Lemon Tree Hotels Limited

https://www.youtube.com/watch?v=vZE35FI3wxw

TEAM :- VAAYU Dated:

24 th
December, 2024

Disclaimer: This presentation is only for educational purpose. It is not an investment advice.
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 Evolution of the Company
Company Overview
 Lemon Tree Hotels (LTH) was incorporated on June 02, 1992. The Company is engaged in the business of developing, owning,
acquiring, renovating, operating, managing and promoting hotels, motels, resorts, and restaurants.

 LTHL opened its first hotel with 49 rooms in May 2004. Today, the company has a portfolio of 180+ hotels, which includes over 110
operational hotels and more than 70 hotels set to open in India and internationally. Lemon Tree Hotels are located across metro
regions, including the NCR, Mumbai, Kolkata, Bengaluru, Hyderabad and Chennai, as well as numerous tier I, II and III cities such
as Pune, Ahmedabad, Chandigarh, Jaipur, Indore, Aurangabad, Udaipur, Visakhapatnam, Kochi, Ludhiana, Thiruvananthapuram,
Vijayawada etc. The company expanded internationally with hotels opening in Dubai in December 2019, in Bhutan in February
2020 and in Nepal in April 2024.

 The company's Promoter, Mr. Patanjali Govind Keswani has approximately three decades of experience in the hotel and hospitality
industry. He has demonstrated ability to manage and grow its operations organically and also by acquiring and integrating hotels

 Due to the dynamic and evolving nature of Indian guests' expectations and based on its market research, it has created following
brands.
 `Lemon Tree Premier' which is targeted primarily at the upper-midscale hotel segment catering to business and leisure guests
who pay for premium.

 `Lemon Tree Hotels' which is targeted primarily at the midscale hotel segment catering to business and leisure guests and
offers a comfortable, cost-effective and convenient experience

 `Red Fox by Lemon Tree Hotels' which is targeted primarily at the economy hotel segment.

 ‘Keys Prima Hotels’ are sustainably designed upper-midscale hotels and resorts.

 ‘Keys Select Hotels’ are sustainably designed midscale hotels.

Vision and Missions
Product and Location wise Revenue Breakup
Company Snapshot
Growth Driver
Cont.
Operational Performance
Q-o-Q Performance
Company as on 30th September, 2024.
Lemon Tree 2.0 Roadmap to FY 2028
Company’s Presence
On a Lighter Note
Income Statement Yearly

Income Statement Analysis

COMPANY NAME >> LEMON TREE HOTELS LTD GROWTH TREND ANALYSIS
INR (in crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 TTM 9 YEARS 5 YEARS 3 YEARS
Sales 290 368 412 484 550 669 252 402 875 1,071 1,168 16% 14% 62%
Operating Profit 51 100 117 136 169 241 57 119 448 523 557 30% 25% 109%
Other Income 13 5 12 13 15 11 22 22 10 13 0% (3%) (16%)
EBITDA 64 105 128 149 184 252 79 141 457 536 27% 24% 89%
Interest (72) (72) (78) (78) (85) (162) (190) (181) (182) (208)
Depreciation (52) (52) (51) (53) (54) (92) (108) (104) (97) (112)
Profit before tax (PBT) (60) (19) (0) 18 45 (2) (219) (145) 178 216 219 (215%) 37% (200%)
Tax (3) (7) (5) (4) 11 (11) 32 7 (38) (34)
Profit after tax (PAT) / Net Profit (63) (26) (5) 15 56 (13) (187) (137) 141 182 152 (212%) 26% (199%)

Adjusted Equity Shares (in crores) 77.7 77.8 78.1 78.6 79.2 79.2 79.2 79.2 79.2 79.2

