**Inox Leisure** - Q4 FY20 (Audited –Cons)**
CMP: 283
Total income from operations 371.5 Cr
478.9 Cr (-22.36%) YoY | 512.9 Cr (-27.52%) QoQ
Year ending revenue: 1,897 Cr Vs. 1,692 Cr (12.11%)
Net Profit of (20.6) Cr
73.1 Cr (-127.87%) YoY 54.2 Cr (-137.23%) QoQ
Year ending Net profit: 128.5 Cr Vs. 199.1 Cr (-35.61%)
EPS (in Rs.) (8.35)
4.97 YoY | 3.56 QoQ
Year ending EPS: 1.53 Vs. 14.19
View: Result is in line with the expectation. YoY revenue declined and company also posted losses in this quarter. The COVID-19 pandemic and the resultant lockdown declared by the Government in March 2020 has impacted the entire entertainment industry and consequently the business activities of the Group are also adversely affected.
**Business Updates & Highlights**:
Q4FY20 EBITDA is around INR 40 Cr Vs. 102.6 Cr in Q4FY19 therefore declined by 60.7% in YoY. EBITDA Margin was around 10.7% in Q4FY20.
FY20 EBITDA grows 7% to Rs. 347 Crores Vs. 324 Cr in FY19 up by 7% in YoY.
**Key business updates**
FY20 company added 58 screens. INOX now operates 626 screens across 147 multiplexes in 68 cities. 17 Screens added in the Q4FY20.
Reduction in rent and common facility charges for the shutdown period due to invocation of force majeure clause under the respective lease agreements, due to COVID-19 pandemic. The Company has already initiated effective steps to reduce its operational costs, including invoking the force majeure clause under various lease agreements due to COVID-19 for its multiplex premises, contending that rent and CAM charges for the shutdown period are not payable.
**Financial**
ROE and ROCE is around 17% and 23% respectively and book value per share is around INR 65 and share is currently trading at 4.3x of its book value. Company is currently trading at annualized PE of around 154 which is too expensive as per Industry benchmark. Promoter holding is around 51.9% in the company which is stable and fair. FIIs and Mutual fund hold around 9.3% and 22.3% in the company. Cash and cash equivalent from operating activities as of March 2020 is around INR 474 Cr Vs. 279 Cr as of March 2019. Debt including lease liabilities is also increasing YoY and finance cost in this quarter is also too high which is around INR 221 Cr as of March 2020 Vs. 24 Cr in March 2019.
Position: Share strong support price is INR 210. Long term investor can continue with the company based on their risk appetite.
**Share View**: Share price high 510 (52 week) and now 283 almost 45% corrected from their peak. INOX Leisure Limited (INOX) is amongst India’s largest multiplex chains with 147 multiplexes and 626 screens in 68 cities. Megaplex at Inorbit Mall Malad, Mumbai is world’s first multiplex with 6 different cinema viewing formats. Megaplex at Palassio Mall Lucknow is city’s largest multiplex.
Opportunities: In this year company generated highest revenue despite lockdown imposed in the month of March 20. Historic footfall of 66 Mn reported for the year. 58 screens added in FY20 – Milestone of 600 screens crossed . Launch of two Megaplex cinema properties and introduction of new cinema technologies like MX4D and ScreenX for the first time in country.
Risk: The current quarter Q1FY21 and Q2FY21 and Q3FY21 can be more challenging because Cinema is still shut and once opened still doubt they can generate good source of revenue in future. Further JIO Cinema is also providing more challenging since lockdown many series which releasing were pending directly released via OTT mechanism. The public perception also changed towards Cinema since proper social distancing with movie experience can be posed more challenging in future.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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