Q3FY17 revenue grew at a modest 7.4% YoY and PAT de-grew -23%YoY, impacted by demonetisation. Demonetisation influenced Average Ticket Price (ATP) which remained flat YoY and occupancy moderated to 31%. Advertisement revenue was impacted by cut in advertisement spends by companies in the wake of demonetization.
Outlook
Accommodating demonetisation and slowdown in capex we lower our FY17E & FY18E revenue by -2.2% & -1.8%, and PAT by -21% and -8.6% respectively. Despite the cut in earnings estimates, we expect strong improvement in balance sheet along with 32% earnings growth during FY19E. Accordingly, we shift from EV/EBITDA to P/E ratio. At 30x FY19E PE, we recommend Accumulate with a revised target price of Rs 1,440.
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