Sales Growth YoY (%) 26.7% 12.0% 17.5% 13.5% 21.8% (62.4%) 59.8% 117.5% 22.4%
EBIDTA Growth YoY (%) 64.4% 21.7% 16.4% 23.3% 36.7% (68.5%) 77.5% 224.9% 17.3%
PAT Growth YoY (%) n/m n/m n/m 287.5% (123.2%) n/m n/m n/m 29.3%

Price 0 0 0 0 81 22 37 63 77 131 n/m 10% 52%

Operating Profit Margin (OPM) % 17.6% 27.2% 28.3% 28.1% 30.7% 36.0% 22.8% 29.5% 51.2% 48.8% 47.7%
Net Profit Margin (NPM) % n/m n/m n/m 3.0% 10.3% n/m n/m n/m 16.1% 17.0% 13.0%
Tax Payout % (5.3%) (34.8%) (1451.5%) 20.6% n/m (499.1%) n/m n/m 21.2% 15.8%
Dividend Payout % n/m n/m n/m n/m n/m n/m n/m n/m n/m n/m
Interest Coverage Ratio (x) 0.2x 0.7x 1.0x 1.2x 1.5x 1.0x (0.1x) 0.2x 2.0x 2.0x
Earnings Per Share (EPS) (0.8) (0.3) (0.1) 0.2 0.7 (0.2) (2.4) (1.7) 1.8 2.3 (212%) 26% (199%)
PE Ratio (x) 0.0x 0.0x 0.0x 0.0x 113.3x (133.4x) (15.7x) (36.6x) 43.5x 56.9x
Income Statement Analysis - Quarterly

Income Statement Analysis - Quarterly

COMPANY NAME >> LEMON TREE HOTELS LTD GROWTH TREND ANALYSIS
INR (in crores) Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 QoQ (Sequential) QoQ (Yearly)
Sales 192 197 234 253 224 227 289 327 268 284 6% 25%
Operating Profit 88 94 126 140 106 102 140 171 115 131 14% 28%
Other Income 1 1 1 2 1 3 3 4 0 1 34% (80%)
EBITDA 88 95 127 142 107 105 142 175 116 131 14% 25%
Interest (43) (45) (44) (45) (48) (47) (53) (53) (52) (51)
Depreciation (25) (25) (24) (24) (23) (23) (33) (33) (35) (35)
Profit before tax (PBT) 21 25 59 73 36 35 56 89 29 45 55% 29%
Tax (7) (6) (11) (14) (9) (9) (12) (5) (9) (10)
Profit after tax (PAT) / Net Profit 14 19 49 59 28 26 44 84 20 35 74% 33%

Operating Profit Margin (OPM) % 45.6% 47.6% 54.2% 55.4% 47.5% 44.8% 48.4% 52.3% 42.9% 46.0%
Net Profit Margin (NPM) % 7.1% 9.8% 20.8% 23.4% 12.3% 11.6% 15.2% 25.7% 7.5% 12.3%
Tax Payout % 34.4% 22.5% 17.9% 19.6% 24.0% 24.7% 21.2% 5.6% 31.1% 22.6%
Interest Coverage Ratio (x) 1.5x 1.6x 2.3x 2.6x 1.8x 1.7x 2.0x 2.7x 1.6x 1.9x
Common Size Statement
Common Sizing Expenses
Year >> Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Raw material Expenses 10% 9% 8% 8% 8% 8% 7% 7% 0% 0%
Change in Inventory 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Power and Fuel Cost 12% 10% 9% 10% 10% 9% 13% 11% 8% 7%
Other Mfr. Exp 11% 11% 11% 10% 11% 8% 7% 8% 13% 14%
Employee Cost 27% 23% 24% 23% 22% 23% 28% 24% 17% 18%
Selling and Admin Expenses 22% 17% 19% 20% 18% 14% 20% 20% 11% 12%
Other Expenses 1% 3% 1% 1% 0% 2% 3% 1% 0% 1%
Operating Profit Margin (OPM) % 17.6% 27.2% 28.3% 28.1% 30.7% 36.0% 22.8% 29.5% 51.2% 48.8%

