue up 57% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 45% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 45% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 108% against revenue up 57%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 16.3% CAGR
Latest reported year was 9.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 51%✓ 53.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹403 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

11 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹8,974 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

38.2x

Fair

Fairly valued against the generic band

P/B Ratio

6.45x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹2.97

Profitable

Profitable on a per-share basis

ROE

16.3%

Strong

Strong capital efficiency

ROCE

13.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.96x

Moderate

Moderate leverage

Revenue Growth (YoY)

9.2%

Modest

Modest growth

Profit Growth (YoY)

20.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹403 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹113.33

P/E (Forward)

23.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

33.4%

Good

Healthy core-business profitability

Net Margin

15.8%

Good

Strong bottom-line conversion

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.13

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

108.6 / 107.9

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

70.6

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹839 Cr	₹1,013 Cr	₹1,202 Cr	₹1,319 Cr	+16.3%
EBITDA	₹452 Cr	₹531 Cr	₹642 Cr	₹701 Cr	+15.8%
EBITDA Margin	53.9%	52.4%	53.4%	53.1%	—
PAT (Net Profit)	₹115 Cr	₹148 Cr	₹197 Cr	₹227 Cr	+25.6%
EPS	₹1.45	₹1.88	₹2.48	₹2.87	+25.6%
ROE	13.4%	15.4%	16.9%	16.3%	—
ROCE	10.6%	11.4%	13.4%	13.5%	—
Total Debt	₹2,177 Cr	₹2,336 Cr	₹2,148 Cr	₹2,004 Cr	-2.7%
Free Cash Flow	₹223 Cr	₹134 Cr	₹446 Cr	₹403 Cr	+21.9%

🟢 Revenue has grown at 16.3% a year over 3 years.

🟢 EBITDA has grown at 15.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 53.1% over 3 years.

🟢 PAT (Net Profit) has grown at 25.6% a year over 3 years.

🟢 EPS has grown at 25.6% a year over 3 years.

🟢 ROE has risen from 13.4% to 16.3% over 3 years (+2.9 pts).

🟢 ROCE has risen from 10.6% to 13.5% over 3 years (+2.9 pts).

🟢 Total Debt has shrunk at 2.7% a year over 3 years.

🟢 Free Cash Flow has grown at 21.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,285 Cr

Total Liabilities

₹2,206 Cr

Total Debt

₹2,004 Cr

Cash & Equivalents

₹58 Cr

Operating Cash Flow

₹542 Cr

Capex

-₹138 Cr

Shareholding (proxy)

Institutional Holding

40.0%

Insider Holding

22.3%

Corporate Actions

Next Earnings

12 Nov 2026

Analyst Consensus

Recommendations

21 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹150.82

+33.1% vs CMP

Target Range

₹120 – ₹192

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

4 mixed2 general

Earnings Miss: Lemon Tree Hotels Limited Missed EPS By 17% And Analysts Are Revising Their Forecasts

Simply Wall Street, 12 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Lemon Tree Hotels shares rise 1.8% after Q1; brokerages bullish, see up to 46% upside

Moneycontrol.com, 11 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Lemon Tree Hotels shares gain 2% on Omaxe's pact for 4,000 hotel keys

Business Today, 16 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Lemon Tree Hotels Share Price gains on Darjeeling opening

Univest, 01 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Lemon Tree Hotels signs 52-room Keys Select property in Bareilly, Uttar Pradesh

CNBC TV18, 13 Oct

Omaxe, Lemon Tree ink pact to manage 10 upcoming hotels worth ₹4,000 cr

Business Standard, 16 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟢Business QualityStrong14.5/20

🟢Financial HealthStrong13.8/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong11.9/15

🟡ValuationFair7.9/15

🟡RiskModerate6/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 12% a year16.3% CAGR
✓EBITDA margin holds above 51%53.1%
✗Debt / EBITDA stays below 2x2.9x
✓Interest cover stays above 3x3.1x
✓Free cash flow remains positive₹403 Cr