ICICI Direct is bullish on Inox Leisure has recommended buy rating on the stock with a target price of Rs 435 in its research report dated October 24, 2019.
ICICI Direct's research report on Inox Leisure
Inox Leisure’s Q2FY20 performance was ahead of expectations with higher-than-expected footfall driving the revenues beat, which percolated to superior EBITDA and bottomline. Footfalls grew 39% YoY to 19 million (mn) (also aided by relatively benign footfall base on account of BMS exit in Q2FY19) driving the net box office revenues growth of 50.7% YoY at Rs 311 crore and F&B, which grew 48.6% to Rs 141 crore with SPH at Rs 79, up 8.2%. Ad revenues grew 5% to Rs 40 crore, a tad better than our expectation of 2% YoY growth. EBITDA (without impact of Ind-AS 116) came in at Rs 103 crore, ahead our estimates of Rs 91 crore. Margins of 19.8% were also above our estimates of 18.7%, driven by operating leverage from superior topline growth. On a reported basis, EBITDA was at Rs 167.8 crore, with margins of 32.3%, ahead of our estimates. PAT (without impact of Ind-AS 116) came in at Rs 51 crore, a staggering growth of 326% YoY. Reported PAT at Rs 35.1 crore was also higher than our expectations.
Inox continues to deliver industry leading growth across metrics. We remain constructive on Inox with multiplexes poised for strong growth ahead. We maintain our BUY recommendation and value it at 9.5x FY21E EV/EBITDA – ex-Ind-AS (~30% discount to PVR target multiple of 13.5x EV/EBITDA) to arrive at revised target price of Rs 435/share.
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