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Cox & Kings (Q2 FY13)

India Infoline News Service | Mumbai | November 20, 2012 12:09 IST

Cox & Kings (Q2 FY13)

CMP Rs138, Target Rs185, Upside 34.1%

  • C&K posted consolidated Q2 EBIDTA of ~Rs3.9bn on revenues of ~Rs6.9bn with PAT of ~Rs1.5bn-numbers are not comparable yoy due to HBR consolidation for just 3 days in Q2 FY12

  • India revenues jumped 43% yoy driven by strong performance from MICE segment, traction from newer distribution channels and better than expected response to new product Instant Holidays due to a  number of long week ends; EBIDTA margin too improved to 45%

  • HBR update: Education segment (revs ~Rs1.8bn, +31% yoy) put in a strong performance driven by higher than industry growth and currency appreciation; Education EBIDTA too jumped 23% yoy to Rs900mn. Camping division saw 8% decline in net revenues to ~Rs2.5bn

  • International leisure business saw flat revenues at Rs1.8bn with 6% drop in EBIDTA as US, Australia and Dubai remained sluggish while Japan continues to be a dampener with operating losses in Q2; mgmt expects Japan to be about break even in the next fiscal; Hotel Breaks segment of HBR impacted by reduced allocation due to London Olympics

  • A full quarter of peak season for HBR led to reported PAT of ~Rs1.5bn though impacted by loss in other income due to a cumulative Rs120mn in one time expense at HBR/Prometheon; although the H2 FY13 is traditionally lean for HBR, we expect the impact to be cushioned by lower interest costs (due to infusion of CVC equity and subsequent debt repayment) and commensurate lower share of H2 FY13 HBR losses due to dilution. Retain BUY for 9-mth target of Rs185. 

Results table (consolidated)
(Rs m)Q2 FY13Q1 FY13% qoqH1 FY13% yoy
Net sales6,8901,367403.912,209315.8
Staff costs(1,971)(465)324.0(3,727)339.3
Advt expenses(243)(83)191.8(607)107.4
Other expenses(803)(275)191.8(1,607)190.4
Operating profit3,872544612.16,269404.6
OPM (%)56.239.81,643 bps51.3904 bps
Other income(127)98-(57)-
Effective tax rate (%)42.232.11,007 bps54.61,706 bps
Associate share107(1)-258-
Adjusted PAT1,447250478.32,208257.8
Adj. PAT margin (%)21.018.3270 bps18.1(293) bps
Exceptional items292419.8736-
Reported PAT1,476274438.52,944351.1
Source: Company, India Infoline Research

Financial summary
Y/e 31 March  (Rs m)FY11FY12FY13EFY14E
yoy growth (%)24.468.7109.45.2
Operating profit2,3011,6736,5977,054
OPM (%)46.320.037.638.2
Reported PAT1,2914162,0762,613
yoy growth (%)(3.6)(67.8)399.025.9
EPS (Rs)
P/E (x)14.645.39.17.2
P/BV (x)
EV/EBITDA (x)7.732.87.76.8


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