Lemon Tree Hotels Limited – Investor Presentation Summary

Key Operational Highlights

  • Total operational inventory stands at 131 hotels with 11,811 rooms as of 31st March 2026.
  • Combined operational and signed pipeline inventory is 22,581 rooms across 268 hotels.
  • In FY26, opened 20 managed and franchised hotels with 1,523 rooms.
  • Signed 55 managed and franchised hotels with 4,912 rooms in FY26.
  • Gross Average Room Rate (ARR) for FY26 stood at ₹6,875, the highest ever reported.
  • Occupancy for FY26 was 73.5%, the highest ever reported for a full financial year.
  • Key drivers: Strong demand in mid-market segment, price hikes/ARR growth, and expansion of managed/franchised portfolio.

Segment-wise Performance

  • Aurika Hotels & Resorts (808 rooms): Q4 FY26 RevPAR ₹8,975 (up 3% YoY), Occupancy 81%, EBITDAR Margin 70%.
  • Lemon Tree Premier (1,603 rooms): Q4 FY26 RevPAR ₹7,232 (up 7% YoY), Occupancy 85%, EBITDAR Margin 60%.
  • Lemon Tree Hotels (1,769 rooms): Q4 FY26 RevPAR ₹5,569 (up 9% YoY), Occupancy 80%, EBITDAR Margin 51%.
  • Red Fox by Lemon Tree Hotels (643 rooms): Q4 FY26 RevPAR ₹3,574 (up 6% YoY), Occupancy 76%, EBITDAR Margin 57%.
  • Keys by Lemon Tree Hotels (936 rooms): Q4 FY26 RevPAR ₹2,910 (up 16% YoY), Occupancy 64%, EBITDAR Margin 44%.
  • Significant changes: Keys brand showed strongest RevPAR growth at 16% YoY; Lemon Tree Premier achieved highest occupancy at 85%.

Financial Highlights

Revenue: Rs. 1,452.7 Crore (FY26)

EBITDA: Rs. 699.3 Crore (FY26)

PAT: Rs. 288.3 Crore (FY26)

EPS: Not Specified

Margins: EBITDA Margin 48.1% (FY26), PAT Margin 19.8% (FY26)

YoY comparison: Revenue up 13%, EBITDA up 10%, PAT up 19%, Cash Profit up 16%

Drivers: Higher occupancy, ARR growth, expansion of managed portfolio

Comparison to market estimates: Not Specified

Key Risks: GST changes impacting margins, renovation expenditure, geopolitical tensions, aviation disruptions

Geographical Revenue Split

Domestic vs Export/Regional Revenue: Not Specified

Regional Breakdown (Q4 FY26 for owned hotels):

  • Delhi (636 rooms): RevPAR ₹7,943 (up 11% YoY), Occupancy 89%
  • Gurugram (529 rooms): RevPAR ₹4,929 (down 1% YoY), Occupancy 76%
  • Hyderabad (663 rooms): RevPAR ₹6,761 (up 10% YoY), Occupancy 80%
  • Bengaluru (874 rooms): RevPAR ₹4,237 (up 14% YoY), Occupancy 68%
  • Mumbai (972 rooms): RevPAR ₹8,148 (up 2% YoY), Occupancy 83%
  • Pune (426 rooms): RevPAR ₹5,073 (up 14% YoY), Occupancy 83%
  • Rest of India (1,659 rooms): RevPAR ₹4,696 (up 7% YoY), Occupancy 76%

Balance Sheet Snapshot

Net Debt/Equity: Not Specified

Reserves: Rs. 1,391.9 Crore (FY26, up 20% YoY)

Current Assets/Liabilities: Current Assets Rs. 428.6 Crore (FY26), Current Liabilities Not Specified

Working Capital/Leverage Metrics: Total Debt Rs. 1,500.3 Crore (down 12% YoY)

Financial Health Insights: Reduced borrowings from ₹1,699 crores to ₹1,500 crores YoY; cost of debt fell to 7.42% (down 115 bps YoY)

Capex & Cash Flow Health

Capital Expenditure: Not Specified for overall company; for owned hotels under development: ~₹82 Cr already deployed for 91 rooms (FY27 opening), ~₹23 Cr already deployed for 165 rooms (FY28 opening)

Free Cash Flow: Not Specified

Operating Cash Flow: Not Specified

Net Debt Movement: Reduced by ₹199 crore YoY

Investment Rationale: Renovation of owned hotel portfolio, technology investments, development of new owned/leased hotels

Strategic & R&D Initiatives

Investments in Innovation: Significant investment in technology platforms; renovation expenditure for upgrading owned portfolio; development of Aurika brand for future supply

Expected impact: GST impact expected to decrease as customer base paying below ₹7,500 reduces; renovation and tech expenses expected to reduce to ~3.7% of revenue by FY28

Strategic Rationale: Creating two focused platforms - asset-light Lemon Tree and asset-owning Fleur Hotels; expanding into upper upscale segment with Aurika brand

Industry Trends & Business Environment

Macro/Industry Trends: Demand consistently outpacing supply in mid-market segment; favorable structural position for Indian hospitality market

Impact on Company: Benefiting from strong demand environment driving occupancy and ARR growth

Management Commentary & Growth Outlook

Strategic Outlook: Executive Chairman stated FY26 was "best year in Lemon Tree's history" despite global headwinds

FY Guidance: Expect renovation, tech, and GST-related expenses to reduce to ~3.7% of revenue by FY28, leading to margin expansion

Market Share Targets: Not Specified

Risks and Opportunities: GST change impact, renovation expenditure, geopolitical tensions highlighted as headwinds; strong demand environment and restructuring seen as opportunities

Corporate Restructuring Update

  • Warburg Pincus purchasing APG's ~41% stake in Fleur Hotels
  • Demerger scheme to create two separate entities: Lemon Tree Hotels (asset-light management) and Fleur Hotels (asset ownership)
  • Effective ownership in Fleur for public shareholders increases from 45.8% to 57.5% post-scheme
  • Expected to be value-accretive with total attributable EBITDA increasing by 8%+
  • Scheme requires approvals from shareholders, creditors, stock exchanges, SEBI, NCLT, CCI
  • Appointed date for scheme: 1 April 2026