Lemon Tree Hotels expands with new Lemon Tree Premier property in Mhow, Madhya Pradesh

Lemon Tree Hotels Limited (NSE: LEMONTREE), one of India‘s largest diversified hotel chains, announced on June 11, 2025, the signing of a new property under its upscale Lemon Tree Premier brand in Mhow, Madhya Pradesh. The property will be managed by Carnation Hotels Private Limited, the hotel management subsidiary wholly owned by Lemon Tree Hotels Limited. The announcement comes as part of a strategic expansion push across Tier II and heritage-driven destinations in central India.

The newly signed property in Mhow will feature 72 rooms and include a suite of premium amenities such as a restaurant, banquet space, meeting room, swimming pool, spa, and designated public areas. Positioned approximately 30 kilometers from Indore Airport and about 29 kilometers from Indore Railway Station, the hotel offers strong road connectivity for both public and private transport, enabling it to cater effectively to leisure, spiritual, and wellness tourism segments.

Why is Lemon Tree Hotels Limited investing in Mhow?

Mhow, officially renamed Dr. Ambedkar Nagar, is a significant location both historically and spiritually. Recognized as the birthplace of Dr. B.R. Ambedkar, the town is home to the Bhim Janmabhoomi memorial, a key pilgrimage site particularly popular during Ambedkar Jayanti. The region also features renowned natural landmarks such as Patalpani Falls and Janapav Kuti, a site of legendary significance, making it attractive for cultural and ecological tourism.

In a press statement, Mr. Vilas Pawar, Chief Executive Officer of the Managed and Franchise Business at Lemon Tree Hotels Limited, noted that this signing complements the group’s existing presence in Madhya Pradesh, where it already operates four hotels and has six more under development. He added that the new Mhow property aligns with the state’s increasing prominence as a center for wellness retreats, spiritual getaways, and heritage tourism. The investment reflects a clear push by Lemon Tree Hotels Limited to embed itself deeper into markets that benefit from both domestic pilgrimage traffic and experiential tourism.

How this project fits into Lemon Tree Hotels Limited’s strategic model

Lemon Tree Hotels Limited has consistently adopted an asset-light model, expanding via managed and franchised properties through its Carnation Hotels platform. This approach allows the Indian hospitality developer to scale across diverse geographies without the heavy capital burden associated with owned assets. The Mhow signing continues this trend and adds depth to the Lemon Tree Premier brand’s mid-upscale portfolio, which targets guests seeking refined experiences outside the metro core.

Since its inception in 2004 with a 49-room hotel, Lemon Tree Hotels Limited has grown its footprint to over 210 properties. This includes more than 110 operational hotels and over 100 additional properties in the pipeline, as of 2025. Its geographic reach extends to 73 Indian destinations, covering not only top-tier cities such as Delhi NCR, Mumbai, Bengaluru, Kolkata, and Hyderabad, but also deep-penetration markets in Tier II, III, and IV towns. Internationally, Lemon Tree Hotels Limited has established presence in Dubai, Bhutan, and Nepal.

Its brand segmentation spans seven entities catering to different price points and demographics: Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, Keys Prima, Keys Select, and Keys Lite. The latest signing reinforces its mid-upscale strategy while positioning the brand favorably for emerging travel trends in 2025.

What are the financial and operational metrics as of June 2025?

As of the market close on June 11, 2025, shares of Lemon Tree Hotels Limited were trading at ₹140.12 on the National Stock Exchange of India, down 0.96% from the previous day. During the session, the stock hit a high of ₹141.96 and a low of ₹139.25, with a volume-weighted average price (VWAP) of ₹140.86. The day’s traded volume reached 13.33 lakh shares, generating a turnover of ₹18.77 crore.

The stock’s adjusted price-to-earnings (P/E) ratio stood at 46.05, suggesting a valuation premium relative to mid-cap hospitality peers. Lemon Tree Hotels Limited has a total market capitalization of ₹11,100.96 crore and a free-float market capitalization of ₹6,889.37 crore. The company remains part of the NIFTY 500 index and operates in the “Hotels & Resorts” sector. Its 52-week trading range spans from ₹112.29 (October 8, 2024) to ₹162.40 (January 2, 2025), indicating moderate-to-high price volatility in the last year.

The current deliverable percentage of total traded quantity is approximately 57.08%, which may point toward rising investor confidence among long-only portfolios or retail participants holding the stock beyond intraday trades.

What does this expansion signal for institutional sentiment?

Institutional sentiment toward Lemon Tree Hotels Limited has been generally stable over the past fiscal year, with increased optimism tied to its robust project pipeline, asset-light operating model, and differentiated brand stack. Analysts tracking the stock have pointed out that while the elevated P/E ratio reflects forward growth expectations, the sustainability of margins and operational efficiency—particularly in managed properties—is key to unlocking further shareholder value.

The Mhow announcement adds to the narrative of consistent regional scaling, which is often viewed favorably by institutional investors looking for geographically diversified exposure within Indian hospitality. Lemon Tree Hotels Limited’s ability to secure premium locations in heritage and pilgrimage belts adds long-term defensiveness to its portfolio, especially amid fluctuations in business and international travel demand.

Brokerage views have also noted that as travel patterns in India increasingly incorporate wellness, ecological, and spiritual dimensions, hotel operators with an early presence in such corridors stand to benefit from network effects and higher RevPARs (Revenue per Available Room) over time.

What to expect next for Lemon Tree Hotels Limited?

Looking ahead, Lemon Tree Hotels Limited is expected to intensify its expansion in central and southern India, particularly through its managed and franchised models under the Carnation Hotels platform. Analysts anticipate that as more of these properties come online through FY26 and FY27, topline growth will be complemented by rising management fee income—an important revenue stream for the capital-light approach.

Furthermore, the group’s ability to tap into leisure destinations without diluting brand identity remains a core focus. Upcoming properties in the pipeline are likely to be concentrated in high-traffic tourist belts and emerging economic corridors where land acquisition and project structuring can be done swiftly through partnerships.

While macroeconomic headwinds such as interest rate volatility and inflationary pressures on construction costs remain in play, Lemon Tree Hotels Limited’s diversified pipeline provides a hedge across price tiers and demand cycles.