Cox & Kings Ltd Research ReportQ4

Meininger drives growth… Cox and Kings reported a positive set of Q4FY19 numbers. Even post adjustment to education division sale related exceptional gains, the company reported PAT higher than our estimates. Revenues came in at | 452 crore (broadly in line with I-direct estimate of | 457.1 crore), increasing 15.4% YoY on a like-to-like basis. EBITDA margins came in at 42.4% with absolute EBITDA at | 191.7 crore (above I-direct estimate of | 121.8 crore). During the quarter, the sale of the education division was concluded. The financials comprise an exceptional gain of | 1311.7 crore (gross), which is related to the same. Adjusted for exceptional gains, PAT was at | 28.3 crore (vs. I-direct estimates of | 7.4 crore). International leisure business improves During FY19, the company’s leisure international revenues increased 23% YoY mainly on the back of improving domestic spend and higher growth in foreign tourist arrival. On the other hand, domestic leisure segment got impacted, to some extent, with disruption in the airline industry. This, in turn, led to annual growth of 5.8% YoY only. Going forward, with improved tourism measures by the government and improved purchasing power, we expect domestic leisure business to continue to outperform in coming years. Hence, we expect leisure revenues to grow at a CAGR of 7-8% in FY19-21E.