INOX Leisure Limited (INOXLEISUR.NS) Will Rise As India Reopens
Company has sufficient liquidity to fund business operations for next 6 months
INOX Leisure
Ticker: INOXLEISUR.NS
Price: INR 245.15
Multiplex chain operator Inox Leisure Ltd said it has sufficient liquidity to fund business operations for a minimum of the next six months although cinema halls of the company are closed following the COVID-19 pandemic.
In a regulatory filing revealing the impact of COVID-19, the company said it has also cut costs across all functions and departments and has also increased liquidity by adding extra lines of funding through short/long term debts.
Besides, Inox Leisure said it has also been engaging with its business partners — developers and distributors and producers, making representations to state and central government for support, while also aiming to utilise its resources better post opening or resumption of operations.
“The company’s management believes that the aforementioned measures ensure that the company has adequate liquidity to fund the business operations for at least the next six months and can further add liquidity by the additional term debts from the banks,” the filing said.
It further said the company has enough liquidity to service debt.
As the government has been announcing phased lifting of the lockdown, the management believes that normalcy can be gradually restored during the financial year ending March 31, 2021.
“Consequently the company will be in a position to resume and continue its operations for the foreseeable future, thereby realizing its assets and discharge its liabilities as they fall due for payment in the normal course of business,” it added.
On the estimation of the future impact of COVID-19 on its operations, the company said a prolonged lockdown situation could result in company’s inability to start multiplexes and it may be unable to operate at optimum capacity on account of government imposed social distancing norms for multiplexes in future.
Inox Leisure said its operations were shut down in line with the government directives with effect from March 23, 2020 thanks to the coronavirus pandemic.
Business Summary
INOX Leisure Limited is engaged in operating multiplex cinema theatres. The Company is engaged in the business of film exhibition. The Company operates through theatrical exhibition segment.
The Company is engaged in booking, providing a range of movies, reviewing movie schedules and offering a range of cinema food.
The Company is engaged in the business of setting up, operating and managing a national chain of multiplexes under the brand name INOX.
The Company has a portfolio of approximately 110 multiplexes and over 420 screens in approximately 60 cities with a seating capacity of 109,406. The Company offers a selection of Hindi, English and regional movies.
The Company offers online booking on www.inoxmovies.com and through its smart phone applications.
The Company operates 41 properties in West India, 25 in North, 24 in South and 18 in the East India.
Shayne Heffernan Trade Idea
“We predict the future price of INOX Leisure will come in around INR 345.75 which will give the stock a price increase of +42.55%.”
Price Performance
Relative Valuation
Technical Indicators
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 278.13.
The projected lower bound is: 205.98.
The projected closing price is: 242.06.
Candlesticks
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 18 white candles and 32 black candles for a net of 14 black candles.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 26.8308. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 53.20. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 4 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 18. This is not a topping or bottoming area. The last signal was a sell 4 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 49 period(s) ago.
Rex Takasugi – TD Profile
INOX LEIS closed down -2.350 at 242.800. Volume was 70% below average (consolidating) and Bollinger Bands were 8% wider than normal.
Open High Low Close Volume 249.000 253.150 241.200 242.800 233,759
Technical Outlook Short Term: Neutral Intermediate Term: Bullish Long Term: Bearish
Moving Averages: 10-period 50-period 200-period Close: 252.29 223.73 325.51 Volatility: 131 102 73 Volume: 1,710,752 983,056 473,794
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
INOX LEIS is currently 25.4% below its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods.
Our volume indicators reflect moderate flows of volume into INOL.NS (mildly bullish). Our trend forecasting oscillators are currently bullish on INOL.NS and have had this outlook for the last 12 periods.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of the Indian Stock Market.
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Sources:
INOX Leisure Company Website
Thomson Reuters Metastock and Eikon financial tools
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