LEMONTREE

Investment & CapEx

Lemon Tree Hotels: Key Updates & Outlook 1. Current Financial Strength Lemon Tree has shown good revenue growth recently. Their EBITDA margins are improving, which means they’re getting more efficient. Occupancy (in its hotels) is improving, and average room rates are increasing. In Q1 FY26, they reported a strong YoY growth in revenue — a good sign for demand recovery. 2. Expansion Plans They are very ambitious: targeting 30,000–35,000 rooms by 2030, which would give them around 10% market share in the Indian hotel industry. They recently signed two new properties in Ayodhya and Guwahati, which shows they’re expanding in growth markets. Their subsidiary Fleur Hotels is becoming more important; they plan to spin it off/list it, which could unlock value. 3. Investment & CapEx Lemon Tree is spending a significant amount on renovating its “Keys” portfolio — this is expensive, and in the near term, it could compress margins. This renovation cost is currently around 6% of revenue, but once done, they expect the cost to fall to ~2–2.25% of revenue. The major renovation is expected to complete by around October 2026 for many rooms. 4. Strategic Land Deal Their Fleur Hotels subsidiary won a 2-acre land parcel in Nehru Place (Delhi) under a long-term license — they plan a large 5-star Aurika hotel there. This could be a very high-value asset, if executed well.