Buy Inox Leisure: target of Rs 470: Sharekhan

HDFC Securities research report's outlook and valuations:  "The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar."

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26 Aug, 2025 12:21

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Sharekhan's research report on Inox Leisure

We expect Inox Leisure’s business to recover in H2FY2022 as quality content has lined-up for festive season and COVID-19 restrictions to ease across many states. Expect a larger portion of eligible population will be vaccinated by end of December 2021. As new movies failed to excite OTT audiences during the pandemic, we believe most of movie producers will continue to depend on theatrical releases, which would drive occupancy rates of multiplexes going ahead. We expect both footfalls and occupancy rate would be around 26 lakh and 12% in Q2FY2022 compared to 8 lakh and 12%, respectively, in Q1FY2022. We estimate net loss to be at Rs. 71 crore in Q2FY2022 versus a net loss of Rs.122 crore in Q1.

Outlook

We maintain a Buy on Inox Leisure with a revised PT of Rs. 470, given meaningful recovery in 2HFY22, healthy pent-up demand and lower structural risk from the OTT segment.

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