EIH Ltd - Q3FY21 First Cut - ICICI Direct

(CMP: Rs. 93; MCap: Rs. 5,815 crore)

EIH's operational performance for Q3FY21 improved sequentially with the pick-up in the domestic travel. As a result of which the numbers remained ahead of our estimates.

Q3FY21 Earnings Summary

- EIH's revenues for the quarter grew ~157.9% QoQ to Rs. 155.9 crore (vs. I-direct estimates of Rs. 114.8 crore). However, on YoY basis, the revenue declined by 63.1% as foreign tourist arrivals continued to remain affected due to Covid induced restricted travel.

- The company managed to curtail the operating expenditure by over 39% YoY to Rs. 183.2 crore. The major reduction being in other expenses that were down by 44.4% YoY to Rs. 84.5 crore. This helped to restrict the EBITDA losses to Rs. 27.3 crore vs EBITDA loss of Rs. 42.9 crore in Q2FY21.

- Net loss came in at Rs. 41.5 crore for the quarter vs net loss of Rs. 115.2 crore during Q2FY21.

- The company is well placed on the liquidity front post fund raising of Rs. 349.7 crore through rights issue in the month of October-20.

The travel and tourism industry has been the worst affected sector so far due to lock-down. Now with unlocking of economy, the hotel business is gradually picking up with revival of demand being first getting witnessed in the domestic leisure segment along with rising preference towards trusted brand. The companies are also taking measures to drive more efficiencies through cost optimization. With more focus on the cost control, we expect liquidity profile of the company to improve going forward once business gets back to normalcy. The company, despite the unpredictable times, is relatively insulated from the risk of a liquidity crisis owing to its healthy financial position and comfortable debt position.

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.92.8 as compared to the previous close of Rs. 94. The total number of shares traded during the day was 13213 in over 307 trades.

The stock hit an intraday high of Rs. 94.75 and intraday low of 92.3. The net turnover during the day was Rs. 1238545.

Source : Equity Bulls

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