Common Size Balance Sheet

Year >> Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Equity Share Capital 41% 39% 35% 32% 28% 21% 21% 22% 21% 20%
Reserves 2% 1% 1% 1% 3% 5% 3% 1% 2% 4%
Borrowings 30% 31% 36% 41% 43% 54% 57% 59% 58% 58%
Other Liabilities 27% 29% 27% 26% 25% 20% 19% 19% 19% 18%
Total Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Fixed Assets (Net Block) 65% 61% 64% 59% 58% 88% 84% 84% 79% 90%
Capital Work in Progress (CWIP) 9% 13% 16% 23% 24% 5% 6% 8% 13% 1%
Investments 2% 0% 0% 1% 1% 0% 0% 0% 0% 0%
Other Assets 24% 25% 20% 17% 17% 7% 10% 8% 8% 9%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Other items as % of Total Assets

Receivables 1% 1% 1% 2% 3% 1% 1% 1% 2% 2%
Inventory 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Cash & Bank 2% 1% 1% 1% 1% 1% 4% 1% 1% 1%
Balance Sheet Analysis
Balance Sheet Analysis
COMPANY NAME >> LEMON TREE HOTELS LTD AVERAGE TREND

INR (in crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 9 YEARS 5 YEARS 3 YEARS

Equity Share Capital 776 778 781 786 789 790 790 791 792 792
Reserves 34 30 27 28 86 199 127 40 62 175
Borrowings 571 625 799 1,011 1,196 2,017 2,159 2,128 2,177 2,336
Other Liabilities 515 572 605 632 701 756 738 674 698 725
Total Liabilities 1,896 2,004 2,212 2,458 2,772 3,763 3,815 3,633 3,729 4,028

Fixed Assets (Net Block) 1,236 1,231 1,418 1,460 1,604 3,307 3,194 3,051 2,957 3,641
Capital Work in Progress (CWIP) 167 259 351 559 664 190 242 297 482 25
Investments 31 6 6 15 35 14 6 10 6 13
Other Assets 462 508 436 425 469 252 374 276 284 348
Total Assets 1,896 2,004 2,212 2,458 2,772 3,763 3,815 3,633 3,729 4,028

Receivables 18 24 31 53 84 50 31 29 56 71
Inventory 5 5 5 5 6 8 7 8 11 14
Cash & Bank 30 14 18 21 31 41 141 54 27 54
Working Capital (53) (64) (168) (208) (232) (504) (364) (398) (414) (377)
Capital Employed 1,381 1,433 1,607 1,826 2,071 3,006 3,077 2,959 3,031 3,303
Total Equity 810 808 809 815 875 989 918 831 854 967

Net Fixed Asset Turnover 0.3x 0.3x 0.3x 0.4x 0.3x 0.1x 0.1x 0.3x 0.3x 0.3x 0.2x 0.2x
Receivables Days 21 25 32 45 37 59 27 18 22 32 32 22
Inventory Turnover 72.1x 79.8x 93.8x 96.7x 94.3x 32.6x 52.4x 93.9x 87.9x 78.2x 72.2x 78.1x
Debt To Equity 0.7x 0.8x 1.0x 1.2x 1.4x 2.0x 2.4x 2.6x 2.5x 2.4x 1.8x 2.4x 2.5x
Return on average Equity (RoAE) (3.2%) (0.6%) 1.8% 6.7% (1.4%) (19.6%) (15.7%) 16.7% 20.0% 0.5% (0.0%) 7.0%
Return on average Capital Employed 3.8% 5.1% 5.6% 6.7% 6.3% (0.9%) 1.2% 12.0% 13.4% 5.9% 6.4% 8.9%
Du-Pont Analysis

