ICICI Securities has given Lemon Tree Hotels a "BUY" rating with a target price of Rs 164. The company currently operates 10,318 keys across 112 hotels and has plans to aggressively expand its portfolio, adding 5,220 keys by FY29. This will bring the total operational keys to 15,538.

In the short term, the company's operations for FY25 are expected to be affected by ongoing renovations across its hotel portfolio. However, revenue and EBITDA are projected to grow at a compound annual growth rate (CAGR) of 22% from FY24 to FY27. This growth will be driven by the stabilization of Aurika, the Mumbai airport hotel, as well as increased revenues from renovated rooms and management contracts.

Lemon Tree Hotels aims to gradually reduce its debt levels, which currently stand at INR 19.1 billion, over the next 3 to 4 years as its earnings improve. The target price is based on a 23x EV/EBITDA multiple for September 2026 estimates.