INOX Leisure soars 9% in two days in weak market on healthy Q3 results

In the past five months, the stock has outperformed the market by surging 60 per cent as compared to a 10 per cent rise in the benchmark index

Shares of multiplex chains INOX Leisure rallied 6 per cent to hit a new high of Rs 450 on the BSE on Monday. The stock extended its Friday's 3 per cent gain after the company reported blockbuster performance in December quarter (Q3FY20). In comparison, the S&P BSE Sensex was down 0.67 per cent or 276 points at 40,865 at 11:42 am.

In the past five months, the stock has outperformed the market by surging 60 per cent, as compared to 10 per cent rise in the benchmark index.

Excluding the Ind-AS impact, the company’s earnings before interest, tax, depreciation, and amortisation (ebitda) during the quarter jumped 25 per cent year on year (YoY) at Rs 108 crore. Ebitda margin improved to 20.8 per cent from 20.0 per cent in year ago quarter.

Profit after tax recorded a stupendous growth of 40 per cent at Rs 51 crore over the previous year quarter, back of higher revenue. Total revenues came at Rs 518 crore, reporting an impressive 19 per cent growth, on a YoY basis.

The management said the performance of the quarter once again emphasized the significance of content, with numerous movies doing well at the box office. Besides content, INOX’s consistent screen addition and efforts to take the cinema experience to new levels also added to the third quarter’s performance, the company said.

INOX Leisure has reported another strong quarter with footfall growth of 11 per cent YoY vs larger peers; we believe this is primarily due to higher share in Hindi content, which continues to outperform vs regional and English content, analysts at Elara Capital said in quarterly update.

Content pipeline remains strong with a big slate of large releases as Hindi Box office is poised to grow 22 per cent YoY in H1FY21, which will continue to support footfall and ad growth, as the latter has a higher share in Hindi content, the brokerage firm said, with ‘buy’ rating and target price of Rs 510 per share.