Lemon Tree Hotels Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Lemon Tree Hotels Ltd filed with BSE on 03 Jun 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Lemon Tree Hotels reported FY26 total revenue of Rs 1,452.7 crore, up 13% YoY, with net EBITDA of Rs 699.3 crore and PAT growing 19% to Rs 288.3 crore, while management described FY26 and Q4 FY26 as the best periods in the company's history on several operating metrics. Management attributed margin contraction during the year to increased renovation spend, technology investment, and a GST-related rate change, and outlined plans to demerge Fleur Hotels into a separately listed asset-owning entity. Management also discussed near-term demand softness linked to reduced corporate travel and geopolitical tensions affecting the airline sector.
Numbers mentioned
Total revenue: Rs. 1,452.7 crore (FY26)
p. 3
“For the full year FY26, the total revenue stood at Rs. 1,452.7 crore, up 13% YoY.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Net EBITDA: Rs. 699.3 crore (FY26)
p. 3
“Net EBITDA stood at Rs. 699.3 crore, up 10%.”
Neelendra Singh, page 3 of the filed PDF · View the filing
PAT: Rs. 288.3 crore (FY26)
p. 3
“PAT grew at 19% to Rs. 288.3 crore and Cash Profit grew 16% to Rs. 443.1 crore.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Gross ARR: Rs. 6,875 (FY26)
p. 3
“Our gross ARR stood at Rs. 6,875 for the full year, and occupancy was 73.5%, both the highest we have ever reported for a full financial year.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Q4 revenue: Rs. 419.5 crore (Q4 FY26)
p. 3
“For Q4 specifically, revenue stood at Rs. 419.5 crore, up 11% YoY.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Q4 net EBITDA: Rs. 218.3 crore (Q4 FY26)
p. 3
“Net EBITDA was Rs. 218.3 crore, up 7%.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Q4 PAT: Rs. 116.5 crore (Q4 FY26)
p. 3
“PAT was Rs. 116.5 crore, up 8% and Occupancy for the quarter was at 78.5%.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Net EBITDA margin: 48.1% (FY26)
p. 3
“Our net EBITDA margins for FY26 was 48.1% compared to 49.4% in FY25, a contraction of about 126 bps.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Q4 EBITDA margin: 52% (Q4 FY26)
p. 3
“For Q4 specifically, margin was at 52%, down 198 basis points from Q4 FY25.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Total borrowings: Rs. 1,500 crore (FY26)
p. 3
“On debt, we have brought our total borrowings down to Rs. 1,500 crore from Rs. 1,699 crore versus a year ago, and our cost of debt has fallen to 7.42%, down 115 basis points versus a year ago.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Combined pipeline inventory: 22,581 rooms across 268 hotels
p. 3
“Our combined operational and signed pipeline inventory now stands at 22,581 rooms across 268 hotels, of which 131 hotels and 11,811 rooms are already operational.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Third-party management fees: Rs. 73.9 crore (FY26)
p. 4
“Fees from management and franchised contracts for third-party owned hotels stood at Rs. 73.9 crore in FY26, an increase of 23% YoY.”
Neelendra Singh, page 4 of the filed PDF · View the filing
Fleur management fees: Rs. 95.8 crore (FY26)
p. 4
“Fees from Fleur Hotels stood at Rs. 95.8 crore in FY26, an increase of 8% YoY, which is partially subdued due to the impact of GST change and accelerated renovation in the Fleur portfolio.”
Neelendra Singh, page 4 of the filed PDF · View the filing
Total management fees: Rs. 169.7 crore (FY26)
p. 4
“Total management fees for Lemon Tree stood at Rs. 169.7 crore in FY26, an increase of 14% YoY.”
Neelendra Singh, page 4 of the filed PDF · View the filing
Debt-to-EBITDA: 2.25
p. 21
“You look at our debt-to-EBITDA today, it is about 2.25.”
Patanjali Keswani, page 21 of the filed PDF · View the filing
Aurika full-year occupancy: 62% to 74% (FY25 to FY26)
p. 16
“If you look at the full year, Aurika occupancy moved from 62% to 74%, as an aggregate.”
Neelendra Singh, page 16 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
GST, tech and renovation expense as % of revenue — approximately 3.7% of revenue · FY28 and onwards
stated firmly by Neelendra Singh
p. 3
“We expect all these 3 expense heads to reduce to approximately 3.7% of revenue by FY28 and onwards, leading to corresponding expansion in EBITDA margins.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Room openings — about 2,000 rooms · FY27
stated firmly by Neelendra Singh
p. 9
“Same click as last year, opened about 2,000 rooms.”
Neelendra Singh, page 9 of the filed PDF · View the filing
Lemon Tree steady-state flow-through margin — 70%+, hopefully 75%
stated as an aspiration by Patanjali Keswani
p. 15
“It is very much true that we expect also north of 70% steady state, hopefully, 75%.”
