ICICI Direct's research report on Cox & Kings
The outlook for leisure India is expected to be positive as the company has witnessed robust summer booking in the quarter. Further, with improved consumer sentiments, a pick-up in corporate travel, increased income from pay commission and OROP are expected to drive topline growth in the next two years. In addition, C&K should be a key beneficiary of any positive policy announcements (visa on arrival) given the new government’s thrust on tourism.
We expect the company’s domestic leisure segment to remain healthy due to an improving macroeconomic outlook. However, through high exposure in the European market (through Holiday Break), we expect the overall revenue growth to remain muted. Further, elevated debt levels and higher cost will keep margins under check. Accordingly, we maintain HOLD recommendation on the stock with a revised target price of Rs 200/share (i.e. valuing at 8x FY 18E EPS). A major debt reduction remains a key trigger for re-rating of the stock from a longer term perspective.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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