DuPont Analysis
COMPANY NAME >> LEMON TREE HOTELS LTD
INR (in crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Sales 290 368 412 484 550 669 252 402 875 1,071
Profit before tax (PBT) (60) (19) (0) 18 45 (2) (219) (145) 178 216
EBIT (Operating Profit + Other Income - Depreciation) 12 53 77 97 130 159 (28) 36 361 424
Interest Expense (72) (72) (78) (78) (85) (162) (190) (181) (182) (208)
Income Tax (3) (7) (5) (4) 11 (11) 32 7 (38) (34)
Net Income (63) (26) (5) 15 56 (13) (187) (137) 141 182
Total Assets 1,896 2,004 2,212 2,458 2,772 3,763 3,815 3,633 3,729 4,028
Shareholders Equity 810 808 809 815 875 989 918 831 854 967

THREE STAGE MODEL

Net Profit Margin (Net Income ÷ Sales) (21.8%) (6.9%) (1.2%) 3.0% 10.3% (2.0%) (74.1%) (34.1%) 16.1% 17.0%
Asset Turnover (Sales ÷ Total Assets) 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.1x 0.1x 0.2x 0.3x
Equity Multiplier (Total Assets ÷ Shareholders Equity) 2.3x 2.5x 2.7x 3.0x 3.2x 3.8x 4.2x 4.4x 4.4x 4.2x
Return on Equity (7.8%) (3.2%) (0.6%) 1.8% 6.4% (1.3%) (20.3%) (16.5%) 16.5% 18.8%

FIVE STAGE MODEL

Tax Burden (Net Income ÷ PBT) 1.05 1.35 15.52 0.79 1.25 5.99 0.85 0.95 0.79 0.84
Interest Burden (PBT ÷ EBIT) (4.85) (0.36) (0.00) 0.19 0.35 (0.01) 7.73 (3.98) 0.49 0.51
EBIT Margin (EBIT ÷ Sales) 4.3% 14.4% 18.7% 20.0% 23.7% 23.8% (11.2%) 9.0% 41.2% 39.6%
Asset Turnover (Sales ÷ Total Assets) 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.1x 0.1x 0.2x 0.3x
Equity Multiplier (Total Assets ÷ Shareholders Equity) 2.3x 2.5x 2.7x 3.0x 3.2x 3.8x 4.2x 4.4x 4.4x 4.2x
Return on Equity (7.8%) (3.2%) (0.6%) 1.8% 6.4% (1.3%) (20.3%) (16.5%) 16.5% 18.8%

CHECK TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE
 Cash Flow Analysis

Cashflow Analysis
COMPANY NAME >> LEMON TREE HOTELS LTD GROWTH TREND ANALYSIS
INR (in crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 TOTAL 9 YEARS 5 YEARS 3 YEARS
Cash from Operating Activity (CFO) (51) 68 122 115 187 151 41 135 385 465
Cash from Investing Activity (CFI) (150) (103) (229) (260) (289) (598) (66) (45) (283) (397)
Cash from Financing Activity (CFF) 159 19 111 149 113 457 111 (163) (132) (59)
Net Cash Flow (CFO + CFI + CFF) (42) (16) 4 3 10 9 87 (73) (31) 10

Cash & Equivalent at the end of year 30 14 18 21 31 41 141 54 27 54

Profit After Tax (PAT) (63) (26) (5) 15 56 (13) (187) (137) 141 182 (38) (212%) 26% (199%)
Cash from Operating Activity (CFO) (51) 68 122 115 187 151 41 135 385 465 1,617 (228%) 20% 125%

CFO/PAT (atleast 80%) 81% (267%) (2376%) 787% 331% (1156%) (22%) (99%) 274% 256% (4295%)

CAPEX 140 329 302 303 1,321 46 17 188 339

Free Cash Flows (FCF) (72) (208) (188) (116) (1,170) (5) 119 197 126

Re-investment (Capex/CFO) 205% 271% 264% 162% 875% 113% 12% 49% 73%
FCF/CFO (79%)

