Buy Cox & Kings;target of Rs 300:Sharekhan

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Sharekhan research report on Cox & KingsAs anticipated, Cox & Kings Ltd (CKL)’s consolidated revenue declined by 21% YoY to Rs685.4 crore in Q2FY2016. Its OPM declined by 588BPS to 46.4%. On a like-to-like basis, the company registered better performance with revenue and EBIDTA growing by 13% each during the quarter. The better performance on a like-to-like basis can be attributable to continued strong performance by leisure business in India, while Meininger saw strong growth in revenue and EBIDTA during the quarter.We have broadly maintained our earnings estimates for FY2016 and FY2017. The management has indicated of better performance in the coming quarters by all business verticals. Also, the acquisition of LateRooms (UK) will improve the business fundamentals of its leisure business in India and other geographies in the long run. Despite 31% appreciation in the stock price since our last update (dated on September 22, 2015), the valuation at 9.6x its FY2017E EPS remains attractive. Hence, we have maintained our Buy recommendation on the stock with a price target of Rs300.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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