Sharekhan Stock Picks: The hotel industry, which went through a slightly uneven second quarter, is once again drawing attention from investors. Sharekhan’s latest report suggests that the sector may be heading into a stronger phase over the next few months. The brokerage has reviewed Lemon Tree Hotels, Chalet Hotels, Samhi Hotels and Indian Hotels Company, and its overall stance remains upbeat. Among these, one stock has been flagged for a potential 40 per cent jump, making it a key name to track in the hospitality space.
Why Q2 was soft — and Why it might not matter now
The April–September period brought a mix of setbacks: unusually heavy rains, slower air travel after safety concerns, ongoing renovation work at several properties and geopolitical tensions in a few markets. These factors restricted room availability and also affected travel sentiment. Even then, most companies managed to post decent numbers. According to Sharekhan, early signs in the current quarter point toward a meaningful pick-up in demand, which could lift the entire sector through H2FY26 and FY27.
Lemon Tree remains the brokerage’s top pick. Sharekhan has assigned a target of Rs 208, compared with its current level of Rs 148, indicating a potential rise of close to 40 per cent.
During Q2FY26, the company recorded an 8 per cent improvement in revenue, while ARR increased by 6 per cent. Occupancy edged up too, reaching 69.8 per cent. Profit margins came under pressure due to tech upgrades and renovation activity, but management expects the impact to fade once these projects are completed. The group has a sizeable growth pipeline—121 hotels with 9,118 rooms—which builds a strong base for its next expansion phase.
Chalet Hotels share price target
Chalet Hotels delivered a stronger-than-anticipated performance in the September quarter. Sharekhan has kept its positive view intact and set a target price of Rs 1,172 against the CMP of Rs 885. The company posted 95 per cent revenue growth, backed by better operating performance.
It has also rolled out a new upscale brand, ATHIVA Hotels & Resorts, under which around 900 additional keys are planned. Another positive is that its commercial real estate arm now comfortably manages debt servicing, freeing up hotel earnings for growth-oriented investments.
Samhi Hotels share price target
For Samhi Hotels, the brokerage has maintained its constructive view, placing the target at Rs 247 (CMP: Rs 175). Sharekhan expects an improvement in RevPAR and EBITDA over the coming quarters. Based on its estimates, the company’s EV/EBITDA multiple may ease from 9.8x in FY25 to 6.1x by FY28, indicating healthier profitability. Samhi’s presence in prime locations continues to support cash flow stability.
Indian Hotels Company share price target
Sharekhan has also issued a BUY call on Indian Hotels, with a target of Rs 891 compared with the current price of Rs 718. The group is expanding its presence across premium, business and leisure categories. Though Q2FY26 remained stable on the revenue front, tight cost controls helped maintain financial strength. Management expects stronger demand through the festival period and better traction from foreign travellers.
Why the sector looks strong going ahead
Sharekhan believes several factors will support hotel operators in the near term:
A busy festive and wedding season
Higher inflow of international tourists
Strong convention, corporate and event-related demand
Limited new room supply in key cities
Rapid expansion in non-metro markets such as Lucknow, Dehradun and Udupi