Lemon Tree Hotels Receives ‘Buy’ Call from JM Financial with Significant Upside Potential

Synopsis: Shares of Lemon Tree Hotels may remain in focus after brokerage firm JM Financial maintained a ‘Buy’ rating on the stock with an upside potential of around 44% from current levels. The brokerage remains constructive on the company, citing strong domestic travel demand and healthy operating momentum.

India’s hospitality sector has emerged as one of the stronger consumption themes in recent years, supported by rising leisure travel, business mobility, weddings, and increasing preference for organised hotel chains. Within this space, mid-market players are also attracting attention as domestic demand remains resilient across business and leisure categories. 

Among these names, Lemon Tree Hotels has remained in focus due to its expanding presence across key cities and its positioning in the mid-priced and upscale hotel segment, and brokerage firm JM Financial maintained a Buy rating on Lemon Tree Hotels with an upside potential of around 44%, citing stronger same-store growth, lower dependence on foreign travel demand, and continued expansion visibility.

With a market capitalisation of around ₹9,745 crores, the shares of Lemon Tree Hotels are trading at ₹123 levels in today’s market session, up 1.15% from its previous day close of ₹121.60 a piece. It has delivered a total return of 283.59% over a period of 5 years.

The Upside Rating Rationale

Brokerage firm JM Financial has maintained its positive stance on Lemon Tree Hotels and assigned a target price of ₹165 per share, implying an upside potential of around 44% from current levels.

Highest Same-Store Growth Expectations: One of the key reasons behind the positive outlook is the company’s expected operating performance. According to the brokerage, Lemon Tree is likely to report the highest same-store RevPAR growth of 9% among the hotel companies under its coverage, as it captures both occupancy and room pricing strength.

Domestic Demand Advantage: Another factor highlighted by the brokerage is Lemon Tree’s lower dependence on foreign tourist arrivals. In periods of global uncertainty or international travel disruptions, companies with stronger domestic exposure may remain relatively better placed.

Strong Business Positioning: Lemon Tree has built a strong brand presence across mid-market, upper midscale, and upscale categories. The company operates hotels across metro cities, business hubs, and tourist destinations, helping it diversify demand sources. Its focus on value-driven hospitality also gives it exposure to a wider customer base compared to luxury-focused operators.

Investor Insight

The brokerage’s positive outlook highlights how the market is increasingly focusing on hospitality companies with strong domestic demand exposure, scalable portfolios, and improving operating metrics. In Lemon Tree’s case, its presence across mid-market and business travel segments positions it to benefit from rising travel activity, corporate movement, and organised hotel demand in India.

Going forward, key factors to watch would include occupancy trends, room rate growth, margin recovery after renovation-related costs, and the pace of new property additions. Sustained improvement in these metrics could play an important role in shaping sentiment toward the stock and the broader midcap hotel space.

Company Overview and Financial Insights 

Lemon Tree Hotels is one of India’s leading hotel chains with a strong presence in the mid-market, upscale, and economy hospitality segments. The company operates well-known brands such as Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, and Keys Prima, catering to business and leisure travellers across the country. With a portfolio spanning 259 hotels and 21,942 rooms across 150+ locations, Lemon Tree has established itself as a prominent player in India’s organised hospitality space.

The company’s revenue rose by 14% from ₹355 crores in December 2024 to ₹406 crores in December 2025. Meanwhile, the reported EBITDA rose from ₹184 crores to ₹205 crores in the same period. The company demonstrates decent financial performance with a ROCE of 13.0% and a ROE of 18.4%, indicating efficient capital utilisation and decent returns for shareholders.

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