Q4FY21 Result Update - EIH Ltd - ICICI Direct

EIH's operational performance in Q4FY21 was impacted by impairments and rise in other costs despite improvement in revenues. This led the company to report a net loss of Rs. 68.1 crore vs. loss of Rs. 41.5 crore in Q3FY21. Pick-up in leisure segment in January-February led to 20.5% QoQ growth in revenue to Rs. 187.9 crore (vs. I-direct estimate of Rs. 149 crore). However, it was down 46.5% YoY as foreign tourist arrivals continued to be affected by Covid induced restricted travel. There was a sharp rise in other expenditure (up 26.8% QoQ to Rs. 107.2 crore) due to spillover of some expenses related to previous quarter and some statutory dues. However, lower employee costs restricted total increase in expenses to 17.1% (lower than topline growth). This helped restrict 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 was 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.

Valuation & Outlook

With a strong balance sheet and strategic property locations across key destinations, the company is best positioned to ride the long-term growth story. At the CMP of Rs. 92, the stock trading at adjusted EV/room of Rs. 1.8/room (i.e. at 51% of its fair value). Hence, we maintain our BUY rating with an unchanged target price of Rs. 125 (@ 23.5x FY23E EV/EBITDA).

For details, click on the link below: Link to the report

Shares of EIH LTD. was last trading in BSE at Rs.91.6 as compared to the previous close of Rs. 89.45. The total number of shares traded during the day was 109590 in over 2101 trades.

The stock hit an intraday high of Rs. 93 and intraday low of 88.25. The net turnover during the day was Rs. 10072642.

Source : Equity Bulls

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