Lemon Tree Hotels Limited (LEMONTREE) share price

₹110.05 on NSE as of 2026-10-08. -2.20% on the day. market cap ₹8,719 Cr. P/E 37.1. 52-week range ₹100.42 to ₹173.24. Consumer Services.

www.lemontreehotels.com

Lemon Tree Hotels Q1 FY27: Revenue ₹345 Cr, 13 Hotels Signed Against 6 Opened, and a Company Preparing to Split in Two

At a glance

Lemon Tree Hotels sells rooms, and also sells the right to hang its name over somebody else's rooms.

In the three months to June 2026 the company reported revenue of ₹345 crore. Operating profit was ₹149 crore and profit after tax ₹57 crore. The group ran 135 hotels and 11,946 rooms at the end of the quarter. Those sit across more than 80 cities and three markets outside India.

Occupancy at owned hotels reached 75.7%, a little over three percentage points higher than a year earlier. The average room rate rose 2% to ₹6,361, so guests arrived in greater numbers and paid roughly last year's price. Management attributes the flat rate to a deliberate shift towards retail bookings and online travel agents. Management also attributes the fall in operating margin, just under one percentage point, to two costs. One is a provision for Stock Appreciation Rights, a staff reward tied to the share price. The other is a loss of input credit under GST. Together they added about 3.1% of revenue in expenses, against nothing in the same quarter a year earlier.

Six managed and franchised hotels with 334 rooms opened in the quarter. Thirteen hotels with 1,020 rooms were signed. Management notes that signings run roughly 30 months ahead of openings.

The quarter sat inside a larger piece of corporate architecture. A composite scheme approved in January 2026 splits the company into a management platform and an asset-owning arm, Fleur Hotels.

The board met on 7 August 2026. It approved Patanjali Govind Keswani's move to Chairman and Non-Executive Director from 1 April 2027. It also approved a joint venture for Aurika Shillong, with Carnation holding 51% and RJ Corp 49%. Gross debt as on 30 June 2026 stood at ₹1,475 crore.

Introduction

Lemon Tree opened its first hotel in 2004 with 49 rooms. As on 30 June 2026 the group ran 135 hotels with 11,946 rooms. A pipeline of 144 properties and 11,435 rooms sits behind that. Together that comes to 279 hotels and 23,381 rooms, spread across more than 170 cities. One 49-room building has become a map dotted as far as Mhasrul, Limbodagari and Marpalle.

The company was incorporated in 2002 by Mr Patanjali Keswani. He joined the TATA Administrative Service in 1983 and spent 17 years with the TATA Group. He left as Senior Vice President of the Taj Group of Hotels. He then worked at A.T. Kearney before promoting Lemon Tree. The company listed on 9 April 2018.

Succession has been staged in instalments. Mr Keswani was Managing Director for 22 years. On 1 October 2025 he became Chairman and Executive Director. Mr Neelendra Singh was appointed Managing Director the same day, and Mr Kapil Sharma Executive Director and Chief Financial Officer. On 7 August 2026 the board approved his appointment as Chairman and Non-Executive Director from 1 April 2027. That is subject to shareholder approval and follows the end of his current 18-month tenure. The company says the change is to facilitate a comprehensive succession plan.

The larger structural event was announced on 9 January 2026. A composite scheme of arrangement is a reorganisation of a group that a tribunal must approve. This one has an appointed date of 1 April 2026 and moves 17 hotels into Fleur Hotels. Fifteen of them operate and two are under construction, and development capabilities move with them. Fleur is eventually to list on its own. The Competition Commission of India cleared the scheme on 7 April 2026. On 22 May 2026 Coastal Cedar, an affiliate of Warburg Pincus, bought APG's 41.09% stake in Fleur. That came with a committed ₹960 crore line of fresh equity. On 17 August 2026 ICRA, a credit-rating agency, upgraded the long-term rating to AA- with a stable outlook, from A+ with a positive outlook. ICRA upgraded the short-term rating to A1+ from A1 on the same date.

Business model

Lemon Tree rents rooms, and then rents out the right to call a room a Lemon Tree room. Both count as revenue; only one of them requires buying a building.

The brand ladder runs seven rungs deep. Aurika sits at the top with 2 hotels and 808 rooms. Lemon Tree Premier follows with 23 hotels and 2,963 rooms. The Lemon Tree Hotels brand itself has 75 hotels and 5,362 rooms. Red Fox has 9 hotels and 1,003 rooms. Below them sit the Keys trio of Prima, Select and Lite. In the three months to June 2026 Aurika's average daily room rate was ₹9,189. The Keys brands averaged ₹4,311, so one company sells a night's sleep at two prices barely on speaking terms.

Of 135 operating hotels, 34 are owned and 7 leased. The other 94 are managed or franchised. So 6,187 of the 11,946 rooms belong to somebody else entirely. ICRA, a credit-rating agency, notes that almost 51% of inventory was under management contracts as on 30 June 2026. That compares with 35% in March 2020. ICRA also notes management fee income of ₹73.9 crore in the year to March 2026, against ₹17.6 crore in the year to March 2022.

The year to March 2025 shows the revenue mix. Room rental was 75% and food and beverage 11%. Management fees came to 7.1% and other services 5%. Liquor and wine was 1.3% and banquet rentals 0.6%. Management has since stated that it has learned weddings and banquet revenue are a reasonable source of revenue. Indian hospitality has been saying that to itself since roughly 1970.

Distribution runs on Infinity Rewards, a loyalty programme with 2.4 million members. An in-house technology platform sits under Totally Foxed Solutions. Management puts online travel agents in the mid-to-late 30s as a share of room business. Management described the legacy technology stack as archaic.

The owned base concentrates in Mumbai with 972 rooms and Bengaluru with 874. Hyderabad has 663 rooms and Delhi 636. Gurugram has 529 and Pune 426. Another 1,659 rooms sit across the rest of India. Bhutan, Nepal and Dubai were entered on the stated principle of going where the customers go.

Quarterly results, balance sheet, cash flow, ratios, shareholding and the filings themselves are on the full page for Lemon Tree Hotels Limited.

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