Lemon Tree Hotels has gained attention from analysts following a positive brokerage recommendation that highlights significant upside potential amid favorable sector dynamics and strategic restructuring plans.

Brokerage Recommendation and Target Price

ICICI Direct has issued a 'Buy' recommendation for Lemon Tree Hotels with a target price of ₹185.00. This target represents a potential upside of approximately 38% from the stock's closing price of ₹134.30, reflecting analyst confidence in the company's growth prospects and improving sector outlook.

Strategic Restructuring Initiative

The company has announced a comprehensive restructuring plan involving Lemon Tree Hotels Limited and Fleur Hotels, designed to unlock shareholder value through the creation of two focused entities. Under this arrangement, existing shareholders will receive 20 Fleur shares for every 311 LTHL shares, while Warburg Pincus will acquire a 41.09% stake in Fleur. The new entity is expected to list within 15 months of the restructuring completion.

Post-restructuring projections indicate that LTHL will transform into a debt-free, asset-light platform with ambitious expansion plans:

Financial Performance

Lemon Tree Hotels demonstrated steady growth in Q2FY26, showcasing resilience in a challenging operating environment. The company's financial metrics reflect consistent performance across key indicators.

Sector Fundamentals and Growth Pipeline

India's hotel and resort sector continues to benefit from robust domestic tourism and rising demand patterns. In FY2025, the sector achieved significant milestones with room inventory reaching approximately 2.03 lakh units, compared to 1.88 lakh in the previous period. Occupancy rates approached 71% while Average Daily Rates (ADR) climbed to ₹8,000.00, contributing to sector revenue expansion of roughly ₹906 billion.

The company maintains a strong expansion pipeline with over 9,400 rooms planned from third-party owners, alongside substantial owned inventory development. New Aurika properties in Shimla, Shillong, and New Delhi are expected to add operational scale, while active discussions for 2,500+ additional rooms strengthen long-term expansion visibility across the company's brand portfolio.

Market Positioning and Geographic Presence

Lemon Tree Hotels has established a comprehensive pan-India footprint across major business hubs and high-growth air corridors. The portfolio concentrates in key metropolitan areas including Delhi, Bengaluru, Mumbai, and Hyderabad, positioning the company to benefit from rising air traffic and office space absorption trends in these markets.

Lemon Tree Hotels Limited has announced the signing of a new property in Uttar Pradesh, expanding its footprint in the state's hospitality sector. The company disclosed the signing of Keys Select by Lemon Tree Hotels, Chitrakoot, under a license agreement on January 20, 2026, as per regulatory filing under SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

Property Management and Operations

The Chitrakoot property will be managed by Carnation Hotels Private Limited, a wholly-owned subsidiary of Lemon Tree Hotels Limited. This management structure aligns with the company's operational model for expanding its presence across key markets in India.

Hotel Features and Amenities

The new property will offer comprehensive hospitality services designed to cater to both religious and leisure travelers visiting the spiritually significant destination. The hotel's amenities are structured to provide a complete guest experience with modern facilities.

Strategic Location and Connectivity

Keys Select by Lemon Tree Hotels, Chitrakoot is strategically positioned in the town situated on the banks of the Mandakini River, known for its religious significance as the place where Lord Rama, Sita, and Lakshmana spent years of their exile. The location offers excellent connectivity through multiple transportation modes.

The property benefits from proximity to key transportation hubs:

• Chitrakoot Airport: 10 kilometers
• Prayagraj Airport: 105 kilometers
• Chitrakutdham Karwi Railway Station: 5 kilometers

The hotel enjoys good connectivity through both public and private transport networks, enhancing accessibility for guests.

Market Expansion in Uttar Pradesh

According to Mr. Vilas Pawar, CEO - Managed & Franchise Business, Lemon Tree Hotels, this signing represents the company's commitment to expanding its religious and leisure portfolio. The property targets pilgrims and travelers seeking spiritual reflection and connection with India's heritage. The company currently operates eight hotels in Uttar Pradesh with fourteen upcoming properties in the pipeline.

Company Profile

Lemon Tree Hotels Limited operates as one of India's leading hospitality companies with seven distinct brands: Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox, Keys Prima, Keys Select, and Keys Lite. The group operates 120+ hotels across 80+ cities in India and internationally, with a pipeline of 130+ upcoming properties. Since opening its first 49-room hotel in 2004, the company has expanded to 260+ properties (operational and upcoming) across metro cities and tier II & III markets, with international presence in Dubai, Bhutan, and Nepal.