EIH Ltd - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 76; MCap: Rs. 4,352 crore)

EIH's Q1FY21 operational performance remained weak due to complete business shutdown due to pandemic environment.

Q1FY21 Earnings Summary

- EIH's revenues for the quarter declined ~90.2% YoY to Rs. 28.5 crore (vs. I-direct estimates of Rs. 62.8 crore). The business was restricted to stranded guests and accommodation requirements of guest rendering essential services during the quarter. The flight kitchens business catered to airlines operating repatriation flights, crew and cargo flights.

- The company managed to curtail the operating expenditure by over 57% YoY to Rs. 154 crore. The major reduction being in other expenses that were down by Rs. 51% YoY to Rs. 61 crore. This helped to restrict the EBITDA losses to Rs. 125 crore for the quarter.

- Net loss came in at Rs. 118.2 crore for the quarter after adjusting for tax expenses.

- On the liquidity front, the company has access to sanctioned borrowing facilities for working capital requirements worth Rs. 550 Crore of which Rs. 335 crore was unutilised as on 30th June, 2020.

Following the COVID-19 outbreak and subsequent lockdown, hotel and flight operations were mandated to remain non-operational. This had a severe impact on business at the Company's and its subsidiaries' hotels and other operations across India and overseas for the quarter. Similar restrictions in other countries also affected business from various international markets.

Through an order dated 30th May, 2020, the Ministry of Home Affairs (MHA) allowed hotels and restaurants to resume operations from 08th June, 2020 in a phased reopening of areas outside the containment zones. Domestic airlines commenced operations from 25th May, 2020 with partial capacity approved by the Government, which is expected to gradually increase over the months going forward. Date of commencement of full service international flights is yet to be announced by the Government, although several 'Air Bubble' flights have been allowed to operate between India and other specified countries effective 18th July, 2020.The Company, despite the unpredictable times, is relatively insulated from the risk of a liquidity crisis owing to its healthy financial position and debt free status.

We would be coming out with a detailed report soon post the conference call.

Shares of EIH LTD. was last trading in BSE at Rs.75.1 as compared to the previous close of Rs. 76.1. The total number of shares traded during the day was 232816 in over 2164 trades.

The stock hit an intraday high of Rs. 80.3 and intraday low of 72.7. The net turnover during the day was Rs. 17845304.

Source : Equity Bulls

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