Lemon Tree Hotels stock climbs 17% in 3 months after signing new property

Lemon Tree Hotels, one of India's most prominent hotel chains, has seen a notable surge in its stock price, climbing 17% over the past three months. This increase follows the company's recent announcement about the signing of a new property in Ujjain, which has sparked considerable interest among investors and market analysts alike.

On August 30, the company's shares rose by 1.5%, reaching Rs 135 each after news of its expansion plans broke. This development is significant because it compares favourably to the 12% rise of the benchmark Nifty 50 during the same period. Earlier in the year, on May 6, Lemon Tree's stock reached a 52-week high of Rs 158 per share.

Details of Lemon Tree's new Ujjain property

The new Lemon Tree property, expected to open in FY27, will be managed by Carnation Hotels Private, a wholly-owned subsidiary of Lemon Tree Hotels. It promises to offer 72 elegantly designed rooms and a range of amenities, including a restaurant, bar, swimming pool, and various public areas. Strategically located, the hotel is just 4 kilometres from Ujjain Railway Station and about 50 kilometres from Devi Ahilyabai Holkar International Airport in Indore, ensuring excellent connectivity through both public and private road transport.

Despite a 15% drop in consolidated net profit year-on-year in the June quarter, falling to Rs 19 crore from Rs 23 crore in the previous year, the company's revenue from operations saw a substantial rise. It jumped 19.52% year-on-year to Rs 268.02 crore in Q1FY25. However, EBITDA grew by 8.05% year-on-year to Rs 115.4 crore in Q1FY25, even as the EBITDA margin decreased to 43% from 47.6% a year ago.

Lemon Tree's expansive hotel portfolio

Lemon Tree Hotels is renowned for its broad portfolio, which spans various market segments from upscale to economy. The company operates over 160 hotels, including more than 100 operational hotels and over 60 properties slated to open in India and internationally.

The addition of the Ujjain property is expected to bolster Lemon Tree's already strong growth trajectory, making its stock an intriguing prospect for investors. For those looking to buy stock online, Lemon Tree Hotels offers a promising opportunity, especially in light of its strategic expansion plans and solid operational performance. As the hospitality sector continues to recover and expand, investing in a well-positioned company like Lemon Tree could be a savvy move.