Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cox & Kings Ltd
Holidaybreak Plc Acquisition Likely
to Be a Game Changer…
will be a game changer for Cox & Kings (C&K) given its
significant potential to drive synergies in the
international business. The acquisition is likely be
earnings accretive by ~40-45% for C&K for F13 (based
on our current valuations for C&K and Bloomberg
consensus estimates for HBR).
Key Catalysts: C&K is well-placed to capitalize on a potential
inflection in travel expenditure in India and increase value
through synergistic international acquisitions. Rising
disposable income, favorable demographics, travel aspirations
of India’s large middle class, combined with food, language
and cultural barriers, are among the key structural drivers of
growth in outbound group tours from India. We believe that the
potential to drive synergies between the strong Indian business
and HBR business is large and is likely to be the key stock
driver over the next 18 months.
Key Investor Debate: Markets are overly concerned about the
possibility that C&K could lose value for investors through
acquisitions in our view. C&K has a successful record in
creating value from acquisitions. We believe the company can
extract synergies to drive higher return ratios over the next
three to five years.
Risks to our Call: The key risks to our call are –
• The travel and tour Industry is cyclical and sensitive to
changes in the economy A macroeconomic shock
negatively impacts the travel industry
• Integration risks of the acquired companies
• C&K is likely to face stiff competition from other
leading brands as well as the unorganized sector.
• Capital investments by C&K in associate companies
are a key risk as deteriorating business may see
write-down in investments for Cox.
See full list -click link below:
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Cox & Kings Ltd
Holidaybreak Plc Acquisition Likely
to Be a Game Changer…
will be a game changer for Cox & Kings (C&K) given its
significant potential to drive synergies in the
international business. The acquisition is likely be
earnings accretive by ~40-45% for C&K for F13 (based
on our current valuations for C&K and Bloomberg
consensus estimates for HBR).
Key Catalysts: C&K is well-placed to capitalize on a potential
inflection in travel expenditure in India and increase value
through synergistic international acquisitions. Rising
disposable income, favorable demographics, travel aspirations
of India’s large middle class, combined with food, language
and cultural barriers, are among the key structural drivers of
growth in outbound group tours from India. We believe that the
potential to drive synergies between the strong Indian business
and HBR business is large and is likely to be the key stock
driver over the next 18 months.
Key Investor Debate: Markets are overly concerned about the
possibility that C&K could lose value for investors through
acquisitions in our view. C&K has a successful record in
creating value from acquisitions. We believe the company can
extract synergies to drive higher return ratios over the next
three to five years.
Risks to our Call: The key risks to our call are –
• The travel and tour Industry is cyclical and sensitive to
changes in the economy A macroeconomic shock
negatively impacts the travel industry
• Integration risks of the acquired companies
• C&K is likely to face stiff competition from other
leading brands as well as the unorganized sector.
• Capital investments by C&K in associate companies
are a key risk as deteriorating business may see
write-down in investments for Cox.
See full list -click link below:
No comments:
Post a Comment