Stock to buy: Brokerage Sharekhan suggests buying this hotel stock trading under Rs 151; check target price

On Tuesday, June 25, the benchmark Sensex exceeded the historic 78,000 milestone for the first time, while the Nifty finished at a fresh record high due to purchasing in blue-chip bank stocks. On June 10, the Sensex rose above 77,000 for the first time.

The 30-share BSE Sensex rose 712.44 points, or 0.92 per cent, to reach a record closing high of 78,053.52. During the day, the benchmark surged 823.63 points, or 1 per cent, to a new lifetime high of 78,164.71.

The Nifty rose 183.45 points, or 0.78 per cent, to establish a new record high of 23,721.30. During the day, it rose 216.3 points, or 0.91 per cent, to an intra-day lifetime high of 23,754.15.

Meanwhile, Analyst Sanjeev Hota from brokerage Sharekhan has recommended buying Lemon Tree Hotels stock from a long-term perspective, According to Hota, the stock can provide over 45 per cent from its current price.

Hotel Stock to buy

In the record-high market, Sharekhan's Sanjeev Hota has chosen the hotel stock Lemon Tree Hotels for the best earnings. Experts say that investors can get strong returns on this stock in the future.

Analyst's views on Lemon Tree Hotel stock

Experts say that the best thing is that its numbers are getting better quarter after quarter. Management also has guidance that there will be strong growth in the coming years. The balance sheet of the company is getting stronger. Cash flow is increasing due to an increase in occupancy. This will result in debt repayment. The company will become completely debt-free by financial year 2028. It will continue to expand due to its asset-light plan. Its hotel can do even better from here. 

"Talking about valuation, Lemon Tree Hotels is still trading at a discount. Has an affordable valuation. It would be advisable to buy from here," Hota added.

Lemon Tree Hotels stock: Target price

He has advised to buy the stock from a perspective of 9 to 12 months. The target of the stock is Rs 220 per share. On June 25, 2024, the stock increased by 2.69 per cent and closed at the level of 150.85. At this price, the stock can give further returns of more than 45 per cent.

A look at Q4FY24 earnings of Lemon Tree Hotels

Lemon Tree Hotels reported a profit after tax (PAT) of Rs 83.9 crore in the March quarter of FY24, compared to Rs 59 crore the previous year. Its PAT climbed 42 perc ent sequentially and 29 per cent annually, reaching Rs 181.7 crore in the past fiscal year vs Rs 140.5 crore in FY23.

The firm recorded a total income of Rs 331 crore in the fourth quarter, an increase from Rs 254.73 crore in the same period in FY23. Lemon Tree's overall income for FY24 was Rs 1,076.76 crore, up from Rs 878.56 crore in FY23.

Lemon Tree Hotels' stock performance

The hotel has provided more than 24 per cent returns in six months and the shares have jumped almost 60 per cent in one year. Lemon Tree's shares climbed 28 per cent on a year-to-date (YTD) basis.