Cox & Kings Buy

While India Leisure revenues grew at a stable rate of 13 per cent y-o-y, it was international leisure that recorded an impressive 28 per cent y-o-y growth for the quarter. Management mentioned most of this growth was driven by ex-Holidaybreak subsidiaries, mainly Cox & Kings (CNK), the UK and the US. For FY15, India/international leisure recorded 14 per cent/9 per cent y-o-y growth. Management has guided for long-term growth of about 4 per cent in international leisure.

Cox & Kings’ (CNK) Q4FY15 revenues, at Rs.490 crore, were 13 per cent above estimate and down 1 per cent y-o-y. While leisure revenues grew 22 per cent y-o-y driven by international leisure, Meininger revenues fell 46 per cent y-o-y. Overall, CNK posted stable FY15 with revenues growing 11 per cent. The focus was on repayment of debt, which it successfully executed. The company repaid debt worth Rs.1,800 crore during the year and its debt-to-equity ratio fell from 2.2x to 1.1x.

Buy Cox & Kings at CMP: Rs.305.45 Target: Rs.448