Lemin Tree Hotels share price: Buy Lemon Tree Hotels, target Rs 93: Nirmal Bang Institutional Equities - The TheIndianSubcontinentNever miss a great news story!Get instant notifications from TheIndianSubcontinentAllowNot nowYou can switch off notifications anytime using browser settings.RecosDID YOU KNOWUnleash the power of SIP - Invest in Mutual fundsReturns1M 6M 1Y 3Y 12.88% PortfolioLoadingSelect Portfolio and Asset Combination for Display on Market BandShow More Download ET MARKETS APP Get ET Markets in your own languageDOWNLOAD THE APP NOWCHOOSE LANGUAGEENGENG - EnglishHIN - GUJ - MAR - BEN - KAN - ORI - TEL - TAM - ET NOW RADIOET NOWTIMES NOWETMarkets.com|Updated: Jul 13, 2018, 04.59 PM ISTNirmal Bang Institutional Equities has a buy call on Lemon Tree Hotels Ltd.
with a target price of Rs 93.
The current market price of Lemon Tree Hotels Ltd.
is Rs 75.5.
Time period given by the brokerage is a year when Lemon Tree Hotels Ltd.
price can reach defined target.
Lemon Tree Hotels Ltd., incorporated in the year 1992, is a midcap company with a market cap of Rs 6173.34 crore.Investment rationale by Nirmal BangWe initiate coverage on Lemon Tree Hotels with a Buy rating and a target price of Rs 93 based on 30xFY20E EV/EBITDA.
Our optimism on the stock is based on favourable industry environment together with the companys aggressive strategy focused on middle-income domestic consumers, geographical expansion and cost control.
The main reasons for our optimism are: 1) Cyclical upturn in the hotel sector along with favourable demand-supply dynamics expected to drive the occupancy rate and average room rate (ARR).
2) Strong demand from the domestic middle-income segment.
Lemon Tree Hotels (LTHL) has a focused strategy which has aided in strong growth and is expected to drive future growth.
The key elements of the strategy are:a) Strategy focused on attractive room rates for middle income domestic travellers- Value for Money.
b) Geographical spread across more than 30 cities in India to reduce exposure to local, seasonal and cyclical fluctuations in demand.
c) High operating leverage with a strong focus on cost control.
d) Efficient capex management with lower-than-industry capex per room.
e) Strong balance sheet with a comfortable net debt to equity ratio, despite high capex.
It also has a negative working capital.
We have valued the stock at 30x FY20E EV/EBITDA and arrived at a target price of Rs93.Read this article inHindiBuy Federal Bank, target Rs 116: Nirmal Bang Institutional EquitiesBuy Whirlpool of India, target Rs 1780: Nirmal Bang Institutional EquitiesBuy Indraprastha Gas, target Rs 394: Nirmal Bang Institutional EquitiesAccumulate Voltas, target Rs 600: Nirmal Bang Institutional EquitiesBuy Nesco, target Rs 794: Nirmal Bang Institutional EquitiesCommenting feature is disabled in your country/region.Disclaimer: This recommendation is analyst's own and does not represent those of economictimes.com ETMarkets.com.
Please consult your financial advisor before taking any position in the stock/s mentioned.From Around The WebMore from The TheIndianSubcontinentBrowse CompaniesABCDEFGHIJKLMNOPQRSTUVWXYZ|123456789Browse Mutual FundsABCDEFGHIJKLMNOPQRSTUVWXYZ1Buy Lemon Tree Hotels, target Rs 93: Nirmal Bang Institutional Equities Buy MindTree, target Rs 1125: Manas Jaiswal Buy Granules India, target Rs 100: Kunal Bothra Buy Arvind, target Rs 444: Kunal Bothra Buy InterGlobe Aviation, target Rs 1145: Dr CK Narayan Buy Wipro, target Rs 288: Dr CK Narayan Buy Dish TV India, target Rs 100: Motilal Oswal Securities Buy Tata Motors, target Rs 459: Motilal Oswal SecuritiesBuy IndusInd Bank, target Rs 2,120: JM Financial Hold Tata Consultancy Services, target Rs 1,720: JM Financial Buy Divi's Laboratories, target Rs 1180: Kunal Bothra To see your saved stories, click on link hightlighted in bold