EIH Ltd - Q4FY21 First Cut - ICICI Direct

(CMP: Rs. 90; MCap: Rs. 5,625 crore)

EIH's operational performance for Q4FY21 remained weak, mainly impacted by impairment loss and higher other costs despite improvement in the topline on QoQ basis.

Q4FY21 Earnings Summary

- EIH's revenues for the quarter grew ~20.5% QoQ to Rs. 187.9 crore (vs. I-direct estimates of Rs. 149 crore) led by improved traction in the leisure segment. On YoY basis, the revenue remained lower by 46.5% YoY as foreign tourist arrivals continued to remain affected due to Covid induced restricted travel

- Sharp rise was witnessed in the other expenditure (up 26.8% QoQ to Rs. 107.2 crore). However, lower employee costs restricted total increase in the expenses to 17.1% (lower than the topline growth). This helped to restrict the EBITDA losses to Rs. 26.7 crore vs EBITDA loss of Rs. 27.3 crore in Q3FY21 and Rs. 42.9 crore in Q2FY21

- Net loss remained higher at Rs. 68.1 crore (vs net loss of Rs. 41.5 crore in Q3FY21 as it included impairment loss of Rs. 28.7 crore pertaining to non-current investments

- Total debt on the books reduced by Rs. 144 crore to Rs. 277 crore with the help of fund raising of Rs. 349.7 crore through rights issue in October 2020

The second wave of pandemic has again started impacting domestic demand, which is likely to delay the recovery further till the time situation comes under control. As the company derives majority of revenues from the domestic market with Mumbai and Delhi being the key revenue contributor, we expect the recovery to further get delayed due to ongoing second wave of pandemic. However, 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.89.85 as compared to the previous close of Rs. 90. The total number of shares traded during the day was 55702 in over 889 trades.

The stock hit an intraday high of Rs. 91.3 and intraday low of 88.85. The net turnover during the day was Rs. 5012762.

Source : Equity Bulls

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