LEMONTREE

Strong Q1, Strategic Restructuring for Future Growth

delivered a strong Q1 FY26 performance, with revenues growing 18% year-on-year (YoY). The company's profitability saw a significant boost from higher occupancies and improved room rates. Looking ahead, LMNT is strategically restructuring its business to fuel its next phase of growth. Revenue per available room (RevPAR) from owned and leased properties increased by 12% YoY. Occupancies rose by approximately 600 bps, driven largely by its new Aurika, Mumbai property. Average room rates grew by about 6%, reflecting firm pricing in the industry. EBITDA margins improved by 160 bps YoY, and earnings almost doubled due to operating leverage and a reduction in debt. Expansion and Renovation: LMNT has a robust pipeline to add around 7,800 keys, with a substantial majority (7,500) coming from an asset-light management contract model. The company is actively renovating about 4,300 of its owned/leased rooms, with completion targeted for September 2025. This is expected to lead to a 15–20% increase in average room rates. Long-term, LMNT plans to scale its portfolio to 30,000–40,000 keys, focusing on the mid-market segment. Strategic Restructuring: Effective October 1, 2025, LMNT is implementing strategic leadership changes and plans to demerge Fleur Hotels, its asset-heavy subsidiary. LMNT will reposition itself as a brand and management contract company, pursuing aggressive, asset-light expansion. Fleur will raise funds through an IPO and focus on asset-heavy growth, with LMNT remaining a significant shareholder. This restructuring is a strategic move to optimize growth and strengthen its market position.