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Lemon Tree Hotels Gets 'Buy' Rating, Target Price Set at Rs 165

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  Published in Stocks and Investing on Wednesday, February 11th 2026 at 7:44 GMT by moneycontrol.com
      Locales: Maharashtra, Rajasthan, Karnataka, Tamil Nadu, INDIA

Mumbai, February 11th, 2026 - Lemon Tree Hotels continues to attract positive attention from financial analysts, with Prabhudas Lilladher reaffirming its 'Buy' rating and maintaining a target price of Rs 165 per share. This bullish outlook stems from a combination of factors, primarily a robust recovery within the hospitality industry and Lemon Tree's consistently strong operational performance. The report, released today, suggests investors should consider Lemon Tree Hotels as a promising opportunity within the Indian hospitality landscape.

For the past several years, the Indian hospitality sector has navigated a turbulent period marked by the COVID-19 pandemic and subsequent economic uncertainties. However, 2025 saw a significant rebound, fueled by pent-up travel demand, a strengthening economy, and a resurgence in both domestic and international tourism. Industry experts anticipate this positive trajectory to continue well into 2026 and beyond, creating a favorable environment for hotel chains like Lemon Tree.

Prabhudas Lilladher's analysis highlights that Lemon Tree is particularly well-positioned to capitalize on this recovery. The company's strategic focus on the mid-market segment, combined with its diversified portfolio of hotels across India, provides a strong foundation for sustained growth. Unlike luxury hotels which may be more susceptible to economic downturns, the mid-market segment tends to demonstrate greater resilience, attracting a broader range of travelers.

ARPR as a Key Indicator of Success

The brokerage report specifically points to the expectation of increasing Average Revenue Per Room (ARPR) as a crucial driver of Lemon Tree's future performance. ARPR is a vital metric in the hospitality industry, representing the average revenue generated from each available room. An increasing ARPR indicates stronger demand, higher occupancy rates, and potentially, increased pricing power for the hotel.

Lemon Tree has demonstrated a consistent ability to manage its ARPR effectively, even during challenging times. Their focus on providing value-for-money offerings without compromising on quality has resonated with travelers, allowing them to maintain healthy occupancy levels and command competitive rates. Experts suggest this commitment to a balanced approach will be key to driving further ARPR growth.

Expanding Footprint & Strategic Partnerships

Beyond the industry recovery and ARPR projections, Lemon Tree Hotels has been actively pursuing strategic initiatives to expand its footprint and enhance its offerings. The company has been steadily adding new hotels to its portfolio, focusing on key urban centers and popular tourist destinations. Recent partnerships with international hotel management companies have also allowed Lemon Tree to introduce new brands and services, broadening its appeal to a wider range of customers.

In late 2025, Lemon Tree announced a joint venture to develop a network of extended-stay hotels catering to the growing segment of corporate travelers and project workers. This strategic move demonstrates the company's forward-thinking approach and its ability to identify and capitalize on emerging market trends.

Navigating Potential Challenges

While the outlook for Lemon Tree Hotels remains positive, it's important to acknowledge the potential challenges facing the hospitality industry. Fluctuations in fuel prices, geopolitical instability, and unforeseen economic shocks could all impact travel demand and hotel performance. Increased competition from both established players and new entrants also presents a risk.

However, Lemon Tree's strong management team, its focus on cost optimization, and its diversified revenue streams are expected to mitigate these risks. The company's commitment to sustainability and responsible tourism practices also aligns with the growing demands of environmentally conscious travelers.

Investment Perspective

Prabhudas Lilladher's 'Buy' rating suggests that Lemon Tree Hotels represents an attractive investment opportunity for investors seeking exposure to the recovering Indian hospitality sector. The target price of Rs 165 per share implies significant upside potential from the current market price (as of February 11th, 2026). However, potential investors should conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions. The hospitality sector, while showing strong recovery signs, still carries inherent risks.

Disclaimer: This report is for informational purposes only. Moneycontrol.com does not provide investment advice. Please consult your financial advisor.