Inox Leisure - Result Update - ICICI Securities

Inox Leisure's Q4FY20 performance was marred by Covid-19 impact along with weak box office collections in February. Footfalls declined ~29% YoY to 12.8 million (mn), partially offset by ~7% ATP growth that led net box office revenues to decline 23.2% YoY to Rs. 218 crore. F&B revenues declined 23.6% to Rs. 94 crore with SPH at Rs. 78, up 6.8% YoY. Ad revenues declined ~19% to Rs. 35 crore. EBITDA (ex-Ind-AS 116) came in at Rs. 34.9 crore, with margins of 9.4%, down 1077 bps YoY, impacted by negative operating leverage. On a reported basis, EBITDA was at Rs. 110 crore, margin of 29.6%. Given the write-off of Rs. 68.9 crore in net deferred tax asset while shifting to new tax rate, the company reported a net loss (without impact of Ind-AS 116) at Rs. 2.5 crore. On a reported basis, net loss was at Rs. 82.2 crore.

Valuation & Outlook

Leisure activities and discretionary spend will take a backseat during a stressed macroeconomic setup in the near term. Nevertheless, notwithstanding the recent Covid-19 scare, the structural story of multiplexes as a proxy play on urban discretionary remains. We will closely track the reopening of cinemas amid Covid-19 and turn buyer only when we witness footfall revival and stability. We maintain HOLD rating and value the stock at 8x FY22E (ex-Ind-AS) EV/EBITDA with a target price of Rs. 255/share.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Inox_Q4FY20.pdf

Shares of INOX LEISURE LTD. was last trading in BSE at Rs.283 as compared to the previous close of Rs. 288.45. The total number of shares traded during the day was 150190 in over 5574 trades.

The stock hit an intraday high of Rs. 317.75 and intraday low of 275. The net turnover during the day was Rs. 44734426.

Source : Equity Bulls

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