Lemon Tree Hotels hits record Q2 revenue amid strategic growth

Lemon Tree Hotels Limited achieved its highest-ever Q2 revenue of Rs. 308 crore in FY26, an 8% increase year-over-year, despite facing multiple industry challenges. Net EBITDA grew 1% to Rs. 132.4 crore, resulting in a 43% margin. The company reported a 6% YoY increase in gross ARR to Rs. 6,247 and an 8% YoY increase in RevPAR to Rs. 4,358, with occupancy at 69.8%. Profit after tax rose 20% to Rs. 41.9 crore, and cash profit increased 9.2% to Rs. 76.3 crore.

Significant renovations, costing approximately Rs. 300 crore over 2.5 years, impacted Q2 EBITDA margins but are expected to yield substantial revenue growth. The company aims to complete renovations by the end of next year, with total spending projected at Rs. 130 crore - Rs. 140 crore next year. Lemon Tree also improved its credit rating to A+, reducing borrowing costs to 7.72% in Q2 FY26 from 8.68% last year.

Strategically, Lemon Tree signed 15 new management and franchise contracts, adding 1,138 rooms to its pipeline and operationalizing five hotels with 272 rooms. The company also secured a Letter of Award for 2.25 acres in Nehru Place, New Delhi, for a 500-550 room Aurika hotel. As of September 30, 2025, the group's total inventory includes 242 hotels and 20,074 rooms, with 10,956 rooms and 121 hotels operational.