Lemon Tree Hotels Ltd

Overview

• Opened Lemon Tree Hotel, Bharuch, marking Gujarat's 12th operational property.
• Gujarat portfolio now 12 hotels; 20 more in the pipeline.
• 85 rooms and suites, Citrus Café, banquet and meeting facilities, fitness centre, spa.
• Hotel is managed by Carnation Hotels Private Limited, a Lemon Tree subsidiary.
• Located along the Narmada River with access to nearby hubs.
• Expansion supports an interconnected Gujarat network for business and leisure travellers.

Financial Performance

• Total revenue Rs 346.8 crore, +9% YoY, Q1 FY27
• Net EBITDA Rs 151.9 crore, +7% YoY; adjusted Rs 162.5 crore, +14%
• PAT Rs 57.3 crore, +19%; cash profit Rs 96 crore, +17%
• Gross ARR Rs 6,361 crore, +2% YoY
• Occupancy 75.7%, +314 bps YoY
• Net EBITDA margin 43.8%, down 99 bps vs Q1 FY26
• Gross debt Rs 1,475 crore as of 30 Jun 2026; cost of debt 7.48%

Operating Update

• Asset-light: opened 6 managed/franchised hotels (334 rooms) in Q1 FY27; signed 13 hotels (1,020 rooms)
• Inventory: 23,381 rooms across 279 hotels in 170+ cities; 11,946 rooms across 135 hotels operational
• Network revenue Rs 576 crore; owned hotels Rs 320 crore; managed/franchise Rs 256 crore
• Keys RevPAR up 19% YoY to Rs 2,885; occupancy 67%; ARR Rs 4,311
• Aurika/Keys renovation: 300 rooms renovated this quarter; ~Rs 10 crore spent; similar in next quarter

Balance Sheet and Cash Flow

• Gross debt Rs 1,475 crore as of 30 Jun 2026; cost of debt 7.48%
• Pro forma cash position for Lemon Tree and Fleur ~ Rs 200 crore (excluded from debt base)
• Fleur debt ~ Rs 1,100–1,200 crore; Warburg infusion ~ Rs 960 crore; group debt relaxed accordingly

Projects and Capex

• Q1 renovation spend ~Rs 9.8 crore; ~2.25–2.3% of revenue; normal run-rate ~1.0–1.2%
• High-value renovations largely complete (Keys Pimpri, Whitefield); per-key cost ~Rs 4–5 lakh
• Remaining Keys renovations: Kochi, Trivandrum, Vizag; ~Rs 4–5 lakh per key
• Portfolio renovation to finish by FY27; thereafter normalization; ~1.2% of revenue annually

Guidance and Outlook

• Demerger completion targeted in calendar year 2027; Fleur listing in the first half of 2027
• Pursuit of ~2,500 Keys; expect to achieve in the coming quarters
• Long-term EBITDA margin target 75–80% for Lemon Tree over 3–4 years
• Fleur ROCE target around 15%; Lemon Tree ROCE to be meaningfully higher
• Fleur debt-to-EBITDA expected around 2x; group strategy balanced to sustain growth
• International expansion: focus on markets 3 hours from India (UAE, Nepal, Thailand, Maldives)

Q&A Highlights

• ARR strategy: Q1 ARR +2%; pivot to volume to fill rooms; Q2 onward to restore ARR growth
• 2,000 Keys openings in FY27 on track; minor slippage possible but overall outlook positive
• Mumbai/Aurika pricing: pricing power to recover; Q2 expected to show improvement
• Demerger timeline: SEBI/CCI process underway; completion targeted in H1 FY27; listing thereafter
• Warburg investment: Rs 960 crore; Fleur valuation fixed at USD 1 billion; post-structure changes
• International markets: UAE, Nepal, Thailand, Maldives to monetize loyalty program and expand reach

Deal and expansion

• Lemon Tree Hotels signs license for Lemon Tree Premier Visakhapatnam; managed by Carnation Hotels Private Limited.
• 110-room hotel includes restaurant, banquet hall, meeting room, fitness center, swimming pool, and spa.
• Third property in Visakhapatnam and thirteenth in Andhra Pradesh; six operational, seven upcoming in AP.
• Expands footprint in Andhra Pradesh; connectivity to Visakhapatnam airport ~39 km from the property.

Meeting Details

• Date: August 19, 2026; One-on-One/Group; Physical; Mumbai; Organized by Motilal Oswal Financial Services.

Participants

• Company management will attend the meeting.

Purpose

• Participation in investor conference; discussions to be based on publicly available information; no UPSI to be shared.

Additional Notes

• Schedule subject to change due to exigencies.

Meeting Details

• Dates: August 17–18, 2026; location: Singapore; mode: physical one-on-one/group meetings.
• Organized by Ambit Capital Private Limited (Ambit-Daiwa India Access–Singapore).
• Participants: Company management to attend the Investor Conference.
• Purpose: Analyst/Investor Meet; discussions to rely on publicly available information.

Event

• Two license agreements signed: Lemon Tree Premier, Madurai and Keys Select by Lemon Tree Hotels, Mcleodganj.

Property details

• Madurai property to feature 100 rooms, restaurant, banquet, meeting room, pool, and fitness center.
• Mcleodganj property to feature 45 rooms, restaurant, meeting room, pool, and fitness center.

Portfolio expansion

• Tamil Nadu portfolio expands to eight hotels (five operational, three upcoming).
• Group operates 130+ hotels across 80+ cities.

Management and strategy

• Commentary highlights deepening footprint in South India's high-potential urban markets.
• Properties will be managed by Carnation Hotels Private Limited, a wholly owned subsidiary.

Location connectivity

• Madurai site connected to Madurai Airport (14 km) and railway station (3 km).
• Mcleodganj site ~24 km from Kangra Airport and ~90 km from Pathankot Railway.

Meeting Details

• Date: August 10, 2026; group virtual investor conference call.

Participants

• Key company participant: Company Secretary & Compliance Officer.

Purpose

• Discuss unaudited Q1 FY27 results with analysts/institutional investors.

Availability

• Audio recording of the conference call uploaded on the company website.

Financial results approved

• Unaudited standalone and consolidated results for quarter ended June 30, 2026 approved, with Limited Review Report.

Leadership & governance

• Keswani appointed Chairman and Non-Executive Director from April 1, 2027, subject to shareholder approval.
• Current tenure as Chairman and Executive Director ends March 31, 2027.

Strategic investments and JV

• Joint venture with RJ Corp for Arum Hotels SPV; Carnation 51%, RJ Corp 49%.

Regulatory actions and approvals

• Composite Scheme of Arrangement approved by CCI; awaiting other statutory approvals.
• Scheme appointed date: April 1, 2026; becomes effective on receipt of approvals.
• Trading window opens 48 hours after declaration of June 30, 2026 results.