IIFL is bullish on Cox & Kings has recommended buy rating on the stock with a target price of Rs 365 in its research report dated November 30, 2016.
IIFL's research report on Cox & Kings
For the India leisure travel business too, we assign a 10x EV/Ebitda multiple. This is consistent with the multiple at which C&K’s shares traded for a period of time before the Holiday break acquisition and is also broadly in line with the historical valuations of Thomas Cook India, whose core business is a close comparable for C&K. We think the growth potential of the India business justifies at least a 10x multiple. For the international leisure travel division, we assign a 6x EV/Ebitda multiple, consistent with the multiples paid by C&K and later by CVCI when acquiring Holiday break. Our SOTP suggests substantial room for upside in C&K’s share price predicated on continued healthy growth in revenue and Ebitda and continued de-leveraging. We roll forward our SOTP-based target price to Sep-2017 (from Mar-2017 previously), leading to an increase in TP to Rs 365 (from Rs 335 previously).
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