Q3FY21 Result Update - EIH Ltd - ICICI Direct

EIH's operational performance in Q3FY21 improved sequentially with the pick-up in domestic travel. EIH's revenues for the quarter grew ~157.9% QoQ to Rs. 155.9 crore (vs. I-direct estimate of Rs. 114.8 crore). However, on YoY basis, revenue declined 63.1% as foreign tourist arrivals continued to remain affected by Covid induced restricted travel. The company managed to curtail operating expenditure by over 39% YoY to Rs. 183.2 crore. The major reduction was in other expenses that were down 44.4% YoY to Rs. 84.5 crore. This helped restrict 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 in Q2FY21. EIH is well placed on the liquidity front post fund raising of Rs. 349.7 crore through rights issue in October 2020.

Valuation & Outlook

The company has initiated various steps to revitalise itself during this challenging times. This would not only help it to endure but also flourish when business returns to normalcy. With a strong b/s and strategic property locations across key destinations, the company is best positioned to ride on tourism growth story. At the CMP of Rs. 93, stock trading at adjusted EV/room of Rs. 1.9/room (at 60% of its fair value). Hence, we maintain BUY with a revised TP of Rs. 125/share (@ 28x FY22E EV/EBITDA) (earlier TP Rs. 95).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_EIH_Q3FY21.pdf

Shares of EIH LTD. was last trading in BSE at Rs.96.1 as compared to the previous close of Rs. 93.05. The total number of shares traded during the day was 58329 in over 508 trades.

The stock hit an intraday high of Rs. 96.85 and intraday low of 93.9. The net turnover during the day was Rs. 5602603.

Source : Equity Bulls

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