DSIJ Mindshare

Recommendation Review: Inox Leisure

We had recommended Inox Leisure (DSIJ, Vol. 28, Issue No. 20, dated September 22, 2013), when the scrip was trading at a price of Rs 63.40. The scrip has turned out to be a star performer, yielding more than 18 per cent gains in a mere three weeks. We advised investors to book profits in the stock when it touched Rs 72.85, yielding 15 per cent returns. Now, the scrip is doing even better, providing 18 per cent returns so far at Rs 77.

Our recommendation was made considering the fact that the valuation of the company looked very cheap as compared to the industry leaders. Inox Leisure is owned and operated by Gujarat Fluorochemicals, which holds more than 66 per cent stake in the company. It operates a chain of 72 multiplexes in the country. Inox Leisure emerged among the top three screen operators after it acquired 91 screens from Fame India earlier in 2013. It now has a total of 281 screens.

The industry as a whole is benefitting from rising consumer spends on entertainment, and hence, screen operators are seeing good days. The sentiment on the stock has also improved due to the line-up of some promising movies to be released in the year ahead. The scrip has already achieved our target, proving our conviction right. Those who have not booked profits in the scrip so far should take this opportunity to do so.

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