Synopsis: In the Indian hotel & hospitality industry there stands two giants, each of them are small cap stocks having a market capitalization of more than Rs 10000, and expect their EBITDAs to reach upto Rs 2000 Cr in the coming years.
The Indian hotel industry is a key pillar of the country’s tourism and hospitality ecosystem, driven by domestic travel, business tourism, weddings, and rising disposable incomes. The sector is highly seasonal, witnessing strong demand during peak holiday periods, festive seasons, and winter months, while occupancy and room rates tend to soften during off-peak and monsoon seasons. Factors such as foreign tourist arrivals, corporate travel, and large events significantly influence performance, leading to cyclical fluctuations in revenues and margins.
With increasing focus on luxury, mid-scale, and experiential stays, two of the biggest players in the Indian hotel industry are Lemon Tree Hotels and The Leela Palace Hotels, and these are the companies we are going to compare on the basis of their financials, operational numbers and future expansion plans in order to see which one of them had a better Q3 and holds more potential in the coming future
Leela Palaces Hotels & Resorts Ltd
Founded in 1986, The Leela Palaces, Hotels & Resorts Ltd is a leading luxury hospitality company in India, engaged in the ownership, development, and operation of premium hotels and resorts. The company focuses on luxury accommodation, fine dining, and curated guest experiences across key business and leisure destinations, catering to high-end domestic and international travelers. The company is headquartered in Mumbai.
According to Q3FY26 numbers the company currently has more than 4000 operational rooms across 14 of its properties, and has added 80 more at its Rajasthan property. In the company saw its RevPAR or Revenue Per Available Room number go from Rs 12,381 last year to the current Rs 14,758 which is a 19 percent YoY growth.
As of the latest quarter the company has 9 properties in its pipeline and also expects 1,046 more rooms to add to its total number in the coming years. The company also expects to reach an EBITDA of Rs 2000Crore by FY30.
In the latest quarter the company saw a YoY revenue growth of 23 percent, going from Rs 370 Cr in Q3FY25 to Rs 457 Cr in Q3FY26, while the QoQ went up by 47 percent from Rs 311 Cr in Q2FY26. The YoY Net Profits grew by 164 percent, going from Rs 56 Cr in Q3FY25 to Rs 148 Cr in Q3FY26, while the QoQ growth stood at 97 percent from Rs 75 Cr in Q2FY26. Historically, the company’s sales have consistently surged in the March quarter, driven by the holiday season.
Lemon Tree Hotels Ltd
Incorporated in 1992, Lemon Tree Hotels Ltd is India’s largest mid-priced and third-largest overall hotel chain, operating across the upscale and mid-priced segments, including upper-midscale, midscale, and economy categories. The company offers superior, differentiated services with a strong value-for-money proposition. The company is headquartered in New Delhi.
According to Q3FY26 number, the company has 11,772 total rooms, which is a 14 percent YoY growth from last years 10,317 rooms, while also witnessing a 362 bps QoQ growth in occupancy levels to the current 73 percent occupancy, but this number fell on YoY basis by 82 bps. The company also saw a 9 percent growth in RevPAR or Revenue Per Available Room as it went from Rs 5,018 of last year to the current Rs 5,494 in Q3FY26.
In this quarter the company signed several properties and currently stands at a total pipeline of 1,855 rooms. The company has also given a guidance of EBITDA of Rs 1000 Cr by FY28. It expects its total number of rooms to reach 22,000 in the coming three years of time.
In the latest quarter the company saw a YoY revenue growth of 14 percent, going from Rs 355 Cr in Q3FY25 to Rs 406 Cr in Q3FY26, while the QoQ went up by 33 percent from Rs 306 Cr in Q2FY26. The net profits have gone up by 2.5 percent, going from Rs 80 Cr in Q3FY25 to Rs 82 Cr in Q3FY26, while the QoQ went up by 95 percent from Rs 42 Cr in Q2FY26. Similar to Leela Palaces Hotels & Resorts Ltd, Lemon Tree Limited also witnesses surges in its sales around the Q4s.
The Bottom Line
Overall, both Leela Palaces and Lemon Tree delivered a strong Q3, reflecting robust industry demand. Leela stood out on luxury positioning and higher RevPAR, while Lemon Tree benefited from a larger room base and wider reach. Going ahead, Leela targets 1,046 new rooms and Rs 2,000 crore EBITDA by FY30, while Lemon Tree plans 22,000 rooms and Rs 1,000 crore EBITDA by FY28.
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