Cash from Operating Activity (CFO) Working Capital and Tax Paid 51 Cr.
Cash from Investing Activity (CFI) Fixed Asset Purchsaed 331 Cr.
Cash from Financing Activity (CFF) Interest Paid 162 Cr., Financial Liabilities paid 39 Cr. Borrowing is at 141 Cr.
Ratio Analysis

Ratio Analysis
COMPANY NAME >> LEMON TREE HOTELS LTD
INR (in crores) Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 TTM
Operating Profit Margin (OPM) % 17.6% 27.2% 28.3% 28.1% 30.7% 36.0% 22.8% 29.5% 51.2% 48.8% 47.7%
Net Profit Margin (NPM) % n/m n/m n/m 3.0% 10.3% n/m n/m n/m 16.1% 17.0% 13.0%
Tax Payout % (5.3%) (34.8%) (1451.5%) 20.6% n/m (499.1%) n/m n/m 21.2% 15.8%
Dividend Payout % n/m n/m n/m n/m n/m n/m n/m n/m n/m n/m
Interest Coverage Ratio (x) 0.2x 0.7x 1.0x 1.2x 1.5x 1.0x (0.1x) 0.2x 2.0x 2.0x
Earnings Per Share (EPS) (0.81) (0.33) (0.07) 0.19 0.71 (0.16) (2.35) (1.73) 1.77 2.29
PE Ratio (x) 0.0x 0.0x 0.0x 0.0x 113.3x (133.4x) (15.7x) (36.6x) 43.5x 56.9x

Net Fixed Asset Turnover 0.3x 0.3x 0.3x 0.4x 0.3x 0.1x 0.1x 0.3x 0.3x
Receivables Days 21 25 32 45 37 59 27 18 22
Inventory Turnover 72.1x 79.8x 93.8x 96.7x 94.3x 32.6x 52.4x 93.9x 87.9x
Debt To Equity 0.7x 0.8x 1.0x 1.2x 1.4x 2.0x 2.4x 2.6x 2.5x 2.4x
Return on average Equity (RoAE) (3.2%) (0.6%) 1.8% 6.7% (1.4%) (19.6%) (15.7%) 16.7% 20.0%
Return on average Capital Employed 3.8% 5.1% 5.6% 6.7% 6.3% (0.9%) 1.2% 12.0% 13.4%

CFO/PAT (atleast 80%) 81% (267%) (2376%) 787% 331% (1156%) (22%) (99%) 274% 256%

FIVE STAGE MODEL - DUPONT ANALYSIS

Tax Burden (Net Income ÷ PBT) 1.05 1.35 15.52 0.79 1.25 5.99 0.85 0.95 0.79 0.84
Interest Burden (PBT ÷ EBIT) (4.85) (0.36) (0.00) 0.19 0.35 (0.01) 7.73 (3.98) 0.49 0.51
EBIT Margin (EBIT ÷ Sales) 4.3% 14.4% 18.7% 20.0% 23.7% 23.8% (11.2%) 9.0% 41.2% 39.6%
Asset Turnover (Sales ÷ Total Assets) 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.1x 0.1x 0.2x 0.3x
Equity Multiplier (Total Assets ÷ Shareholders
Equity) 2.3x 2.5x 2.7x 3.0x 3.2x 3.8x 4.2x 4.4x 4.4x 4.2x
Return on Equity (7.8%) (3.2%) (0.6%) 1.8% 6.4% (1.3%) (20.3%) (16.5%) 16.5% 18.8%
Projection

Revenue 17% 2023-24 FY 2025

OPM 49% Revenue 1071 1,253
Interest 209 OPM 49% 49%
Tax Rate 21% Operating Profit 525 614
Other Income 13 15 Scenario Analysis
Depreciation -112 -112 Bear Case Average Possitive Bull Case
Interest -209 -209 65% 75% 90% 100%
PBT 217 308 PAT 158 182 219 243
Tax % 16% 21% PE 40 45 50 55
PAT 182 243 Valuation 6326 8212 10950 13383
Valuation 12133 Downside/Upside 48% 32% 10% -10%
P/E 67 50
P/E Ratio

