Buy Cox & Kings; target Rs 127: ICICIdirect.com

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26 Aug, 2025 12:21

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ICICIdirect.com's report on Cox & Kings

"Cox & Kings' (C&K) Q1FY14 performance remained above our estimates both at the topline and bottomline level due to better-than-expected growth in leisure and education & camping division of HBR led by onset of the peak season. Operating revenues for the quarter improved 10.2 percent YoY to Rs 586.2 crore. The overall growth is mainly attributable to an improved performance from the leisure division (outbound domestic) and pick-up in the camping business. The domestic leisure segment grew 16 percent YoY to Rs 145 crore while revenues of the international leisure segment declined 11 percent YoY to Rs 108 crore due to a subdued macro environment. The performance of the education and camping division improved due to this being the peak season and on strong demand. The education division exhibited 14 percent YoY growth and the camping division witnessed 22 percent YoY growth. Overall margins also showed improvements due to reduced advertising spend (down 20 percent YoY). Reduced depreciation in its Holiday Break camping division and exchange fluctuation gain of around Rs 60.6 crore aided it to achieve a PAT of Rs 134.8 crore, above I-direct estimates of Rs 103.8 crore. Going forward, with the peak season of HBR and strong order book position for education (84 percent booked) we see good earnings visibility in H1FY14."

"The company is focusing on trimming down debt through cash generated from the business, which, we believe, would improve its profitability, going ahead. However, considering the tough economic environment, we revise our target multiple downward and arrive at revised target price of Rs 127/share (i.e. at 5.0x FY15E EPS)," says ICICIdirect.com research report.

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