Christmas, Diwali favourable for Q3 business: Cox & Kings

Travel company Cox & Kings posted an increase of 13 percent in revenues and operating profits for quarter ended September. Speaking to CNBC-TV18, Anil Khandelwal, CFO, Cox & Kings, says 70 percent of the company's total business is incurred in the first half of the year. The company's Leisure India segment has grown 15 percent in Q2, he says, adding that festivals like Christmas and Diwali will be favourable for the India business in the third quarter. On international business, Khandelwal says that LateRooms acquisition will start reflecting in the company's numbers going forward.Below is the transcript of Anil Khandelwal’s interview with Sonia Shenoy and Latha Venkatesh on CNBC-TV18.Sonia: Good quarter, net profits this time of Rs 118 crore versus a loss earlier, but that was of course, due to a couple of reasons. But this time on the base of this Rs 118 crore of profits, where do you see the growth in the second half of the year?A: If you see this first quarter, all the divisions have performed quite in line with expectations, India has performed exceedingly well and from our perspective, H1 is always relatively a bulkier part of our portion, our business and H2, relatively from the education side is off-season. But nevertheless, from an annual perspective, we expect a good set of numbers for Q3 and Q4 as well.If you see this particular quarter, we had a 13 percent increase in net revenues as well as 13 percent increase in earnings before interest, taxes, depreciation and amortisation (EBITDA).Latha: it would have been so much better to speak to Cox and Kings about the ensuing holiday season and plan your holidays rather than discuss numbers. But, nevertheless, when you say that your Q2 normally tends to be a little mellow, you have done about Rs 685 crore in terms of income. How much does that normally, you do about 10 percent, less than that in second half?A: Not really 10 percent as such, because education, 70 percent of our business, gets actually done in H1. So, a bulk of it actually gets done in the H1. I would say H2 would be almost around 30 percent of what we do in H1.Latha: What is the sense you are getting in terms of growth though year-on-year (Y-o-Y)? Does it look like vacation years are finally coming around and buying more? Y-o-Y terms, does second half look better than last year’s second half?A: The trend in terms of booking holiday’s has changed. And if you track it from the last 5-6 years, rather than a summer holiday season, it has become more around all over the year phenomenon. So, specially the Diwali, we are quite optimistic about the booking trends which we are seeing as well as for the Christmas holidays. So, I am quite positive about what we can pan out in terms of the India business.Sonia: Tell us a little bit about the international leisure business which is 30 percent of revenues. That is the segment that Latha and I are interested in the most – international travel. Just a 5 percent topline is what you have seen this quarter. When will you get back to double digit growth?A: Let me clarify the international travel. It does not cover the Indians travelling overseas. That actually comes in the leisure India business which has grown by 15 percent. So, the leisure international travel is primarily our international subsidiaries which sell holiday packages. Over there, yes, you are right in terms of EBITDA has been flattish, but from the perspective of acquisition of LateRooms, I think the international leisure will start picking up from next year onwards.