Markets

Broker's Call

| Updated on August 21, 2014 Published on August 21, 2014

ICICI Direct



CMP: ₹296.55

Target: ₹329

Cox & Kings’ (C&K) Q1FY15 revenues grew 26 per cent y-o-y to ₹738.7 crore (vs. I-direct estimate ₹657.7 crore) on account of consolidation of Meininger’s financials and higher sales from the leisure domestic segment (up 14 per cent y-o-y). The camping division also contributed to top-line in this quarter as sale of camping division is likely to conclude by Q2FY15. EBITDA margins improved 24 bps y-o-y to 47.6 per cent led by an all-round better performance of all segments, excluding the camping division. The sale of the camping business for ₹890 crore is likely to help Cox & Kings to de-leverage its balance sheet significantly, going forward.

C&K has done seven acquisitions in the past seven years (including Holidaybreak Plc), which made C&K an integrated player globally with quality products and services. This series of acquisitions brought huge business volume on the book of C&K on a consolidated basis.

Given the company’s healthy operating cash flow, we expect its debt servicing ability to improve. The sale of the camping business for ₹890 crore is likely to help C&K to de-leverage its balance sheet significantly, going forward.

Published on August 21, 2014
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