CSK, as the Indian Premier League franchise is called, has posted mixed numbers in the wake of the pandemic.
The Chennai-based entity reported a 29 per cent fall in income from operations to Rs 247.83 crore in FY2021, against an income of Rs 350.27 crore in FY2020.
In the wake of the pandemic, the 13th edition of the Indian Premier League was organised in the United Arab Emirates in September-November 2020.
The company posted sub-par results because the pandemic dampened business sentiments, according to dealers active in the pre-IPO space. This is a short-term impact and the company would see a rebound once normalcy returns, they added.
Abhishek Ginodia, Director, Altius Investech, said Covid-19 was a direct hit on the company, impacting gate-money receipts and increasing expenses. “It will remain under stress until things are back to normal. This is not a good sign for equity investors. But the good part is that they are able to deliver a positive bottom line,” he added.
The company had reported a revenue of Rs 417.83 crore and clocked a PAT of Rs 111.2 crore in 2018-19, before the pandemic.
Shares of Chennai Super Kings are trading at Rs 88-92 ahead of the resumption of the 14th edition of the cricket league, which was postponed in May in the wake of the pandemic. The remaining leg of the league will now restart from September 19 in the UAE.
The scrip has been a proven multibagger in the unlisted space, rallying about 670 per cent from Rs 12-15 in November 2018. Analysts remain bullish on the counter over the long run.
Sunil Chandak, Equity Strategist, Gennext Investrade, said the upcoming auction for two teams would be the biggest trigger in the re-rating of the company. He said there was an upside potential of 40-50 per cent from current levels. “The new teams are likely to be auctioned at a valuation of Rs 4,000 crore, whereas profit-making CSK is available at Rs 2,700 crore. It has its own legacy and a strong brand value,” he added.
Operational profit of the IPL franchise declined 12 per cent to Rs 59.19 crore during the period under review.
The diluted EPS of the company has declined to 1.16 in 2020-21, against 1.43 in 2019-20. The company has not declared any dividend for the year ended March 31, 2021.
Dalal Street veteran Radhakishan Damani and LIC are the key shareholders of the company. LIC holds a 6.04 per cent stake; Damani’s stake was not disclosed in the company’s annual report.
