Lemon Tree Hotels (LEMONTREE) Q2 24/25 earnings summary

Executive summary

• Achieved highest-ever Q2 revenue at INR 284.8 crores, up 24% year-on-year, with net EBITDA up 25% and margin at 46.1% (up 53 bps year-on-year).

• Gross ARR rose 12% year-on-year to INR 5,902; RevPAR increased 7% to INR 4,035; occupancy declined by 328 bps to 68.4% due to renovations and new property ramp-up.

• Signed 19 new management/franchise contracts (1,373 rooms) and operationalized 5 hotels (193 rooms); total inventory now 112 hotels with 10,318 rooms and a pipeline of 75 hotels with 5,220 rooms.

• Debt reduced by INR 90 crores to INR 1,822.6 crores as of September 2024; cash profit for Q2 was INR 69.8 crores, up 43% year-on-year.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, with statutory auditor review completed and filed with stock exchanges.

Financial highlights

• Revenue from operations at INR 284.4 crores, up 24% year-on-year and 6% sequentially; Net EBITDA at INR 131.2 crores, up 25% year-on-year and 14% sequentially.

• PAT at INR 35 crores, up 33% year-on-year and 74% sequentially; cash profit at INR 69.8 crores, up 43% year-on-year and 28% sequentially.

• Total expenses increased 23% year-on-year to INR 153.6 crores; finance costs up 11% year-on-year.

• H1 FY25 revenue from operations at INR 552.4 crores, up 22% year-on-year; Net EBITDA at INR 246.6 crores, up 17%.

• Consolidated EBITDA for Q2 FY25 was INR 131.2 crores, up from INR 104.8 crores in Q2 FY24.

Outlook and guidance

• Confident in sustaining growth, driven by Aurika Mumbai Skycity stabilization, expansion of management/franchise portfolio, and completion of renovations.

• Renovation expenses to continue into FY 2026, then normalize to 1.5%-1.6% of revenue.

• Expecting revenue growth north of 15% and EBITDA growth north of 20% year-on-year for October and November.

• Results are not indicative of full-year performance due to the seasonal nature of the Indian hotel industry.

• Expects demand growth to outpace supply in coming years, supported by structural tailwinds in branded room consumption.