EIH Ltd - Q4FY20 Result Update - ICICI Securities

EIH Ltd reported a weak set of Q4FY20 numbers mainly due to the lockdown impact. However, numbers were better than estimates. Standalone revenue for the quarter fell 18.5% YoY to Rs. 351 crore (vs. I-direct estimate of Rs. 316 crore). The decline is mainly attributable to loss of hotel business from March onwards due to nationwide imposition of lockdown. Overall occupancy levels fell to 63.7% vs. 78% reported last year (LY). Average room rates broadly remained steady in the domestic market. At the consolidated level (including international business), occupancy levels fell to 58% vs. 74% reported LY. As a result, RevPAR of both domestic, international fell 19%, 18.4% respectively. Lower revenues led to a decline in EBITDA margins by 481 bps YoY to 19.5%. However, they were above I-direct estimate of 14.8%. On an absolute basis, EBITDA fell 34.7% YoY to Rs. 68.5 crore. PAT, however saw growth of 34.5% YoY as last year EIH incurred exceptional loss of over Rs. 84 crore in its flight catering business.

Valuation & Outlook

Strong B/S of EIH and strategic property locations across key business and leisure destinations also give us strong visibility for the company for the future. However, hospitality being the worst affected sector of Covid with high uncertainty in the timeline of its recovery, we downgrade the stock to HOLD rating with a revised TP of Rs. 73/share (i.e. @ 14x FY22E EV/EBITDA).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_EIHLtd_Q4FY20.pdf

Shares of EIH LTD. was last trading in BSE at Rs.64.35 as compared to the previous close of Rs. 63.6. The total number of shares traded during the day was 50855 in over 651 trades.

The stock hit an intraday high of Rs. 64.75 and intraday low of 63. The net turnover during the day was Rs. 3253752.

Source : Equity Bulls

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