Median P/E for 10 years is 97.50 where as Current P/E is 80.00 and Industry P/E is 38.20.
Price is in uptrend due to perception/tailwind.
Market Cap to Sales

10 Years Median Market Cap to Sales is 10.20, where as current it is 10.40

Peer Comparison
Business Ranking

Business Ranking = 540

Stock Analysis
Shareholding Pattern

Promoter Stake has been 22.80 % with No Pledge.

SWOT Analysis
 M- Megatrends and Tailwinds
 Tailwind of Hospitality Industry

C – Competitive Advantages - Moat

 The company focuses on High Margin Product and spreading its wings in various geographies.

H- High Growth – High ROCE

 Due to Capex, Repayment of Debt and Improvement of margin , it is showing improvement .

I – Improvements
 Sales Revenue along with Sales Volume Growth .

N – New - Earnings Growth Drivers

 The company is shifting towards Premium Property where there is High Margin opportunity.

E- Execution in Earning Growth Triggers

 More Hotels are adding - various geographies.
A – Price Action Volume
Comparisons Vis-à-vis Nifty and Peers - Indian Hotel, Chalet Hotel, EI Hotel, Mahindra Holidays
Volume-Delivery

In last 9 week Appx 45 % trade is converted as Delivery, .

Number of Retail Shareholder has been increased from 2,81,003 (Sep 23) to 3,57,968 (Sep 24).
Management
Message from Management
Concall held on 18th November, 2024, with Mr. Patanjali Keswani, Chairman and Managing Director and Mr. Kapil Sharma, Chief Financial Officer

Business Highlights:
Revenue and EBITDA Growth: - Highest-ever Q2 revenue of ₹284.8 crores, a 24% YoY growth., Net EBITDA grew 25% YoY to a margin of 46.1%.,
Excluding renovation expenses, EBITDA margin would be around 49%.
Operational Metrics: : -Gross ARR: ₹5,902, up 12% YoY., Occupancy: 68.4%, decreased by 328 bps YoY due to renovations, RevPAR: ₹4,035, a 7% YoY
increase.
Debt Reduction: : - Net debt decreased by ₹90 crores to ₹1,822.6 crores., Target to become debt-free in 3–3.5 years, accelerated if Fleur Hotels is listed..
Expansion: : -Signed 19 new management/franchise contracts, adding 1,373 rooms to the pipeline, Operationalized 5 hotels, adding 193 rooms, Total
operational inventory: 112 hotels, 10,318 rooms, with a pipeline of 75 hotels and 5,220 rooms.

Renovation and Future Plans:

Renovation Impact: : -Renovations caused temporary occupancy drops (~9% inventory closed), FY26 renovation expenses will reduce; steady state
expenses will stabilize at 1.5%-1.6% of revenue.
Revenue and EBITDA Projections Post-Renovation : -Expect ARR and occupancy growth post-renovation, Incremental annual EBITDA of ₹125 crores
anticipated from renovations.
Focus Areas: : -High renovation spend in key markets like Delhi, Hyderabad, and Keys portfolio, Enhanced focus on pricing and demand in high-potential
areas.

Market and Segment Insights:

Wedding Segment: : - Strong performance in destination weddings at Aurika Udaipur and Mumbai,
Geographical Focus:, High potential in Delhi and Hyderabad due to strong demand and repricing opportunities.
Management Fee Income: : - Projected growth to ₹70 crores for FY25 due to seasonality and higher incentive fees.
Portfolio Strategy: : - Shifting focus to reduce dependence on IT sector hiring, particularly in Bangalore.

