EIH Ltd - Q2FY21 First Cut - ICICI Direct

(CMP: Rs. 74; MCap: Rs. 4,634 crore)

EIH's Q2FY21 operational performance remained lower than our estimates as premium segment hotel remained worst affected due to international travel ban along with weak business segment demand due to pandemic environment.

Q2FY21 Earnings Summary

- EIH's revenues for the quarter declined ~79% YoY to Rs. 60.4 crore (vs. I-direct estimates of Rs. 69.9 crore) though it improved by 112% QoQ due to very low base

- The company managed to curtail the operating expenditure by over 42% YoY to Rs. 155.6 crore. The major reduction being in other expenses that were down by Rs. 46% YoY to Rs. 69 crore. This helped to restrict the EBITDA losses to Rs. 95.2 crore vs EBITDA loss of Rs. 125 crore in Q1FY21

- Net loss came in at Rs. 115.2 crore for the quarter vs net loss of Rs. 118.2 crore during Q1FY21. Adjusted net loss for the quarter were at Rs. 95 crore after adjusting for impairment loss of Rs. 20 crore

- The company is well placed on the liquidity front post fund raising of Rs. 349.7 crore through rights issue in the month of October-20

The travel and tourism industry has been the worst affected sector so far due to lock-down. Now with unlocking of economy, the hotel business is gradually picking up with revival of demand being first getting witnessed in the domestic leisure segment along with rising preference towards trusted brand. The companies are also taking measures to drive more efficiencies through cost optimization. EIH, despite the unpredictable times, is relatively insulated from the risk of a liquidity crisis owing to its healthy financial position and comfortable debt position.

We would be coming out with a detailed report soon post the conference call.

Shares of EIH LTD. was last trading in BSE at Rs.74.3 as compared to the previous close of Rs. 74.35. The total number of shares traded during the day was 10549 in over 216 trades.

The stock hit an intraday high of Rs. 75.15 and intraday low of 73.75. The net turnover during the day was Rs. 784384.

Source : Equity Bulls

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