Shares of Lemon Tree Hotels bounced back in the green after crashing around 5% on Monday.
What Happened: The jump in the stock comes as global brokerage firm CLSA maintained its ‘buy’ rating for the stock with a target price of ₹102 – an over 35% upside from the stock’s last closing price of ₹75.46. The firm expects the company to maintain healthy growth and keep its EBITDA margin over 50%.
The firm sees the hospitality giant scaling up to 25,000 rooms in the next five years. The brokerage also noted that the company aims to be debt free in the next four years.
Domestic Brokerages are also strongly bullish on the stock. HDFC Securities, IDBI Capital, and ICICI Securities all have a ‘buy’ rating on the stock as they see an over 35% upside in the stock. ICICI Securities has a price target of ₹125, which translates to a massive 60% upside.
Now for the part, you are looking for, here’s how much you would have today if you bought shares of Lemon Tree Hotels instead of that weekend getaway a year ago.
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So the cost of a two-night stay for two people at any Lemon Tree Hotel may range between ₹15,000-20,000 depending on the dates and the location. Now if you invested ₹20,000 in the stock a year ago on March 14 at the closing price of ₹55.85, it would have fetched you around 358 shares of the company.
Today with the stock’s current market price of around ₹77, your initial investment would be worth around ₹27,566 translating into a 40% return. If the stock hits its 52-week high of ₹103.30 your investment would jump to ₹36,981. If the stock goes up to reach ICICI Securities’ target price of ₹125, you would double your initial investment at ₹44,750.
Price Action: Shares of Lemon Tree Hotels jumped 3.58% to ₹78.16 in the early hours of trading on Tuesday.
Disclaimer: Benzinga India doesn't give financial advice. The above article is for educational purposes alone.
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