Buy Inox Leisure, target price Rs 362: ICICI Securities

has buy call on Inox Leisure with a target price of Rs 362. The current market price of Inox Leisure Ltd. is Rs 315.95. Time period given by analyst is one year when Inox Leisure price can reach defined target.
Inox Leisure Ltd., incorporated in the year 1999, is a Mid Cap company (having a market cap of Rs 3845.73 Crore) operating in Media & Entertainment sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 25.50 Crore, down -78.58 % from last quarter Total Income of Rs 119.05 Crore and up 758.59 % from last year same quarter Total Income of Rs 2.97 Crore. Company reported net profit after tax of Rs -122.28 Crore in latest quarter.

Investment Rationale
INOX Leisure’s Q1FY22 print has little relevance on limited opening of theaters; it incurred cash EBITDA loss of Rs1.07mn. Though H1FY22 was expected to be a washout due to lockdown, restricted occupancy and fewer releases, gradual permits for reopening of theaters by states has been encouraging. Only 5 states are pending to reopen with Maharashtra and Tamil Nadu being key. Once these states also reopen, the brokerage expects a strong movie release pipeline that should help the company report first quarterly profit in Q3FY22 or Q4FY22 after a gap of 7-8 quarters. INOX has healthy balance sheet with net cash of Rs1.2bn; strong screens pipeline increases visibility of growth on normalisation.

Promoter/FII Holdings
Promoters held 43.6 per cent stake in the company as of June 30, 2021, while FIIs held 18.5 per cent, DIIs 23.5 per cent and public and others 14.4 per cent.