Buy Inox Leisure; target of Rs 397: Prabhudas Lilladher
Prabhudas Lilladher is bullish on Inox Leisure has recommended buy rating on the stock with a target price of Rs 397 in its research report dated February 04, 2021.
February 08, 2021 / 03:41 PM IST
Prabhudas Lilladher's research report on Inox Leisure
Ind-AS adjusted EBITDA loss stood at Rs855mn (excluding OI) versus our estimate of Rs737mn as rigorous cost cutting initiatives resulted in fixed opex burn of ~Rs250-300mn per month during the quarter. While 4QFY21 is more or less expected to be a replica of 3QFY21, removal of occupancy caps and expectation of big budget releases towards end of March indicate normalcy is expected to kick-in with the onset of FY22. Further, current trends on ATP (higher/similar to pre-COVID levels for fresh content) and SPH (down only 9.9% YoY from pre-COVID base) indicate no structural change in consumer behavior/mindset post-COVID. As a result, we keep our EBITDA estimates broadly intact (marginal decline of 2.1%/3.1% in FY22/FY23 respectively).
We maintain BUY with a revised TP of Rs397 (earlier Rs393) valuing the stock at EV/EBITDA multiple of 10x (earlier 9.5x) our FY23E estimates. INOL’s low gearing (net debt free as of Jan-2021) and stringent cost control gives us additional comfort until normalcy resumes.
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