Anand Rathi has given Buy recommendation for Inox Leisure with a target price of Rs. 340 in its research report issued on Apr 19, 2021

Anand Rathi’s research report on Inox Leisure

After trailing PVR for several years, we find Inox best suited to make the most of the situation as it has a strong balance sheet with Rs1.3bn net cash(vs. PVR’sRs11.3bn net debt), less cash burn/month till normalcy returns (Rs0.4bn vs. PVR’s Rs0.6bn) and has grown faster over FY17-FY20 on several key operating parameters: ATP (4%, vs. PVR’s 1% CAGR), spend/ head (9% vs. 7%) and ad revenue/screen (12% vs. 4%). All these factors enable Inox to expand faster in the next phase of the growth cycle and reduce the gap in the footprint with PVR (~643 screens, vs. PVR’s ~844).

Outlook

We introduce our FY23e and maintain our Buy rating with a new target price of Rs340 (earlier Rs292, valuing it at 10x FY23e EBITDA).

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