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EIH (Q1 FY11) – SELL (Target price Rs101, Downside 21.7%)

India Infoline Research Team / 12:35 , Aug 02, 2010

CMP Rs129, Target price Rs101, Downside 21.7%

  • EIH reported a 6.3% yoy drop in revenues; Q1 of last year included Rs527mn of insurance claims which was absent in Q1 FY11 as Oberoi, Mumbai re-opened in April’ 10
  • A surge in all the major cost components, especially staff and other overheads, led to ~19ppts yoy fall in OPM
  • Commissioning of Trident at BKC, Mumbai led to higher depreciation which coupled with poor margin performance led to pre-tax loss of Rs281mn vs. profit a year ago

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