ADANI ENTERPRISES

On daily charts Adani showing positive divergence in RSI,MACD and Stochastic.Got support at 151.5 on 28 and 31st Aug.One can buy with stoploss of 149 for targets of 175-185-195 in near term.

VOLUME SPREAD ANALYSIS OF ADANI FOR LAST FOUR DAYS:

28/08/2012 - Open-159  High-159.4 Low-151.5 Close-155.9 Volume= 4,609,696 Stopping Volume. This will be a downbar during a bearish period closing towards the Top accompanied by High volume. A stopping Volume normally indicates that smart money is absorbing the supply which is an Indication that they are Bullish on the stock. HENCE WE CAN EXPECT A REVERSAL IN THE DOWN TREND.

29/08/2012 - Open-156.25   High-157.9 Low-153.2 Close-154.6 Volume= 1,951,065 No Supply. A no supply bar indicates supply has been removed and the SMART MONEY CAN MARKUP THE PRICE. IT IS BETTER TO WAIT FOR CONFIRMATION.

30/08/2012 - Open-155 High-157.5 Low-152.6 Close-155.35 Volume= 2,640,479 Strength Bar. The stock has been in a down Trend. An upbar with higher Volume closing near the High is a sign of strength returning. THE DOWNTREND IS LIKELY TO REVERSE SOON.

31/08/2012 - High-157.8 Low-151.5 Open-155 Close-155.8 Volume= 2,047,996 .The previous bar saw strength coming back. THIS UPBAR CONFIRMS STRENGTH.

Cox & Kings CMP Rs 138

Educational travel biz is recession-proof: Peter Kerkar

Interview with Director, Cox & Kings

Ruchika Chitravanshi / New Delhi Aug 23, 2012, 00:15 IST

bussiness standard

While leisure travel currently accounts for the bulk of Cox & Kings’ business, the company is targeting education travel in the next two to three years, Director Peter Kerkar tells Ruchika Chitravanshi in a telephonic interview. Edited excerpts:

What does the deal with Citi Venture Capital International mean for the India business?
I had planed to transform the company from one primarily into tour operations to an education specialist. We knew we were acquiring debt for Holidaybreak. We brought in $137.75 million, which changed our debt-to-equity ratio from 2.7 to 2.2 within a year of the acquisition. I am not diluting my shareholders at Cox & Kings. From the start, I said we would have a very aggressive debt-reduction programme. This is its first stage.

What is the next stage?We would create a cash pool from business flows. This would further write-off our debt. Between Cox & Kings and its UK subsidiary Prometheon Holdings, our earnings before interest, tax, depreciation and amortisation (Ebitda) is Rs 700 crore. Our payments don’t start before 18 months. It allows me to take the cash from Holidaybreak into the cash pool to reduce debt. After this deal, net debt would fall from $700 million to about $540 million.

What would be the key growth driver for the company?
Primarily, it would be educational travel. This has become a significant part of the business. We also have a camping division. We have forayed into this specialised market, which we believe is recession-proof and has great roll-out potential in Europe, followed by Asia.

What is the contribution of these verticals to your overall revenue?
For 2011-12, the share of leisure was 52 per cent, education 20 per cent and the remaining was accounted for by camping. In the next two to three years, 60 per cent of our revenue would be accounted for by the education business. In the last quarter, education accounted for half our Ebitda.

What are the Holidaybreak products you want to bring to India?
There are two kinds of products---up-centres, which we run for children (learning and activity centres), and our programmes for students like psychology, history and language tours. PGL, a Holidaybreak brand, has years of experience in health and safety. We will bring the standards and discipline of the UK into India.

Would you create a separate brand entity for Holidaybreak products or would these be merged with Cox & Kings?
It is slightly early to say, as we would have to see what brands we want to bring. Holidaybreak has 20 brands that are market leaders in Europe. We will see what fits here.

How much of the company’s revenue does India account for? What are the growth prospects here?
It is a little over 22 per cent and we are seeing growth of about 30 per cent on a year-on-year basis. The base we are starting from is so small that the double-digit growth will continue even in this economy. People will trade down, but won’t stop travelling. They will take smaller, but three to four holidays a year.

What kind of consolidation do you expect in the travel market?
There is a natural fall-out in the market; the bigger boys, who are better capitalised and have franchise and distribution networks in the international arena, would win. Regional players would come under pressure. Smaller agents who have cash flow from ticketing are already under pressure. These structural changes would benefit most big players. While the market may see a slowdown, in terms of organised players, there should be serious growth.

What do you think of the online market?
We look at the online space as just another way of accessing our customer base. We feel we have a world class online platform, comparable with any online travel agency abroad. We have always said distribution was about touching and feeling people in India, at least for the next ten years. Franchisees enable us to have that touch-and-feel effect, and that has been our expansion strategy. We have to be ready with the online platform, when the movement comes to India. Technologically, we are prepared. But we are not looking at any acquisitions in the space.

With Thomas Cook’s new avatar, how do you see competition evolving?
I have been cognizant of competitors because you cannot be complacent. But beyond that, we are the market leader.

 

ICICIdirect.com is bullish on Cox & Kings and has recommended buy rating on the stock with a target of Rs 195 in its August 22, 2012 research report.

“Cox & Kings (C&K) have incorporated HBR’s peak season numbers (i.e. April-September period) into Q1FY13 numbers. This, in turn, led to robust revenue and PAT growth of 239% YoY and 284% YoY, respectively. C&K reported net revenues of | 532 crore vs. our estimated revenues of Rs 436.7 crore. The growth was mainly led by robust growth from the Indian operation (23% YoY growth) and sustained stable performance of the education division of HBR (40% of total revenues) leading to overall revenue growth of 8% YoY on a like-to-like basis. On the other hand, business of camping (14% of total revenues), HotelBreak and adventure divisions continued to get impacted due to a difficult operating environment in UK and other European regions. However, its impact on margins remained negligible due to improved margins of leisure division led by strong India business and stable margins in education division. With HBR’s peak season, stable margins and exchange fluctuation gain of Rs 71 crore, the company reported robust PAT growth of over 283% YoY.”

“The business of the education division (40% of revenue), a major contributor, continued to remain resilient and grew 9% YoY. The business of camping, adventure and HotelBreak have been affected due to difficult economic conditions in the UK & Netherlands and increase in local taxes in the key operational markets of France, Spain and Italy.”

“The company is raising nearly US$137.8 million (Rs 750 crore) through minority stake sale in its wholly-owned subsidiary Prometheon Holdings (UK) Ltd. The fund will be mainly utilised to retire part debt from Prometheon’s book, which we believe would further improve its profitability, going forward. We have valued the stock on an SOTP (i.e. 8x FY14E EV/EBITDA) basis and maintained BUY rating taking into account the long-term synergy with HBR and India’s growth potential,” says ICICIdirect.com research report.