Patanjali Keswani, page 15 of the filed PDF · View the filing
Renovation spend as % of revenue — 1.9% in FY27, 1.3% in FY28 · FY27-FY28
stated firmly by Patanjali Keswani
p. 13
“But renovation will come down to 1.9%. At that point, the entire portfolio is done.”
Patanjali Keswani, page 13 of the filed PDF · View the filing
Keys portfolio EBITDA — Rs. 60 crore EBITDA
stated as an aspiration by Patanjali Keswani
p. 17
“I have been conservative and said we want Rs. 60 crore EBITDA which means over 930 rooms.”
Patanjali Keswani, page 17 of the filed PDF · View the filing
Fleur capital deployment — up to Rs. 3,000 crore · next 12-18 months
stated conditionally by Patanjali Keswani
p. 20
“If I take Fleur and Warburg's investment into account, we have the potential to deploy up to Rs. 3,000 crore in the next 12-18 months.”
Patanjali Keswani, page 20 of the filed PDF · View the filing
Nehru Place hotel capex — Rs. 700 crore
stated firmly by Patanjali Keswani
p. 20
“Nehru Place will, best guess, require Rs. 700 crore.”
Patanjali Keswani, page 20 of the filed PDF · View the filing
Lemon Tree PAT margin — 60% of revenue · steady state
stated as an aspiration by Patanjali Keswani
p. 24
“Then you are right. There is no depreciation. There is no interest. Our PAT will be 60% of the revenue.”
Patanjali Keswani, page 24 of the filed PDF · View the filing
Fleur pre-fee margin — late 50s · FY27-FY28
stated as an aspiration by Patanjali Keswani
p. 21
“Margin. Well, pre-fees, these same stores should be in the late 50s, pre-fees.”
Patanjali Keswani, page 21 of the filed PDF · View the filing
Demerger completion timeline — 12 to 18 months
stated conditionally by Patanjali Keswani
p. 14
“If that happens earlier, then it will be 12 months from now. If it happens later, then it will be 18 months.”
Patanjali Keswani, page 14 of the filed PDF · View the filing
Retail vs corporate room night mix — 65% retail
stated as an aspiration by Patanjali Keswani
p. 19
“We are very clear that as we grow to 20,000 - 25,000 rooms operating, we want 65% of our business to be retail, which is direct to us so it is really a C2B business, customers coming to us directly, sometimes through OTAs who are our partners in this endeavour and more and more directly through our website, our loyalty program and our direct to hotel or call centre.”
Patanjali Keswani, page 19 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said the arrangement is brand agnostic but Lemon Tree should not be discriminated against when opportunities arise.
Answered by Patanjali Keswani
Asked by Achal Kumar: After demerger, could Fleur use a different operator than Lemon Tree for its hotels?
p. 6
“Short answer, brand agnostic but with one caveat that obviously Lemon Tree should not be discriminated against when opportunities arise.”
Patanjali Keswani, page 6 of the filed PDF · View the filing
Management said RevPAR is highly dependent on micro market conditions and pointed to a temporary supply glut in Mumbai and disruptions from the IndiGo shutdown and geopolitical conflict.
Answered by Patanjali Keswani
Asked by Achal Kumar: Why is RevPAR growth so divergent between Aurika and Keys brands?
p. 7
“But Mumbai always absorbs supply glut.”
Patanjali Keswani, page 7 of the filed PDF · View the filing
Management said they shifted strategy toward maintaining occupancy premium rather than price growth given weak demand.
Answered by Patanjali Keswani
Asked by Karan Khanna: How is the company managing occupancy and RevPAR amid airline capacity cuts?
p. 8
“Therefore, our strategy in April, where the slowdown continued from March going on into May was very clear that we would adjust pricing, so that our occupancy would continue at a premium to the market.”
Patanjali Keswani, page 8 of the filed PDF · View the filing
Management explained openings typically lag signings by about three years and provided the ratio as a rough benchmark.
Answered by Patanjali Keswani
Asked by Karan Khanna: How should investors think about the gap between hotel signings and openings?
p. 9
“The way to look at openings and the way to look at signings is as follows because most of our management contracts are signed is not conversions, but hotels under construction.”
Patanjali Keswani, page 9 of the filed PDF · View the filing
Management detailed the expected decline in GST, tech and renovation costs as a percentage of revenue over coming years.
Answered by Patanjali Keswani
Asked by Sameet Sinha: How will the company offset the GST headwind and how is renovation spend trending into FY28?
p. 13
“In FY26, we spent 5.8% of our revenue on GST tech and renovation.”
Patanjali Keswani, page 13 of the filed PDF · View the filing
Management said the NCLT process timeline is uncertain and gave an outer limit of 12 to 18 months.
Answered by Patanjali Keswani
Asked by Vaibhav Muley: What is the updated timeline for the Fleur demerger given SEBI and NCLT approvals?
p. 14
“The real issue is NCLT. Will it take 6 months? Will it take 9 months? Will it take 12 months?”
Patanjali Keswani, page 14 of the filed PDF · View the filing
Management attributed the gap to increased corporate opex including technology investment and new hires, expecting margins to rise toward 70%+ over time.
