Inox's revenue grew by 7.2% qoq to Rs3.2bn in Q4, but missed our estimates due to marginally lower footfalls, ATP and SPH. Although business disruption in Jan-Feb led to a 7.1% fall qoq in EBITDA, it was in line with estimates, led by cost management. ATP fell 3.5% and SPH was down 11.3% qoq due to the higher base. However, footfalls increased to 11mn from 9.4mn in Q3FY22 despite fewer operational days. The company's core revenue streams - ticketing and F&B - surpassed pre-Covid levels in March. Inox remains net-cash, which provides a cushion to manage any further disruptions arising from a new Covid wave. Continued strong box-office performance, recovery in ad revenues and timely merger approvals will be key near-term triggers for the stock.
Outlook
We have raised FY23-24 EBITDA estimates marginally. Maintain Buy with a revised TP of Rs640 (Rs665 earlier) as we cut the target multiple for pro-forma merged co. financials to 12.5x from 13.5x on higher CoE while rolling forward valuations to Jun'24E.
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