Specific Developments:
Aurika Mumbai : - Strong growth anticipated, targeting a balanced portfolio of retail, corporate, and crew business.,
Keys Portfolio : - Major renovations underway; full impact expected by FY27.
 ICRA Report as on 09th August, 2024
Financial Performance:
FY2024 Revenue and Profit: : - Revenue: ₹1,071.1 crore, a 22% YoY growth., Operating Profit Margin: ~49%. PAT: ₹181 crore, up from ₹139.7 crore in
FY2023.
Debt and Coverage Metrics: : - Debt (excluding lease liabilities): ₹1,889.1 crore as of March 2024. Total Debt/OPBDIT improved to 4.5 times from 4.9 times in
FY2023. Interest Coverage: Stable at 2.5 times.

Strategic Initiatives: : -
Portfolio Expansion: : - Total inventory: 104 hotels (9,863 rooms) as of March 2024, 42% of inventory under asset-light management contracts. Pipeline:
4,087 managed rooms across 62 properties.
Renovation and Upgrades: : - Significant renovations underway for selected properties, Enhanced ARR to ₹6,000 in FY2024 from ₹5,220 in FY2023.
Focus on Asset-Light Model: : - Aim to expand through management contracts to minimize capital requirements, Management fee income tripled to ₹50.1
crore in FY2024 compared to FY2022.

Operational Highlights:
Aurika Mumbai International Airport Hotel: : - Opened in Q3 FY2024; favorable location expected to drive growth, Stabilization anticipated to aid earnings.
Occupancy and ARR Trends : - Average Occupancy: 69% in FY2024 (up from 67% in FY2023). Positive market sentiment with increasing domestic and foreign
tourist arrivals.

Ratings and Outlook:

ICRA Ratings: : - Long-term Fund-based Term Loan: [ICRA]A(Positive). Short-term Instruments: [ICRA]A2+. Outlook revised to Positive due to sustained
operational improvement.
Future Projections:: - Expect continued growth in revenue and profitability with stabilization of new and renovated properties, Target to reduce debt
significantly in the medium term through healthy cash flows.

ESG and Sustainability:

Environmental Goals: : - Reduction in energy consumption by 15% and use of 50% renewable energy by FY2026, 40% reduction in greenhouse gas
emissions planned.
Social Commitments: : - Inclusive workforce initiatives: Target 15% women and 30% opportunity-deprived employees.
Investment Thesis

• Hospitality sector growth 10-12 % Y-oY .

• Large Scale MICE (Meeting, Incentives, Conferences and Event ) along with
Sector Growth
destination weddings.

 Co. has built a strong brand over the years, recognized for its service standards.
Company Growth  The company offers a different brands as per customers preferences.
 Improved Margin Product,.

 Looking for different geographies including overseas.

Future Growth  Coming up with new hotels .

• Experience Management.
Management • Management is focusing in innovation, branding to cater customer demand and
increase its base.
Key Risks or Anti-Thesis –

• Slowdown in the Indian economy or any global developments could

Economic slowdown
adversely impact growth in the short-term to medium term.

Competition Risks • Competitive field with large local and global majors.

• Changes in policy will affect the business, such as Environmental Policy,

Government Policy
work policy etc.

• Technology change and obsolesce is fast; Company needs to monitor

Innovation and
and upgrade their strategy and business model if required.
Execution Risks
Summary

• Lemon Tree Hotels Ltd has Brand Image, Reputation and Good Track
Record.
• Promoters holding is Approximately at 22.80% with no pledge till Sep
2024.
• Improving Financials and diversion of product portfolio.
• Company is increasing Fixed Assets as well reducing Debts which is in sync
with company’s core business model which will helpful in future.
• It presents a ideal opportunity in the Sector which is/will be growing with
Government Initiative.
Last but not the least
• Thank you for being here today, I really appreciate that you took the
time to be here and listen to the presentation.
• Any area of improvement kindly let me know, it will be helpful .