PVR INOX Ltd. share price target

PVR (with industry association) is in consistent dialogue with the government but there has been no confirmation on reopening yet. It remains hopeful of getting permission to reopen cinemas in Unlock 5 phase i.e. October. Capex plans have been put on hold currently and will be reviewed when the situation normalises. They indicated 30 screens are in the pipeline for FY21E while another 28 screens are under fit out phase with total capex of | 115 crore. We bake in 20 screens addition for FY21E and 65 screens addition in FY22E. Consequently, we build in marginal footfalls growth of...

In a washout first quarter with no meaningful revenue, PVR (PVRL) reported operating and net losses of Rs 1.2bn and Rs 2.3bn respectively.

PVR has opened cinemas in Sri Lanka and has seen good response, with ATP Pending capex of INR400m would be put toward the completion of 30 screens (in the final stages) and of INR750m toward 28 screens (in the fit- PVRs near-term profitability and business scale would be affected as cinemas would be the last to open and would operate with a much reduced capacity and Rental waivers come as a great relief for the company; however, other operational charges, such as sanitization costs, would increase post the reopening of the cinemas, along with expected decline in revenues in the high- PVRs remains comfortable in terms of liquidity, with INR5.5b in cash (INR3b proceeds from rights issue) and INR1.6b in undrawn credit lines available from The recent shift in movies to OTT platforms and increased viewership raises concerns regarding increased competition from the OTT medium.

PVR Ltd owns and operates multiplexes across 21 States and UT's with a total of 825 screens (including 9 in Colombo). Major income segments for them are Box office, Food & Beverage (F&B;) and Advertisement (Ad). We recommend Subscribe rating to the right issue with a long term view even though we expect uncertainties till normalcy is attained....

The management has invoked Force Majeure during closure of cinemas and expects to achieve reduction of 70-75% in fixed costs. They have requested developers to reduce rentals post reopening for the rest of FY21. The industry body has proposed safety measure to the government. With the implementation of social distancing measure like keeping one seat vacant between two customer groups, capacity loss will not be more than 25%. On...

PVR's performance was marred (revenue/Ind-AS adjusted EBITDA miss by 8%62% respectively) by weak content (only 2 movies viz; Tanhaji and Baghi 3 crossed Rs1bn in box office collections during 4QFY20 versus ~4/5 movies in 4QFY19) and COVID-19 led shutdown (loss of revenue for 15-20 days without complete rationalization of fixed cost). We have drastically cut our sales/EBITDA estimates for FY21 and FY22 as 1) occupancy in 1HFY21 is likely to be negligible with a gradual recovery in 2HFY21 resulting in ~60% decline in footfalls over FY20 2) cautious screen expansion strategy...

9 June 2020 PVRs 4QFY20 revenue/EBITDA plunged 23%/73% in 4QFY20 due to cinema closures led by the COVID-19 pandemic. Revenue was in line, while EBITDA was better than expected on lower-than-estimated operational expenses. Given the complete washout in 1QFY21 (on the nationwide lockdown) and talks of reduced capacity due to social distancing, we have cut our estimated FY21/FY22E revenue by 45%/13%. We expect EBITDA loss of INR677m in FY21E (v/ profit of INR5b earlier) and cut EBITDA est. 4QFY20 consolidated revenue declined 23% YoY (down 30% QoQ) to INR6.5b (inline), mainly due to closure of cinemas during the last few days in Mar20 owing to the COVID-19 crisis. Subsequently, footfalls declined 29% YoY to 19.5m while occupancy stood at 30.6% in 4QFY20. Average ticket price rose to INR204 (4.6% YoY) along with an increase in spend per head to INR96 (5.7% YoY). On pre Ind-AS 116, EBITDA declined 73% YoY to INR428m (v/s est.

Estimates are made with a view that the theatres will be opened by mid-Q2 and start normalcy from FY22. Huge backlog of film content and strong brand name will be the growth catalyst once normalcy is obtained. OTT platforms are not expected to be an alternative for movie releases with its current subscription model. However, strategies adopted by OTT platforms to capture the market need to be carefully watched. Adoption of several measures to bring down fixed cost will help the...

We highlight that notwithstanding the recent Covid-19 scare, the structural story of multiplexes as a proxy play on urban discretionary remains. However, leisure activities and discretionary spend will take a backseat during stressed macroeconomic setup in the near term. Hence, we value PVR at 9x FY22E (ex-Ind-AS) EV/EBITDA and arrive at a target price of | 1060/share with a HOLD rating. We value Inox Leisure at 6x FY22E (ex- IndAS) EV/EBITDA and arrive at a target price of | 235/share with a HOLD rating....

Single screens to battle for survival post-COVID Single screens have been facing existential crisis since long. Already fraught with hygiene & maintenance challenges which was hurting footfalls, COVID-...