INOX Pre-Results Stock view

• In the above table I have compared actual yearly figures of FY 2018-19 with
Projected figures of FY 2019-20 (Source: IIFL)
• The annual revenue is expected to grow by 16.77% while on a QoQ basis it is
expected to decrease by 8.01%
• Return on Equity is expected to grow by 12.27%
• P/E ratio and P/BV ratio have decreased YoY. However, this is not a red flag to show
that the company is not performing well in its operations. These ratios are calculated
on the basis of the stock price and not only INOX but the financial markets all over
the world were affected by the macroeconomic factor, i.e. COVID -19
Technical Analysis:

• The daily chart reveals that the stock is forming a Rounded bottom pattern which is
a bullish pattern, so the price is expected to go up from here
• The stock is also expected to break its 200 Day Moving Average soon
• High volumes were traded in the last 2 trading days of the last week indicating high
liquidity
• The MACD indicator also shows a positive crossover

• The 30 Minute chart shows a positive crossover of the 9-Day EMA over the 45-Day
EMA since the beginning of June and there has been no negative crossover since
then
• Coming to the MACD indicator, it saw a negative crossover in the second half of the
day but a positive crossover can be expected on Monday as the gap between the
two indicators is minimal
Additional Info:
• The management said that the company is expected to burn 15-18 Cr in
Cash every month and at this rate they can last around 6-7 months without
operating
• In case of additional need for Funds the company has already held talks with
their banks for additional debt and they have agreed to it
• Company has additional unused credit lines which are yet to be utilised
• They are also in talks with their property owners to pay rent on a revenue
sharing basis in the upcoming quarters till everything gets back to normal,
this will result in lower rental cost
• Watching movie is a social phenomenon in India and I don’t see it going out
of trend any time soon. Post pandemic people will be ready to hit the
theatres as usual. Keeping all this and above numbers and patterns in mind I
would recommend a BUY for the stock

EXPECTED
BUY OPENING: 290
TARGET: 305

Analysis by: Sameer Nandan Tripathy