In This Article:
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Lemon Tree Hotels Ltd (BOM:541233) recorded its highest ever third quarter revenue at 355.8 crores, marking a 22% growth year-on-year.
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The company's profit after tax increased by 82% year-on-year to 79.9 crores.
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Occupancy rates improved significantly, reaching 74.2%, an increase of 826 basis points year-on-year.
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The company signed 13 new management and franchise contracts, adding 766 new rooms to its pipeline.
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Lemon Tree Hotels Ltd (BOM:541233) received a letter of award for a significant redevelopment project in Shillong, which includes capital subsidies and incentives.
Negative Points
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The company anticipates continued renovation expenses into FY 526 and FY 527, which may impact short-term profitability.
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Standalone performance showed only a 2% revenue increase, with profit after tax down by 16% year-on-year.
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There are concerns about potential slippages in converting signed hotels to operational status due to funding issues by owners.
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The company faces competition from new hotel openings in key markets like Mumbai, which could impact growth.
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Renovation of the Keys Hotels portfolio is ongoing, which may temporarily affect occupancy and revenue generation.
Q & A Highlights
Q: Can you provide insights on the expected RevPAR for Oria Mumbai in FY26 and the potential for more Oria branded hotels in your portfolio? A: Oria Mumbai's occupancy was in the early 70s with an ARR over 9,000 in Q3. We aim for stabilization at 85% occupancy and an ARR of 11,000-12,000 by H2 next year. Oria is part of our strategy, and we are close to signing a long lease for an Oria in Varanasi. We are also exploring management contracts for more Oria hotels. (Chairman and Managing Director)
Q: With new hotels opening in the Mumbai Airport micro market, do you see challenges in achieving growth beyond the 12,000 ARR target? A: Despite new supply, I believe the market will absorb it, similar to what happened in Delhi Aero City. Temporary blips may occur, but they won't significantly affect RevPAR in the long term. (Chairman and Managing Director)
Q: Given your goal of expanding to 20,000 rooms by 2027, do you foresee any operational challenges? A: We are confident in reaching 20,000 rooms in the next 12-15 months. The only concern is potential slippages from owners not completing hotels on time. However, demand from asset owners is strong, and we expect to exceed this target. (Chairman and Managing Director)