Home > Markets > Mark To Market > Inox Leisure shareholders are looking at the brighter picture
Revenue at Inox Leisure increased by one-third, year-on-year, to `355 crore, as contribution from gross box office and food and beverages increased, given the 36% jump in both segments. Photo: Reuters
Revenue at Inox Leisure increased by one-third, year-on-year, to `355 crore, as contribution from gross box office and food and beverages increased, given the 36% jump in both segments. Photo: Reuters

Inox Leisure shareholders are looking at the brighter picture

  • At the time of announcing Q3 results, Inox had 598 screens in 68 cities. It intends to close FY20 with 642 screens
  • Having said this, since optimism on the Street is already high, it’s imperative that Inox Leisure delivers on its high growth plans

Things may be glum all around, but investors are opting for a bright view of multiplex company Inox Leisure Ltd. Among other things, analysts and investors are pleased that the company has launched a loyalty programme, Inox Rewards. This will help the firm understand its viewer better, as and when it collects data from customer usage, goes the theory.

The optimism, justified or not, has helped Inox Leisure’s shares trade near their all-time highs. The stock has risen about 50% this year, and now trades at 28 times estimated earnings for FY20.

“It is pertinent to note here that Jet Airways, which shut down recently, had successfully created a loyalty programme, Jet Privilege, which helped it raise funds by unlocking value and was instrumental in driving repeat purchase," said analysts at SBICAP Securities Ltd in a report on 9 December.

Graphic by Naveen Kumar Saini/Mint
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Graphic by Naveen Kumar Saini/Mint

The broking firm added that data collection (loyalty programme) is a step in the right direction and may help drive ad revenue, cross-selling, and food and beverage sales.

Analysts are also excited because the company is looking to boost its occupancy rates. “Inox is also working aggressively to improve occupancy via alternative uses of its properties for seminars, conferences, meetings, etc.," said Edelweiss Securities Ltd in a note on 10 December.

Meanwhile, the company is also on an ambitious expansion programme. At the time of announcing its September quarter results, Inox Leisure had 598 screens across 68 cities. The multiplex company intends to close FY20 with 642 screens. Investors seem to be betting on its expansion and other revenue maximization plans.

As far as its financial performance goes, for the half-year ended September, the company’s net box-office revenue increased by 33% year-on-year. The September quarter performance was better, what with net box-office revenues increasing by 51% compared to the corresponding quarter last year, helped by better movie content performance. Footfall growth was strong last quarter.

Having said this, since optimism on the Street is already high, it’s imperative that Inox Leisure delivers on its high growth plans.

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