Angel Broking recommends ‘Subscribe’ to Cox and Kings IPO

MUMBAI: Angel Broking has recommended Subscribe view on the Cox and Kings IPO taking into account company’s superior growth rates, its wide geographical reach, a strong brand franchise and the improving industry dynamics.

Cox and Kings (C&K) is a global tour operator, deriving around 90% of its revenues from the leisure segment. The company has a strong presence in the emerging and developed markets, and offers travel, forex and visa services.

Over FY2006-09, C&K’s Revenues and PAT have witnessed a CAGR of 65.6% and 80.7%, respectively; these, however, have also been aided by the five acquisitions it has made across the globe since 2006. Going ahead, we estimate C&K’s Top-line and PAT to witness a CAGR of 27.4% and 37.7% over FY2009-11E, respectively.

On the lower and upper end of the price band, the stock would quote at 16.5x and 17.3x its post diluted FY2011E
estimates, respectively. On the back of positives like C&K’s superior growth rates, its wide geographical reach, a strong brand franchise and the improving industry dynamics, we recommend a Subscribe view on the IPO,” the brokerage said.