Lemon Tree Hotels Q1 2026 Results: Net Profit Soars 93% as Sales and Margins Climb

Lemon Tree Hotels has kicked off 2026 on a high note, reporting an outstanding financial performance for the quarter ended June 2026. The company, a prominent player in India’s mid-priced hospitality segment, delivered robust growth across all key financial metrics, underscoring its operational efficiency, demand resilience, and strategic expansion.

For Q1 2026, the company’s net profit jumped 93% year-on-year to ₹48.1 crore, compared to ₹20.1 crore in the same quarter last year. This exceptional growth was supported by an 18% increase in sales, which rose to ₹316 crore from ₹268 crore in Q1 2025. The performance comes at a time when India’s hospitality industry is witnessing strong domestic travel trends and increasing corporate demand.

The company’s EBITDA rose 22% year-on-year to ₹140 crore, reflecting better cost management, higher occupancy rates, and improved average room rates (ARR). The EBITDA margin expansion signals that Lemon Tree is not just growing in size but also strengthening profitability.

Earnings per share (EPS) came in at ₹0.48, a steep 92% jump from ₹0.25 in Q1 2025. This leap showcases the company’s ability to convert revenue growth into shareholder value effectively.

Breaking Down the Q1 2026 Numbers

• Sales Growth: Sales rose to ₹316 crore from ₹268 crore, registering an 18% year-on-year increase. This growth is attributed to higher room occupancies, improved ARR, and better F&B revenue contribution.

• EBITDA Performance: EBITDA increased from ₹115 crore to ₹140 crore, a 22% rise, showing that operational efficiency remains a cornerstone of the company’s growth strategy.

• Net Profit Surge: Net profit leapt to ₹48.1 crore from ₹20.1 crore, marking a 93% rise. The strong profit growth is also aided by reduced finance costs and efficient utilization of resources.

• EPS Strength: EPS jumped to ₹0.48 from ₹0.25, underscoring the enhanced profitability per share.

Factors Driving the Strong Q1 2026 Performance

1. Domestic Travel Demand – With corporate travel rebounding and leisure travel remaining strong, Lemon Tree has benefitted from sustained room bookings across metro and tier-II cities.

2. Portfolio Expansion – The company has been steadily increasing its footprint, adding more rooms and entering newer markets, contributing to incremental revenue streams.

3. Operational Efficiencies – Focus on controlling operating costs, energy efficiency initiatives, and better manpower utilization have led to margin improvements.

4. Brand Positioning – Lemon Tree’s reputation as a reliable mid-scale hospitality brand continues to attract a steady stream of both leisure and business travelers.

Industry Context and Outlook

The Indian hospitality sector has shown remarkable resilience, bouncing back strongly from the pandemic lows. With increasing domestic consumption, government push for tourism, and rising inbound travel, the sector’s prospects look bright.

For Lemon Tree Hotels, the momentum in Q1 2026 sets a positive tone for the rest of the year. The upcoming festive season, combined with corporate events and conferences, is expected to boost occupancy further. Additionally, the company’s strategic focus on asset-light management contracts could enhance profitability without heavy capital expenditure.

Valuation Perspective

At the current market price of ₹143 and a market capitalization of ₹11,354 crore, Lemon Tree Hotels trades at a PE ratio of 52.8. While the valuation appears high compared to some peers, investors may be pricing in the company’s consistent growth trajectory, operational leverage, and brand strength.

Given the company’s robust Q1 performance, the valuation could be justified for long-term investors who believe in the sustained growth of India’s hospitality industry.

Risks and Considerations

While the outlook is positive, potential risks include:

• Economic slowdowns impacting discretionary travel.

• Rising interest rates potentially increasing finance costs.

• Competitive pressures from both domestic and international hospitality players.

However, Lemon Tree’s asset-light expansion model and focus on operational excellence could mitigate some of these risks.

Analyst Takeaways

Lemon Tree Hotels’ Q1 2026 results reaffirm its position as one of India’s fastest-growing hospitality brands in the mid-price segment. The company has demonstrated its ability to capture market opportunities, improve profitability, and maintain growth momentum despite macroeconomic uncertainties.

The dual strength of revenue expansion and margin improvement signals a well-balanced growth strategy. With the industry’s tailwinds and the company’s strategic initiatives, the future quarters could continue to reflect strong performance.

FAQs

Q1: What was Lemon Tree Hotels’ net profit in Q1 2026?
A: The company reported a net profit of ₹48.1 crore, up 93% year-on-year.

Q2: How much did sales grow in Q1 2026 compared to last year?
A: Sales rose by 18%, reaching ₹316 crore compared to ₹268 crore in Q1 2025.

Q3: What contributed to the strong EBITDA growth?
A: Factors include higher occupancy, improved average room rates, and operational efficiencies.

Q4: What is the EPS for Q1 2026?
A: EPS stood at ₹0.48, a 92% rise from ₹0.25 last year.

Q5: What is the current market valuation of Lemon Tree Hotels?
A: The market capitalization is ₹11,354 crore with a PE ratio of 52.8.

Q6: What are the key risks for Lemon Tree Hotels going forward?
A: Potential risks include economic slowdowns, rising finance costs, and competitive pressures.

Q7: How is the outlook for the next few quarters?
A: The company is expected to maintain growth momentum driven by domestic travel demand, portfolio expansion, and asset-light strategies.

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