Cox & Kings falls 5% after default on another commercial paper, share price hits all-time low

Cox & Kings share price was stuck in the lower circuit of 5% today after the multinational travel firm said it has defaulted on payment towards maturity of commercial papers worth Rs 50 crore.Cox & Kings share price fell 5% or 1.70 points to all-time low of 32.95 on BSE. Cox & Kings share price fell to an all-time low of 32.95 compared to the previous close of 34.65 on BSE. Cox & Kings share price opened 5% lower at 32.95 level in trade today.

Cox & Kings share price has been losing for the last 5 days and has fallen 34.03% in the period. Cox & Kings share price has lost 84% during last one year and fallen 80.21% since the beginning of this year.

Cox & Kings in a statement said, "The working capital situation at Cox & Kings stretched in the last few months and was further impacted due to its inability to replace the short term loans with long term loans / regular working capital lines. The Company is taking all required measures to resolve the temporary cash flow mismatch. It is evaluating each business and identifying ways to improve operational performance."

On June 28, Cox & Kings share price was stuck in the lower circuit of 10% after the multinational travel firm said it has defaulted on payment towards maturity of commercial papers worth Rs 150 crore. The default has occurred on payment of commercial papers due to cash flow mismatch and a situation exacerbated by rating downgrade.

Cox & Kings said in a statement out of aggregate amount of Rs 200 crore, Rs 50 crore has been paid and the balance amount of Rs 150 crore has not been paid.

On June 17, CARE Ratings downgraded ratings of Cox and Kings. The credit ratings agency said, "The rating strengths are tempered by exposure of the company's travel business to macro-economic factors prevailing in the markets to which it caters and the fragmented nature of the domestic travel industry. The timeliness, adequacy of the asset monetisation and the subsequent reduction in debt remains the key rating monitorable".

The ratings are also tempered by continued high level of pledged shares by promoters and reduced financial flexibility as a result of decline in Cox & Kings' market capitalization, it added.

At the end of March 2019 quarter, promoters held 49.80% stake in the firm of which 63.28% stake was pledged. Cox & Kings market capitalisation stood at Rs 643.58 crore on BSE in afternoon trade. Of late, the firm's market capitalisation has been shrinking. It fell below Rs 1,000-crore level on June 24 to close at Rs 854.57 crore on BSE. Exactly, four years ago, Cox & Kings market capitalisation stood at Rs 4,357.32 crore.

The travel firm reported a consolidated net profit of Rs 1,388.84 crore for the quarter ended March 31, 2019. The company had posted a net loss after taxes and share of profit/loss of associates of Rs 53.36 crore for the corresponding period of the previous fiscal, Cox & Kings said.

Consolidated total income from operations of the company stood at Rs 1,262.89 crore for the quarter under consideration. It was Rs 1,214.04 crore for the same period year ago. For the fiscal year ended March this year, the company logged net profit at Rs 1,689.65 crore as against Rs 429.67 crore for the previous fiscal year. The company's total income from operations stood at Rs 5,785.98 crore for the fiscal year ended March 2019. It was Rs 5,034.37 crore for the year ago fiscal year.

Edited by Aseem Thapliyal