Cox & Kings (Q2 FY13)

Cox & Kings (Q2 FY13)

Nov 20, 2012 06:11 IST India Infoline News Service

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 FY13 Q1 FY13 % qoq H1 FY13 % yoy
Net sales 6,890 1,367 403.9 12,209 315.8
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 profit 3,872 544 612.1 6,269 404.6
OPM (%) 56.2 39.8 1,643 bps 51.3 904 bps
Depreciation (541) (63) 758.3 (1,024) 806.7
Interest (865) (197) 340.1 (1,781) 487.2
Other income (127) 98 - (57) -
PBT 2,339 382 512.1 3,406 250.4
Tax (999) (130) 666.0 (1,457) 314.7
Effective tax rate (%) 42.2 32.1 1,007 bps 54.6 1,706 bps
Associate share 107 (1) - 258 -
Adjusted PAT 1,447 250 478.3 2,208 257.8
Adj. PAT margin (%) 21.0 18.3 270 bps 18.1 (293) bps
Exceptional items 29 24 19.8 736 -
Reported PAT 1,476 274 438.5 2,944 351.1
Source: Company, India Infoline Research

Financial summary
Y/e 31 March  (Rs m) FY11 FY12 FY13E FY14E
Revenues 4,967 8,379 17,546 18,467
yoy growth (%) 24.4 68.7 109.4 5.2
Operating profit 2,301 1,673 6,597 7,054
OPM (%) 46.3 20.0 37.6 38.2
Reported PAT 1,291 416 2,076 2,613
yoy growth (%) (3.6) (67.8) 399.0 25.9
         
EPS (Rs) 9.5 3.0 15.2 19.1
P/E (x) 14.6 45.3 9.1 7.2
P/BV (x) 1.6 1.6 1.4 1.2
EV/EBITDA (x) 7.7 32.8 7.7 6.8

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