Hold Inox Leisure target of Rs 270: Sharekhan

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Sharekhan's research report on Inox Leisure

Revenue declined by 22.4% y-o-y owing to sharp drop in footfalls (down 29% y-o-y) owing to nationwide lockdowns; monthly cash burn during lockdown period was Rs 15 - 16 crores. The social distancing norm coupled with truncated F&B menu, risk of box office clashes in short window and staggered seating arrangement would severely impact the performance of multiplexes during 1HFY2021E. Management expects customers would come back from September/October onwards given advertising safety features, marketing initiatives, reward program and private film screenings.

Outlook

We downgraded our rating to Hold from Buy on INOX Leisure Limited (ILL) given multiple headwinds and anticipation of delay in return of normalcy and lowered our PT to Rs. 270.

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