Answered by Patanjali Keswani
Asked by Vaibhav Muley: Why are Lemon Tree standalone pro forma margins at 60% rather than an expected 70%?
p. 15
“We are currently at 60% for a very simple reason. One is that a bunch of our operating expenses in the corporate side of Lemon Tree have gone up.”
Patanjali Keswani, page 15 of the filed PDF · View the filing
Management attributed the decline to the loss of a large wet lease contract in Aurika Mumbai, offset by higher rates from other demand.
Answered by Patanjali Keswani
Asked by Sumant Kumar: Why did Aurika occupancy decline by 2% in the quarter?
p. 16
“This is because of very large wet lease in Aurika Mumbai went away. That was a one-off.”
Patanjali Keswani, page 16 of the filed PDF · View the filing
Management explained that incentive fees tied to EBITDA delivery were impacted by renovation and GST effects in the Fleur-heavy owned portfolio.
Answered by Patanjali Keswani
Asked by Jinesh Joshi: Why did third-party management fee growth outpace Fleur fee growth?
p. 18
“GST impact and the elevated renovation impact dropped the EBITDA margins. As a result, our incentive fees were significantly affected.”
Patanjali Keswani, page 18 of the filed PDF · View the filing
Management said Fleur and Warburg's combined capital could support deployment of up to Rs 3,000 crore over the next 12-18 months depending on deal availability.
Answered by Patanjali Keswani
Asked by Anuj Upadhyay: Has capital been set aside for the proposed 2,500-room Fleur expansion?
p. 20
“If I take Fleur and Warburg's investment into account, we have the potential to deploy up to Rs. 3,000 crore in the next 12-18 months.”
Patanjali Keswani, page 20 of the filed PDF · View the filing
Management indicated debt could rise to a range depending on how many of the 2,500 rooms are finalized, while remaining more conservative than the industry norm.
Answered by Patanjali Keswani
Asked by Vikram Shah: What peak debt level is management comfortable with for the expansion plans?
p. 21
“If we deploy Rs. 1,500 crore of capital and we would probably borrow and our debt would go to mid Rs. 2,500 crore to Rs. 3,000 crore as a consolidated entity of Fleur, which means that our debt-to-EBITDA would temporarily go up till the EBITDA started flowing in.”
Patanjali Keswani, page 21 of the filed PDF · View the filing
Management said Lemon Tree would move toward distributing profits to shareholders while Fleur would retain capital for growth.
Answered by Patanjali Keswani
Asked by Sriram R: What is the capital allocation plan for Lemon Tree post-restructuring?
p. 25
“Lemon Tree will effectively move into distribution of profit to shareholders.”
Patanjali Keswani, page 25 of the filed PDF · View the filing
Risks flagged
Geopolitical tensions in the Middle East and related conflict affecting travel demand
p. 3
“Despite intermittent global headwinds including renewed geopolitical tensions in the Middle East, aviation disruptions and GST changes during the year, FY26 was the best year in Lemon Tree's history across Occupancy, ARR, Revenue, EBITDA, PBT, PAT, Cash Profit and Q4 FY26 was the best ever fourth quarter on the same parameters.”
Neelendra Singh, page 3 of the filed PDF · View the filing
GST-related change increasing costs for lower-rated rooms
p. 3
“In FY26, our margins were impacted by 580 basis points due to significant step-up in renovation expenditure as we invest in upgrading our owned hotel portfolio, investments in technology and the GST-related change that came into effect during the year, which only had a half year impact in FY26 and will have a full year impact going forward.”
Neelendra Singh, page 3 of the filed PDF · View the filing
Corporate travel slowdown due to war-related uncertainty and rising air fares
p. 11
“He told me this is late March, that they have given instructions that all travel must reduce to the maximum extent possible, partly because of the rising air fares and partly because they themselves are worried about what is happening with the war.”
Patanjali Keswani, page 11 of the filed PDF · View the filing
Supply glut in Mumbai micro market from new hotel openings
p. 7
“What happened was that in the last, I think, 1 year, about 5 hotels have opened in the micro market where Aurika operates.”
Patanjali Keswani, page 7 of the filed PDF · View the filing
Broader economic impact from war including oil prices, inflation and current account deficit
p. 21
“See, oil, inflation, current account deficit, all this will start hitting our country very hardly.”
Patanjali Keswani, page 21 of the filed PDF · View the filing
Wet lease crew loss impacting Aurika Mumbai occupancy
p. 10
“The crew levels themselves in quite dramatically because this year, we did not get the wet lease crew of last year because that shifted to a lower rated hotel.”
Patanjali Keswani, page 10 of the filed PDF · View the filing
Slippage risk in hotel opening timelines due to owner financing delays
p. 9
“None will open earlier that I can assure you, unfortunately. But all will open that time or maybe six months slippage or sometimes even a greater slippage if the owner runs out of finance.”
Patanjali Keswani, page 9 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.