Target: ₹157
CMP: ₹142.50
Lemon Tree Hotels has announced a composite reorganisation, wherein the group would be split into an asset-light, fee platform – Lemon Tree Hotels and an asset-heavy ownership platform – Fleur Hotels.
As part of the transaction, Warburg Pincus has acquired APG’s entire 41 per cent stake in Fleur and committed up to ₹960 crore of primary equity in Fleur to fund growth. The transaction is aimed at creating separate platforms for pure play asset light and asset heavy growth-oriented (Fleur Hotels) companies. While reported revenues will reduce following asset transfers, the proportion of management fees will rise, EBITDA margin will expand, and depreciation and interest costs will decline. LTH’s shareholding structure will be unchanged.
Fleur is expected to be listed within 12-15 months. While the restructuring has created separate platforms and provided an exit to APG, it does not create material value for Lemon Tree’s shareholders. Post completion of the deal and listing of Fleur, Lemon Tree will get a holding company discount for its holding in Fleur.
We have valued Lemon Tree on SoTP, factoring in the current restructuring and have lowered our TP to ₹157 (₹210 earlier). We revise rating to Accumulate from Buy.
Published on January 16, 2026
