EIH Ltd - Q1FY21 Result Update - ICICI Securities

EIH Ltd reported a weak set of Q1FY21 numbers as business remained almost shut on account of lockdown. Revenues for the quarter fell ~90.2% YoY to Rs. 28.5 crore. The business was restricted to stranded guests and accommodation requirements of guest rendering essential services during the quarter. The company managed to curtail operating expenditure by over 57% YoY to Rs. 154 crore. The major reduction was in other expenses that were down 51% YoY to Rs. 61 crore. This helped restrict EBITDA losses to Rs. 125 crore for the quarter. After adjusting for tax expenses, net loss came in at Rs. 118.2 crore for the quarter.

Valuation & Outlook

The current pandemic environment has thrown up severe challenges to the entire hotel industry. However, we believe strong players would emerge even stronger out of this crisis once normalcy resumes. EIH, with its strong B/S and strategic property locations across key destinations is among them. At the CMP of Rs. 79, the stock offers healthy upside potential and is currently trading at a significant discount (i.e. at ~50% of replacement value). Hence, we upgrade the stock to BUY with a revised target price of Rs. 95/share (i.e. @ 19x FY22E EV/EBITDA).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_EIHLtd_Q1FY21.pdf

Shares of EIH LTD. was last trading in BSE at Rs.81 as compared to the previous close of Rs. 78.9. The total number of shares traded during the day was 358245 in over 2955 trades.

The stock hit an intraday high of Rs. 84.4 and intraday low of 79. The net turnover during the day was Rs. 28891972.

Source : Equity Bulls

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