Inox Leisure - Q1FY21 Result Update - ICICI Securities

Inox Leisure reported a washout Q1FY21 as expected. Nationwide lockdown following Covid-19 outbreak resulted in complete suspension of business activities for multiplexes. It registered zero footfalls leading to almost nil revenues. Other operating income of just Rs. 30 lakh was reported. EBITDA (ex-Ind-AS 116) loss was at Rs. 35.9 crore, against EBITDA of Rs. 89.1 crore in Q1FY20. Losses were lower than expectations on account of cost reduction on power & fuel, R&M and other overheads fronts. Inox recognised Rs. 69.3 crore towards reduction of rental expenses following the invocation of Force majeure clause. Consequently, the company reported a net loss (ex- Ind-AS 116) at Rs. 52 crore. On a reported basis, net loss was at Rs. 73.6 crore.

Valuation & Outlook

Initial response post reopening and content pipeline holds the key for Inox' performance. Also, designed SOPs and other social distancing measures will lead to lower occupancies as well as increase in costs. Most importantly, the overall recovery will a function of how long is pandemic's tail. Nonetheless, Inox' liquidity position remains relatively strong in the near term and likely fund raising will further shore it up. 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. 250/share.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Inox_Q1FY21.pdf

Shares of INOX LEISURE LTD. was last trading in BSE at Rs.233 as compared to the previous close of Rs. 234.65. The total number of shares traded during the day was 24808 in over 656 trades.

The stock hit an intraday high of Rs. 239.05 and intraday low of 232.55. The net turnover during the day was Rs. 5805247.

Source : Equity Bulls

Keywords