Shares of multiplex operator Inox Leisure today hit a record high of ₹355 surging as much as 10% in early trade. Year to date the stock is up close to 45% as analysts remain positive on this space. Analysts at Elara Capital remain “structurally positive” on India’s movie exhibition segment, “led by transition in the Hindi movie content space, which is moving towards more of fiction, biopic and real incident-based content. We expect box office collection of movies will remain strong, led by supply of large-scale cinematic, which will have a positive impact on box office revenue for exhibitors.”
Inox Leisure is the top pick of Elara Capital in this space.
Inox Leisure had posted strong Q4 number earlier this month with revenues from operations jumping 48% from Rs. 324 crore to ₹479 crore. EBITDA margin in Q4 FY2019 improved to 20% while adjusted PAT rising from ₹4 crores to ₹44 crore.
Multiplex operators derive their revenues from four key segments: net box office, the net food and beverage, advertisement and other operating revenues. For the quarter, Inox Leisure’s net box office figures went up from ₹190 crores to ₹284 crores, a growth of 50%.
The overall footfalls for the quarter improved from 126 lakh to 180 lakh, driven by box office success of movies like “Gully Boy”, “Simmba”, “Total Dhamaal” and “Kesari”.
Revenues from other segments also showed a good growth. In Q4, Inox Leisure opened five properties with 28 screens.
The management also remains positive forthcoming releases like Salman Khan-starrer "Bharat", "Spider-Man", and "Mission Mangal". Inox Mall is targeting to open 16 properties and 71 more screens this year.
CEO Alok Tandon at an analyst meet on May 13 said: “We are a net debt-free company and all our expansion is taking place at a fast pace. And we have no issues as far as capital is concerned to execute these projects.”
Yes Securities is positive on Inox Leisure shares. “We remain positive on the stock led by strong content pipeline driving footfalls, aggressive screen expansion plan, premiumisation, improved focus on entering new cities, higher conversion rate enabling improved SPH and continued focus on improving its advertising revenue,” the brokerage said in a May 14 report.
At 12:33 pm, Inox Leisure shares were off day’s highs but still trading 7% higher at ₹346.
