Prabhudas Lilladher has given Buy recommendation for Inox Leisure with a target price of Rs. 681 in its research report issued on May 03, 2022
Prabhudas Lilladher’s research report on Inox Leisure
INOL reported decent performance with pre IND-AS EBITDA margin of 4.5% (PLe of 7.0%) due to strong recovery in the month of March. ATP and SPH have witnessed significant jump led by blockbuster content while management highlighted that ad-revenue (key margin lever) is expected to reach pre-COVID base within 2 quarters. After being marred by COVID for last 2 years, normalcy has finally set in and we expect the momentum to continue given 1) strong content pipeline (20 titles to be released this Friday including Dr Strange, a Marvel Studio production) 2) easing occupancy restrictions and 3) pick up in vaccination drive. Given improved operating environment, we expect revenue/EBITDA CAGR of 8.7%/10.5% over 4 years on a pre-COVID base of FY20.
Retain BUY on the stock with a TP of Rs681 (arrived from the merger swap ratio of 3:10 with PVR) after assigning EV/EBITDA multiple of 15.5x (no change) to the merged entity.