Buy EIH; target of Rs 200: ICICI Direct

August 17
02:24 2019

ICICI Direct’s research report on EIH

EIH reported a weak set of results mainly on account of the weak performance of the flight catering business. Revenues declined 13.5% YoY to Rs 290 crore (vs. I-direct estimates of ~Rs 350 crore). This drop in revenues was on the back of flight catering business losing ~50% business with the grounding of Jet Airways. Flight catering revenues came in at Rs 38 crore (down 49% YoY) while revenues from rooms and F&B segment were at Rs 252 crore vs. Rs 257 crore YoY. Combined (domestic and managed hotels) RevPAR increased 0.6% YoY to Rs 6310 and occupancy improved 86 bps to 63.47%. For domestic owned hotels, RevPAR declined 1.8% YoY to Rs 6506 while occupancy rates were down 50 bps YoY. EBITDA (adjusted) was at ~Rs 4 crore, down 72% YoY (vs. I-direct estimate of Rs 14.6 crore). This was led by flight catering business reporting an EBITDA loss of Rs 3.67 crore vs. profit of Rs 12.35 crore a year ago. Owing to reduction in operating profit during the quarter, the company reported a net loss of Rs 7.1 crore (vs. I-direct estimates of Rs 11.9 crore profit).


We continue to maintain BUY on EIH valuing it at 25x FY21E EV/EBITDA arriving at a slightly reduced target price of Rs 200 per share.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.

Related Articles