Hospitality firm Lemon Tree Hotels posted a strong recovery in Q2FY22 with occupancies reaching 51 percent against 30 percent in Q1FY22.

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With the unlocking of the economy and improved pace of vaccination, there was an improvement in travel demand which benefited Lemon Tree. The retail demand continued to remain strong while the corporate MSME demand is also improving.

With the return of the large corporate demand, travel as well as trade demand, the company expects to reach the pre-COVID level of revenues by H1FY23. The company posted 35 percent EBITDA margins in Q2FY22 which is similar to pre-COVID levels despite a much lower topline performance.

Bharat Gianani of moneycontrol.com expects an improvement of 450-500 basis points in the EBITDA margin once the company reaches the pre-COVID level of revenues.

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