Cox & Kings recently declared its Q1FY17 results. IndAS impacted the result presentation which is why numbers are not comparable with previous quarter. Depreciation of the Pound Sterling impacted the profitability to the tune of Rs38crs For a clearer picture on the results the company has shared the IGAAP nos. as well. Net sales according to IGAAP grew by 11% to Rs698crs while EBIDTA (excluding forex impact) grew by 9% to Rs356crs The company brought down net debt from Rs2256crs to Rs1908crs this quarter. The company remains committed to its target of Rs300-500crs debt reduction every year.
VALUATION & OUTLOOK
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Post the sale of its online business the company has shown keen focus on growth of its continuing businesses. The company has shown operational resilience in its international business and yet again beat the performance of its peers in the domestic market. We believe this is a transformational phase for the company. The restructuring of the business and putting up key capacities in their key growth engines will help drive better profitability a few quarters down the line. We expect the business to clock 10-12% CAGR growth in the topline over the next 3 to 4 years with higher profitability growth on the back of higher capacity utilization & decrease in interest cost. At the CMP of Rs191.1/- the stock trades at an EV/EBIDTA of 4.6x Rs870crs for FY17E. We are positive on the stock and advice investors to HOLD the stock with an investment horizon of 2 to 3 years.