Buy Lemon Tree Hotels, target price Rs 46: Motilal Oswal

Motilal Oswal has given a buy rating to Lemon Tree Hotels with a target price of Rs 46. The share price moved up by 2.37 per cent from its previous close of Rs 31.70. The stock’s last traded price is Rs 32.45.

Lemon Tree Hotels Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 2562.92 Crore) operating in Tourism & Hospitality sector.

Lemon Tree Hotels Ltd. key Products/Revenue Segments include Income from Rooms, Restaurants & Other Services which contributed Rs 212.98 Crore to Sales Value (79.00 % of Total Sales) and Other Operating Revenue which contributed Rs 56.60 Crore to Sales Value (20.99 % of Total Sales)for the year ending 31-Mar-2020.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 47.60 Crore, up 17.04 % from last quarter Sales of Rs 40.67 Crore and down -68.84 % from last year same quarter Sales of Rs 152.76 Crore Company reported net profit after tax of Rs -52.88 Crore in latest quarter.

Investment Rationale
The brokerage has a Buy rating on LEMONTRE with an FY23-based target price of INR46 (one-year forward EV/EBITDA multiple of 16x).

Promoter/FII Holdings
Promoters held 31.1 per cent stake in the company as of Sept 30, 2020, while FIIs held 18.5 per cent, DIIs 16.3 per cent and public and others 34.1 per cent.